Process Flow of FI with MM

Step 1 Generating purchase requisition( PP-MM involved)
Step 2 Making inquiries (MM)
Step 3 Raising purchase order (MM)
Step 4 Release of purchase order ( MM)
Step 5 Goods received from vendor ( MM and FI )

Entry will be

Raw Material Inventory a/c Dr.
GR/IR clearing a/c Cr.

Step 6 Invoice verification and quality assurance (FI and MM)
Entry will be

GR/IR clearing a/c Dr
Vendor a/c Cr

Step 7 Goods issued for consumption(MM, FI and PP)
Entry will be

Raw material consumption a/c Dr
Raw material inventory account Cr

Step 8 Production receipt( FI, MM & PP)
Entry will be

Finished goods inventory a/c Dr
Change in stock Cr

Step 9 Finished goods delivered to customer(MM, SD & FI)
Entry will be

Change in stock Dr
Finished goods inventory a/c Cr

Step 10 Raising invoice on customers( SD & FI)

Customers a/c Dr
Sales a/c Cr

Inventory Accounting Entries

All the Inventory transactions will look for the valuation class and the corresponding G.L. Accounts and post the values in the G.L accounts.
For Example: During Goods Receipt

Stock Account - Dr
G/R I/R Account - Cr
Freight Clearing account - Cr
Other expenses payable - Cr

During Invoice Verification

G/R I/R Account - Dr
Vendor - Cr

When the Goods are issued to the Production Order the following transactions takes place:

Consumption of Raw Materials - Dr
Stock A/c - Cr

When the Goods are received from the Production Order the following transactions takes place:

Inventory A/c - Dr
Cost of Goods Produced - Cr
Price difference - Dr/Cr (depending on the difference between standard cost and actual cost)

When the Goods are dispatched to customer through delivery the following transactions takes place:

Cost of Goods Sold - Dr
Inventory A/c - Cr

When the Goods are issued to a Cost Center or charged off against expenses the following transactions takes place:

Repairs and Maintenance - Dr
Inventory A/c - Cr

When the Goods are stock transferred from one plant to another, the following transactions takes place:

Stock A/c - Dr (Receiving location)
Stock A/c - Cr (Sending location)
Price difference - Dr/Cr (due to any difference between the standard costs between the two locations)

When the stocks are revalued, the following transactions takes place:

Stock A/c - Dr/Cr
Inventory Revaluation A/c - Cr / Dr

When the Work in Progress is calculated the following transaction takes place:

Work in Progress A/c - Dr
Change WIP A/c - Cr

Physical verification /shortages and excesses : Shortages/excesses on authorizations shall be adjusted using the physical inventory count transaction.

VENDOR INVOICE VERIFICATION

The detail process related to invoice verification is documented in Materials Management Document.

On receipt of vendor bill the following entry will be passed:

GR/IR Account DR
Freight Clearing Account DR
Cenvat Clearing Account DR
Vendor Account CR

Invoice Verification for Foreign Vendor On receipt of vendor bill the following entry will be passed:

GR/IR Account DR
Vendor Account CR

Invoice Verification for Custom vendor On receipt of Vendor bill the following entry will be passed:

1) RG 23A/RG 23C Part 2 A/c (CVD) A/c DR
Cenvat Clearing A/c CR

2) G/R I/R A/c DR
Cenvat Clearing A/c DR
Vendor A/c CR

3) Cost of Material A/c DR
Vendor A/c (Customs) CR
Invoice Verification for Freight / Clearing Agent Cost of Material A/c DR
Vendor A/c (Clearing Agent) CR
Invoice Verification for Octroi Expenses Cost of Material DR
Vendor A/c (Octroi) CR


TDS (Work Contract Tax) for Service Orders shall be calculated and deducted accordingly.
The following entry will be passed on bill passing:

Expenses Account DR
Vendor Account CR
TDS Account CR

The material shall be returned to the vendor using the Return to vendor movement type in SAP Creating a Return PO These transactions will be processed in the MM module.
The accounting entries will be :

Returns after GRN GR/IR A/c Dr
Stock A/c Cr

The accounting in respect of debit / credit memos for FI vendors, the process will be similar to that of invoice processing.
The accounting entries will be:
On issue of debit note

Vendor Account DR
Expenses Account CR I

n respect of import vendor - capital goods exchange differences are to be accounted manually through a Journal Voucher for capitalization. Exchange rate differences will be accounted at HO. An example of the accounting entry in this case shall be:

Invoice entry @ 40 INR: 1 USD
Asset / Expense A/c DR 100
Vendor A/c CR 100
Payment Entry @ 41 INR: 1 USD
Vendor A/c DR 100
Bank A/c CR 110
Exchange rate loss Capital A/c DR 10
Asset A/c DR 10
Exchange rate loss Capital A/c CR 10

A new G/L account shall be created for the special G/L transactions.
The accounting entry for making the down payment shall be:

Advance to supplier account Debit
Bank A/c Credit

When the invoice is booked the following entry is passed

GR/IR account Debit
Vendor account Credit Clearing of Invoice against Down Payment
Vendor A/c Debit
Vendor down payment account Credit

Wherever, TDS is applicable, the TDS will be deducted at the time of down-payment to the vendor. Down Payment for Capital (tangible) Assets Down payment to vendors for capital acquisitions is to be reported separately in the Balance Sheet under the head Capital Work in Progress. Hence down payment for capital goods would be tracked through a separate special general ledger indicator.

The procedure to be followed is:
Definition of alternative reconciliation accounts for Accounts Payable for posting down payments made for Capital assets Clearing the down payment in Accounts Payable with the closing invoice.

A new G/L account shall be created for the special G/L transactions.
The accounting entry for making the down payment shall be:

Vendor Advance for Capital Goods Account Debit
Bank A/c Credit

When the invoice is booked the following entry is passed
Asset A/c / Asset WIP Debit Vendor A/c Credit
Clearing of Invoice against Down Payment Vendor A/c Debit
Vendor Advance for Capital Goods Account Credit

The Following are the TDS Rates (to be confirmed with the recent changes) Particulars

Tax Rate Surcharge Rate Total Contractors – 194 C 2% 5% 2.10%
Advertising – 194 C 1% 5% 1.05%
Prof. Fees – 194 J 5% 5% 5.25%
Rent – Others – 194 I 15% 5% 15.75%
Rent – Company – 194 I 20% 5% 21%
Commission – 194H 5% 5% 5.25%
Interest - Others – 194 A 10% 5% 10.50%
Interest – Company – 194 A 20% 5% 21%
Special Concessional Tax Works Contract Tax

SECURITY DEPOSITS /EARNEST MONEY DEPOSIT RECEIVED FROM VENDORS

Bank A/c DR
Security Deposit Vendor CR

EMD to give the age so as to enable the same to be transferred to unclaimed EMD account.


PAYMENT OF TOUR ADVANCE DOMESTIC TOURS
Employee Advances will be paid by the Accounts Department unit wise based on the requisition or recommendation of the respective departmental head.

Employee Travel Advance A/c DR
Cash / Bank Account CR

MIGO N MIRO

MIGO - Goods Receipt You have to create a GL account With AUTOMATIC posting. (i.e. GR/IR a/c).
Assign this a/c to Transaction type WRX (i.e. GR/IR Clearing a/c) in TC OBYC. It is pertaining to the MM module. Whenever the product received into our factory/Plant, we have to prepare goods receipt.

For preparing MIGO, the following are required:
1. Company Code
2. Plant
3. Purchase Organization & Purchase Order
4. Storage Location
5. Storage Bin
6. Vendor
7. Material etc.

MIGO entry will be as under:
Inventory Account - Dr.
GR/IR account - Cr.
Purchase account - Dr.
Purchase Offset - Cr.


MIRO - Payment for the Invoice This pertaining to FI Module. For this you have to enter the Purchase Order or Service entry sheet No. for the required entry. After entering purchase order, it will populate all the goods receipt pertaining to the purchase order. You have to select the particular entry for that you are going to make the payment. Take the appropriate tax code and check the difference is 0, simulate and save. You have to create a GL account (i.e. Inventory RM a/c). Assign this a/c to Transaction type BSX (i.e. Inventory Posting a/c) in TC OBYC.
All other settings will be done by MM Consultant.

MIRO Entry will be:

Vendor account - cr.
GR/IR account - Dr.
Cenvat account - Dr.

SD Accounting Entries

INVOICE GENERATION Invoices will be generated at the Smelters and stock points. The accounting entries for the sale of goods despatched will flow from the Sales invoice generated in SAP Sales and Distribution module.

The following entries shall be passed
Customer Account Dr
Revenue Cr
Excise Duty Payable Cr
Sales Tax Payable (local or central) Cr

Note: As mentioned above in the FI document, which is created in the background, the SD invoice number shall be captured.
However as per the current accounting procedure the accounting entry passed is as follows :-

Customer Account Dr
Revenue Cr
Excise Duty Billed Cr
Sales Tax Payable (local or central) Cr
Excise duty paid a/c Dr Excise duty payable a/c Cr

EXPORT SALES There have been very few export transactions in the past. SAP system will be designed to handle export business. Exports are mainly from the mines and will be handled at the mines, however the documentation part will be taken care at the Head Office.

The accounting entry is:
Customer Account Dr
Revenue (Exports) Cr

The realisation of export sales will be directly credited to the bank.
The accounting entries will be as follow:

Bank Dr Customer Cr
Exchange Fluctuation Dr/ Cr

The accounting entries will be:
Rebates/Discounts Dr
Customer Cr

DEBIT MEMOS Debit Memos shall be issued in case of price difference, sale tax difference and interest on usance period and overdue payments.

The accounting entries for two possible scenarios are as follows:
Price Undercharged:
Customer Account Dr.
Revenue Cr.
Sales tax payable Cr.
Sales tax undercharged Customer Account Dr.
Sales tax adjustment Cr.
Interest on delayed payments/usance period and other charges Customer Account Dr.
Interest Others Cr.

In case of HZL a complete retirement or a partial retirement of asset is done. The system uses the asset retirement date to determine the amount to be charged off for each depreciation area. The existing accounting policy is to provide depreciation for the full quarter in which the asset is sold/discarded, recommended that the depreciation be provided from the date of acquisition on prorata basis .

Accounting entry for sale of Asset to customers:

Customer Account Dr
Asset Sale Cr
Accumulated Depreciation Dr
Loss on Sale (if applicable) Dr
Asset Sale account Dr
Asset account Cr
Profit on sale (if applicable) Cr

Note: In case of any Sales Tax /Excise duty applicable for this transaction, SAP will calculate the Sales Tax/Excise Duty based on the Tax Code selected the entry is posted to the GL Account (Sales Tax Payable)

Accounting entry for sale without a customer:

Accumulated Depreciation Dr
Loss on Sale (if applicable) Dr
Asset Sale account Dr
Asset account Cr
Profit on sale (if applicable) Cr
Accounting entry for scrap Accumulated Depreciation Dr
Loss on Sale of Assets Dr
Asset account Cr

SALE OF SCRAP The sale of scrap (non-stock) shall be mapped as a direct manual FI entry. The customer will be created as a FI customer. No Logistics module will be involved in the process.
A FI Invoice will be prepared for the sale of scrap with the following entries:
Customer Dr
Sale of Scrap Cr
Excise Duty Payable Cr

ADVANCES FROM CUSTOMERS Advances are received from the customers against delivery. These advances will be recorded in a special general ledger account.
The accounting entry for the same will be:

Bank Account Dr
Advance Customer Payments Cr
These advances will be later on adjusted against the invoices raised on the customers. Advances can be adjusted against more than one invoice at the time of clearing of the invoices against advances.
Adjustment of Advances Customer Account Cr
Advance Customer Payments Dr

A financial document would be created for each Bank Guarantee received and this document number will be referred to in the Sales Order which would then monitor the value and the validity of the of the Bank Guarantee instrument wise while doing the billing.The letter of credit /Bank guarantee given will be recorded as a noted item.

Accounting Entry for
Goods receipt Stock/Inventory account Dr
GR/IR account Cr
Freight clearing account Cr

Accounting Entry on invoice verification of supplier
GR/IR Dr
Vendor account Cr

Accounting Entry on invoice verification of freight vendor

Freight clearing account Dr
Freight Vendor account Cr

GOODS RECEIPT Based on the Purchase order and the Quantity actually received Goods Receipts (GR) will be done.
Based on the GR done the following accounting entry will be passed in the Financial Accounts

RM/PM Stock Account Dr
GR/IR Account Cr
Freight Clearing Account Cr

EXCISE INVOICE VERIFICATION On receipt of the excise invoice cum gate pass the following entry will be passed

RG 23 A / RG 23 C Part 2 Account Dr
Cenvat Clearing Account Cr

SAP Tickets

we will see what are SAP Tickets.

SAP Tickets are nothing but problems or issues raised by the end customer in a company where end users are running SAP project.

Once the SAP project is implemented, support phase begins. Support team is responsible for solving the tickets/issues in day-to-day business.

For any support project, customer will set up Help Desk. If any problem occurs customer will call Help Desk and register the issue/Ticket.D

ifferent companies use different software products to manage SAP Tickets. Remember this software is not provided by SAP. It is third party software. There are many software products in the market like Manage Now et c. You can call these software products as tools.

All tools will provide the common attributes which are listed below-
1) Every user will be provided with user name and password to enter into the tool
2) We can see the tickets assigned for a particular user name
3) You can list all open tickets by giving the Date Range
4) You can list all closed tickets by giving the Date Range
5) You can list out all the open tickets assigned for an User
6) You can list out all the closed tickets assigned for an User
7) You can see the description of the Ticket, by entering the Ticket Number.
You can see who had raised the Ticket, what is the problem.

What is the severity of the Ticket?
There are lot many other attributes like you can transfer the Ticket to another user etc.

What is the severity of the problem Ticket?
When a Ticket is raised, it will be given severity. There are following severities.
It may vary from company to company.
Severity
1Severity
2Severity
3Severity
4The severity
will be decided based on the business critical impacts.

If there is large impact on the business it will be given 1 severity, if it is having least impact then it will be given 4.

Severity 1 problem tickets should be solved in 8 hours.
Severity 2 problem ticket should be solved in 16 hours.
Severity 3 problem ticket should be solved in 15 working days.
Severity 4 problem ticket should be solved in 30 working days.

Again the no of days may vary from one company to another.All these things will be decided when giving the contract to the IT company. The agreement is called as "SLA".SLA stands for Service Level Agreement.What happens if a particular ticket is not solved by the IT company according to the SLA/Contract?The Customer imposes fine on IT company as per the contract/SLA.

User Acceptance Training (UAT)

As a developer we must perform unit test and should document it by writing test cases. We will discuss more about test case writing in near future. Today we will try to learn the terminology.

Unit Testing A unit test is a procedure used to validate that a particular module of source code is working properly from each modification to the next. The procedure is to write test cases for all functions and methods so that whenever a change causes a regression, it can be quickly identified and fixed. Ideally, each test case is separate from the others; constructs such as mock objects can assist in separating unit tests. This type of testing is mostly done by the developers and not by end-users.

Validation and System Testing Validation testing is a concern which overlaps with integration testing. Ensuring that the application fulfils its specification is a major criterion for the construction of an integration test. Validation testing also overlaps to a large extent with system testing, where the application is tested with respect to its typical working environment. Consequently for many processes no clear division between validation and system testing can be made. Specific tests which can be performed in either or both stages include the following.Regression testing. Where this version of the software is tested with the automated test harnesses used with previous versions to ensure that the required features of the previous version are still working in the new version.

Recovery testing. Where the software is deliberately interrupted in a number of ways, for example taking its hard disc off line or even turning the computer off, to ensure that the appropriate techniques for restoring any lost data will function.

Security testing. Where unauthorized attempts to operate the software, or parts of it, are attempted. It might also include attempts to obtain access the data, or harm the software installation or even the system software. As with all types of security it is recognized that someone sufficiently determined will be able to obtain unauthorized access and the best that can be achieved is to make this process as difficult as possible.

Stress testing. Where abnormal demands are made upon the software by increasing the rate at which it is asked to accept data, or the rate at which it is asked to produce information. More complex tests may attempt to create very large data sets or cause the software to make excessive demands on the operating system.

Performance testing. Where the performance requirements, if any, are checked. These may include the size of the software when installed, the amount of main memory and/ or secondary storage it requires and the demands made of the operating system when running within normal limits or the response time.Usability testing. The process of usability measurement was introduced in the previous chapter. Even if usability prototypes have been tested whilst the application was constructed, a validation test of the finished product will always be required.

Alpha and beta testing. This is where the software is released to the actual end users. An initial release, the alpha release, might be made to selected users who would be expected to report bugs and other detailed observations back to the production team. Once the application has passed through the alpha phase a beta release, possibly incorporating changes necessitated by the alpha phase, can be made to a larger more representative set users, before the final release is made to all users.

Integration Testing Integration testing can proceed in a number of different ways, which can be broadly characterized as top down or bottom up. In top down integration testing the high level control routines are tested first, possibly with the middle level control structures present only as stubs. Subprogram stubs were presented in Section 2 as incomplete subprograms which are only present to allow the higher level control routines to be tested. Thus a menu driven program may have the major menu options initially only present as stubs, which merely announce that they have been successfully called, in order to allow the high level menu driver to be tested.

Top down testing can proceed in a depth-first or a breadth-first manner. For depth-first integration each module is tested in increasing detail, replacing more and more levels of detail with actual code rather than stubs. Alternatively breadth-first would proceed by refining all the modules at the same level of control throughout the application. In practice a combination of the two techniques would be used. At the initial stages all the modules might be only partly functional, possibly being implemented only to deal with non-erroneous data. These would be tested in breadth-first manner, but over a period of time each would be replaced with successive refinements which were closer to the full functionality. This allows depth-first testing of a module to be performed simultaneously with breadth-first testing of all the modules.

The other major category of integration testing is bottom up integration testing where an individual module is tested from a test harness. Once a set of individual modules have been tested they are then combined into a collection of modules, known as builds, which are then tested by a second test harness. This process can continue until the build consists of the entire application.In practice a combination of top-down and bottom-up testing would be used. In a large software project being developed by a number of sub-teams, or a smaller project where different modules were being built by individuals. The sub-teams or individuals would conduct bottom-up testing of the modules which they were constructing before releasing them to an integration team which would assemble them together for top-down testing.

User Acceptance Testing (UAT) is a process to obtain confirmation by a Subject Matter Expert (SME), preferably the owner or client of the object under test, through trial or review, that the modification or addition meets mutually agreed-upon requirements. In software development, UAT is one of the final stages of a project and will often occur before a client or customer accepts a new system.Users of the system will perform these tests which, ideally, developers have derived from the client's contract or the user requirements specification.Test designers will draw up formal tests and devise a range of severity levels. The test designer may or may not be the creator of the formal test cases for the same system.

The focus is on a final verification of the required business function and flow of the system, emulating real-world usage of the system. The idea is that if the software works as intended and without issues during a simulation of normal use, it will work just the same in production. These tests are not focused on fleshing out simple problems (spelling mistakes, cosmetic problems) or show stoppers (major problems like the software crashing, software will not run etc.). Developers should have worked out these issues during unit testing and integration testing.The results of these tests will give confidence to the customers of how the system will perform in production.

CTS (Change and Transport System)

The CTS is the central tool for managing changes to customizing and repository data that we make in the IMG or ABAP workbench.As we have discussed earlier, a transport request cab be either customizing request or ABAP workbench request.

A customizing request can be created by the customizing tool IMG.An ABAP workbench request can be created by ABAP workbench tool. Any changes or objects we develop through ABAP workbench are stored in Repository tables of SAP database.As an ABAP developer you will be working with ABAP workbench and thus you create work bench requests.

A functional consultant works with configuration tool IMG (SAP Implementation Guide) T-code SPRO, thus creating customizing requests.Transport organizer:Transport organizer is the tool provided by SAP which records and documents all changes to objects in the repository and customizing. The transaction code for transport organizer is SE10 or SE09.Transport organizer is fully integrated with ABAP workbench and customizing tool IMG. That means you can navigate in both directions from transport organizer to ABAP workbench and reverse also.

Development class:Development classes are used to group similar work objects that are being developed in a project.While creating development class we must assign it to the transport layer.All the objects assigned to that development class can be transported according to the routes defined in the transport layer.

Defining transport layer and routes is SAP BASIS administrator job. The transport layer defines transport route between the systems included in system landscape.The development classes are themselves objects in the ABAP workbench.The development class of a development class is always itself.

Change Request:Information source in the transport organizer that records and manages all changes made to repository objects and customizing settings during a development project.

Task:A task is assigned to a change request.It is the information carrier in the transport organizer for entering and managing all changes to repository objects and customizing settings performed by employees within a development project.

OSS

OSS stands for On-line Service System.

What is the use of OSS?In day-to day business customers who are using SAP software encounters problem or bugs with SAP software. To resolve the issues faced by customers SAP has provided an on-line solution.

What? SAP software is having problems or bugs?

Yes, any software product is not 100% pool-proof. SAP is continuously updating the versions for better performance and options.

Where can i access SAP OSS?

Log on to www.service.sap.com. Under the SAP Support Portal, click on SAP notes search.

Do i need user ID and password to enter into the OSS?

Yes, you need an User ID and Password to enter into the site. It will be provided by the BASIS Team in the Project. When they create SAP User ID, they will create OSS notes ID also.You can also register individually in the site.

What is OSS Notes number?

After entering into SAP notes search, you can search for the problem using keyword appropriate for your problem. If you have specific OSS notes number with you, then you can directly enter the OSS notes number and you can see the Notes explanation.

How to apply OSS notes number?

Before applying OSS notes number into your SAP system. You need to check whether it is already implemented in your SAP system or not. If it is not implemented you can go ahead.There are some OSS notes, which we should implement manually, that means we need to change the code in the programs/objects ourselves according to the steps mentioned in the problem.I did not find any OSS notes appropriate for my problem or bug.

What i have to do?

If the OSS notes displayed are not helpful to solve your problem. You can write to SAP Service describing your problem. You problem will be answered by SAP Support team.

System Landscape

The system landscape contains all systems that were installed. The customer can choose any landscape according to the requirements.If the customer is very big, one can implement four system landscapes. Mid size customers can go for two system landscape.Now we will see different system landscapes:Four System Landscape:In this landscape, we will find four systems,1) development system2) test system3) pre-production system4) production systemIn development system, we find three clients100140180100 can be used as configuration client. 140 can be used for development. 180 can be used for testing purpose in development system.The Test system contains two clients010040010 can be used for testing, where as 040can be used for training purposes.The pre-production system is the one which behaves exactly as production system. It contains data similar to production system. We can test with similar production data.Production system contains one client where the end users will be working with real time data supporting day to day business.

Three system landscape, we will find each dedicated server for development, test and production systems. You can assume the clients like above.

Two system landscape, the development and test systems are combined into one system.One client can be used for development and another can be used for quality.In any landscape, production system will be installed on dedicated server.

One system landscape is not recommended, where all three systems can be installed in a single

Finance Glossary

Account Assignment Model
An account assignment model is a reference for document entry. It can contain any number of account items that may be left incomplete. During document entry you can change, add to, or delete the proposed data. You can also call up any number of account assignment models and switch from a model to standard item entry procedure and back again. You can also assign equivalence numbers to account assignment models (i.e., utility bills shared across agencies). In this case, you simply enter a total amount that is then distributed to the items within the model according to set ratios.

Account Balance
Account balance is a representation of business transactions posted to an account in summary form. It is separated according to posting periods, debits, and date created. In addition, the balance of the posting period and the cumulative balance of the account are generated.

Account Sets
Account sets are groups of G/L accounts within the Chart of Accounts.

Accounting Document
AASIS stores transactions in an electronic form called a document. An accounting document records financial information for each transaction that occurs in AASIS.

Activity Types
Activity types can be utilized by many cost centers. An activity type is a standard rate to charge costs as a per unit charge (e.g., labor rate for plumbers).

Arrears
A term used to describe an account that is not current.

Asset Class
Fixed Assets are categorized into asset classes, for example, vehicles, furniture, machines.
Asset classes may include:
· Assets under Construction (AuC)
· Low-value assets
· Leased assets
· Financial assets
· Technical assets
Each asset master record must be assigned to one asset class. The asset class controls account postings.

Asset Document
An asset document is proof of a business transaction. Asset documents are a representation of the original document in the AASIS system.

Asset Under Construction (AuC)
An AuC is an asset that is in the process of being constructed (e.g., a building or road).
An AuC is a temporary asset and will not be depreciated. It will be distributed and settled in another transaction when the asset has been completed. Upon settlement, it will be capitalized and begin depreciating.

Balance Sheet
Balance sheet is an accounting statement of the organization at a specific time.

Blocked Status
A condition of material whereby it is unavailable for movement or allocation or reservation.

Blocking/ Unblocking
Blocking / Unblocking disallows or allows postings to G/L and A/P accounts.

Budget Control
Transactions entered in AASIS will check for budget. If budget is exceeded at the time the transaction is entered, an error will be issued and prevent the transaction from posting.

Budget Quad
Term used to represent the four elements of Budget Control. These elements are: Fund, Funds Center, Functional Area, and Commitment Item.

Capital Lease
Leases can be operating or capital. A capital lease is an asset that is on the books and is depreciated. It is an asset that is either intended to be purchased or used long enough that its residual value at the end of the lease is very low.

Capitalization
Capitalization is the posting procedure that established the fixed assets balance on the balance sheet.

Cash Journal
The cash journal is a bank accounting subledger for the management of cash in business. It supports posting cash receipts and payments. The cash journal can be used independently of other posting transactions.

Chart of Accounts (COA)
The Chart of Accounts (COA) is the systematically organized list of all the General Ledger account master records that are required in a company code. The COA contains the account number, name, and control information for General Ledger account master records.

Clearing Process
A procedure where open items in an account are marked cleared. You can clear open items if you can assign an amount of equal value to the opposite side of the account (debit or credit). The resulting balance of the items is zero.

Commitment Item
A commitment item equals a character code, which is a further breakdown of an agency’s appropriation and will be used in budget/actual variance reporting. It is one of the four elements of the Budget Quad that establishes budget control.

Contract/Outline Agreement
A legal agreement between the state and a vendor with the intent to procure materials or services of estimated quantity and known price.
Current term: Term Contract.

Cost Allocations
Methods of allocating costs from sender to receiver cost objects.

Cost Center
Master record organization unit that represents the operating structure, performance-based budgeting, cost pools and associated funding. They represent a defined location of cost incurrence.

Cost Elements
Cost elements describe the origin of costs. They are a master record description of revenues and expenditures. Cost elements are defined as either primary or secondary.
Primary cost elements are master record descriptions of revenues and expenditures. They have a one to one relationship with G/L accounts.
Secondary cost elements are master record descriptions of allocations used only in the Controlling module. They have no relationship to G/L accounts.

Cost Object
A cost object is a project, cost center or internal order.

Cycle Counting
A method of physical inventory where inventory is counted at regular intervals within a fiscal year.
These intervals (or cycles) depend on the cycle counting indicator (ABC indicator) set for materials. Cycle counting allows fast-moving items to be counted more frequently than slow-moving items.

Delivery Completion Indicator
This is a field value in the goods receipt process that, if selected, will indicate the delivery for a particular purchase order item is complete.

Depreciation
The asset master record contains the depreciation terms. The depreciation method is determined according to the asset class. The depreciation method is straight line. The Asset Manager determines the useful life when they create the asset record.
Depreciation is posted automatically on a monthly basis. There are 24 depreciation periods per year.

Document
The AASIS system records at least one electronic document for every business transaction. Each document receives a unique document number. The document remains as a complete unit and can be displayed at any time until it is archived.

Document Principle
AASIS stores transactions in electronic documents. Thus, each time you post transactional data, you are creating or maintaining documents.
A document is composed of a document header and line items. Each posting (document) must have at least the following information: document and posting dates, document type, company code, currency, posting keys, account numbers, and amounts. A document must balance before it is posted: that is, the debit amounts must equal the credit amounts.
Each posting receives a unique document number. Document numbers provide the audit trail for all transactions within AASIS.

Document Types
Document types are used to manage accounting documents in AASIS. The document type controls the document header and is used to differentiate the business transactions to be posted (for example, customer invoice, vendor payments, etc.). Documents can be viewed, sorted, and archived by document type.

Dunning
When a customer neglects to settle their account on time, a reminder note is sent requesting payment. In AASIS, this reminder is referred to as a dunning notice.
Effective Price
Price calculated taking into account all existing pricing conditions (e.g. taxes, delivery costs, and discounts). Also known as the net price.

Fixed Asset
A fixed asset is any non-inventory item that agencies must control.
Fixed assets include:
· Capitalized Assets - assets with a value of more than $1000 and a useful life of one year or more (e.g. Land, Buildings, Equipment, Land Improvements and Infrastructure)
· Controlled Assets - low dollar fixed assets that are easily accessible (e.g. cellular phones, handguns)
· Intangible Assets (e.g. patents, licenses, purchased software)
· Leased Assets

Functional Area
A Functional Area represents a CAFR program, as well as lower level programs as defined by agency needs. It is one of the four elements of the Budget Quad that establishes budget control.

Fund
A Fund represents Cash and Treasury Funds. The current comparison is to the fund, sub-fund, and sub-sub-fund structure. Each Fund in AASIS is an independent master data record and is one of the four elements of the Budget Quad that establishes budget control.

Funds Center
A Funds Center represents the purpose described in the appropriation act and is one of the four elements of the Budget Quad that establishes budget control.

Funds Management
The task of Funds Management is to budget all relevant revenues and expenditures for individual areas of responsibility and to control future funds movements according to the distributed budget, as well as preventing the budget from being exceeded.

General Ledger
The General ledger (G/L) serves as a complete record of all business transactions. This integral part of the Financials system is integrated with all relevant financial operations. Financial data is entered into AASIS and posted to the general ledger immediately.
The General Ledger is a financial accounting ledger that is defined for generating closing reports as required by law. The balance sheet and the income statement are based on the General Ledger.

Goods Movement
A transaction of materials that causes a change in inventory. The movement can be physical or status driven.

Goods Receipt
A goods receipt is a document in AASIS that acknowledges the receipt of a material or service from a supplier, other agency locations, or any outside contractors. This document is one of the three documents in the three-way match concept that must be recognized in the system in order for a vendor to be paid. The other two documents are the purchase order and the vendor’s invoice.
It is on the goods receipt that the Agency Goods Receipt Technician indicates the acceptance of the quantity and quality. AASIS will then automatically match this information with the purchase order and the vendor invoice before the payment can be made.
A goods receipt generates an expense against a funds center.

GR (Goods Receipt) Blocked Stock
Stock type in which materials that may be subject to conditional acceptance and not yet placed in final storage may be recorded into. ”GR blocked stock" is not yet regarded as part of the receiving company's own stock, but is tracked in the purchase order history.

GR/IR Clearing Account
The GR/IR account is a general ledger account that includes postings for goods received but not yet invoiced, and also postings for goods invoiced but not yet received.

Industry Sector
The industry sector indicates the branch of the industry in which the material will be used.

Info Record
Info records are unique records of particular vendor/material combinations. The info record contains data such as prices and conditions, the number of the last purchase order, tolerance limits, and planned delivery time (lead time) required by the vendor to deliver the material.

Intangible Asset
Intangible assets are considered fixed assets. They include:
· patents
· licenses
· purchased software
· goodwill

Internal Order
An internal order is a small or short-term job. They are like projects, just smaller. Internal orders are used as accumulators for temporary costs that may then be allocated to other cost objects.

Internal Order Plan
An internal order plan is a detailed budget to help track and report financial activity.

Inventory
An inventory in AASIS is all stock or items used to support production, maintenance, repair, and customer service. Inventory represents all things used to generate revenue such as rental capital assets, serialized materials, expensed materials, spare parts, and production materials held on the factory floor.

Inventory Management
Inventory management involves the maintenance of stock levels.

Inventory Materials
Inventory materials are stocks used to support production, maintenance, repair, and customer service.

Invoice Verification
Invoice verification is the entry and checking of incoming vendor invoices. Vendor invoices are compared with the purchase order and the goods receipt, and are checked for content, price, and quantity.
This is also referred to as a “Three-way Match.”

Journal
A list of all postings for a period, which can be generated at any time.

Journal Entry
A standard G/L journal entry is an ad hoc financial transaction triggered by a business event.

Ledger
Ledger is the framework containing specifications for representing transaction figures that apply to specific sub-areas of accounting and to a specific reporting or evaluation purpose.

Legacy System
A pre-existing system that interfaces with AASIS and is necessary to provide input.

Line Item Display
Line item display is the display of document line items for one or more accounts. The precondition is that the accounts are kept with line item displays.

Low Value Asset
A low value asset is one with a total cost of acquisition that does not exceed a specified amount. In AASIS, they are assets that are under $1000 and have a useful life of less than one year.
Low value assets are expensed in the month in which they are acquired.

Master Data
Master data is related information that forms the basis of all system processing. Master data is shared across application modules and it has an organizational aspect.
Master data records remain in the database over an extended period of time. Master data is usually created once and maintained centrally for all users to eliminate data redundancy. This also ensures data consistency and integrity.

Material
A material is an item that resides within an inventory that can be traded, used in manufacturing, consumed, or produced.
A service may also be treated as a material.

Material Group
Material group is a group of materials or services that have similar characteristics. Groups of unique materials or services on the Material/Service Master are linked to a commodity, (through a field called material group) like stationary or janitorial services.

Material Master Record
A material master record in AASIS is a data record containing all the basic information required to manage a material or service. It contains data of a descriptive nature as well as data that carry control functions.

Material Requirement Planning (MRP)
MRP calculates material requirements for the needed demand and creates planned orders and purchase requisitions to fulfill demand for a specific time.

Movement Type
A three-digit key that indicates the type of material movement occurring in AASIS. A movement type enables the system to find predefined posting rules determining how the accounts of the Financial Accounting system are posted.

Net Price
Price arrived at after taking all vendor surcharges and discounts into account. Also known as the effective price.

Non-Stock
Material that you purchase for immediate consumption. Non-stock will not be tracked in inventory after purchase.

Number Assignment
The process of assigning numbers to objects (for example, materials or documents).
In AASIS numbers can be assigned to objects internally (AASIS assigns) or externally assigned (user assigns the number to the object manually).

Open Items
Incomplete transactions, such as a vendor invoice which has not been paid. In order for an open item transaction to be considered complete, the transaction must have been cleared.

Open Reservations
Open reservations are unfilled material requests.

Order Price History
Series of prices representing the purchase prices charged by a vendor for a material or service over a certain period of time.

Order Unit
Unit of measure enabling Purchasing to order a material in a unit that differs from the base unit defined for the material.

Outline Agreement
An outline agreement is a legal, long-term agreement with a vendor in order to procure known materials or services with estimated quantities and known prices.

Over-delivery Tolerance
Percentage (based on the order quantity) up to which an over-delivery of this item will be accepted.

Parked Document
Document parking can be used to enter and store (park) incomplete documents in AASIS without carrying out extensive entry checks. Parked documents can be completed, checked and then posted at a later date--if necessary by a different user or a higher level of authority.
Documents can be parked when:
· there is not enough information to post a transaction
· a higher level of approval is required

Periodic Processing
Periodic processing is consistent periodic closings of general ledger accounts to enable period over period analysis and reporting.

Physical Inventory
A manual process whereby existing quantities of stock are recorded. The recorded physical quantities are compared to stock that is reported in AASIS.

Pick List
A list of materials to be picked/withdrawn from stock. The pick list process specifies what stock to pick in order to fulfill a reservation or perform a goods issue.

Plant
A plant is an organizational unit that provides materials and services.

Posting
A posting is each entry in a transaction that changes the balance on an account.

Posting Key
The posting key is a two-digit numeric key that controls the entry of document line items. The posting key identifies the account type, debit or credit posting, and the layout of the screens. The posting key also determines which account type (vendor, customer, or general ledger) can be entered in the account field when posting a document.

Price Comparison
Comparative listing of bidders’ prices for all items that are the subject of a bid invitation, in matrix form.

Primary Cost Elements
Primary cost elements are master record descriptions of revenues and expenditures. They have a one to one relationship with G/L accounts.

Professional Service Contract
Professional service contracts outline services that are provided by professionals, including but not limited to: architects, interior designers, engineers, consultants, etc. This does not include non-professional services like janitorial cleaning, pest control, elevator repair, etc.
Contracts for professional services are established using a purchase order.

Project
Grants, capital work and large maintenance jobs are projects.

Project Accounting
Project Accounting is an AASIS financial module designed to manage the financials of projects. This module helps to plan, manage, control and track the costs of projects. The common tasks revolve around allocation of people, resources and money within the framework of schedule and task relationships.

Purchase Order
A purchase order is a legal, short-term agreement with a vendor to supply known materials or services with fixed quantities and firm prices. It provides the vendor with a reference document to link to the shipping (goods receipt) and invoicing (invoice verification) processes.
Purchase Orders are currently known as Firm Contracts.

Purchasing Group
The Purchasing Group in AASIS is a three-digit code used to track activity against an individual Buyer and aid in the security of procurement documents. The Purchasing Groups represent both Agency Procurement Specialists and State Procurement Specialists.

Purchasing Organization
A Purchasing organization tracks procurement activity for a specified group of people.

Quotation
A Quotation is a vendor’s response to an RFQ and contains the vendor's pricing and conditions for providing the material or service stated in the RFQ. In AASIS, the RFQ and Quotation have the same document number. Changes made as a result of Quotations submitted will modify the appearance of the original RFQ for that vendor.

Reconciliation Account
Every time you post an invoice or other financial transaction data to a vendor, customer, or asset (which are sub-ledger accounts), AASIS automatically updates a general ledger reconciliation account, which mirrors the transaction. These reconciliation accounts ensure that the balance of the general ledger accounts is always equal to the detail in the sub-ledgers. As a result, it is always possible to print a balance sheet without transferring data from sub-ledger accounts to the general ledger.

Recurring Entries
Recurring entries are General Ledger journals that periodically post to pre-defined General Ledger accounts for pre-defined amounts.
The entries will not update account balances until the specified due date. The posting key, account, line item amounts and coding block information remain unchanged in recurring entries.
You must specify the first and last dates and the frequency or time interval. The recurring entry program uses the recurring entry document to create an accounting document. AASIS automatically posts the required transaction on each of the due dates.

Reference Material
A material whose master data you want the system to copy to a newly created master record so that you can use it as a default

Release Strategy
The set of rules used to determine the approval process for procurement documents. A release strategy defines the approval level required for procurement documents. The rules dictating which dollar values require approval are defined in AASIS by release codes. For certain documents, approval is required before the document can be processed (e.g. a requisition must be approved before it is converted to a purchase order).

Request for Proposal (RFP)
An RFP is an invitation to a vendor to propose a solution to a defined need. The state issues an RFP seeking a variety of alternatives to fulfill the need for materials or, more typically, services.
Where the RFQ almost always results in the awarding of a contract to a vendor, the RFP may not. In AASIS, the only difference between the RFQ and the RFP is the name (i.e. Request for Quotation vs. Request for Proposal) that is printed on the document sent to the Vendor.

Request for Quotation (RFQ)
A Request for Quotation is a request to a vendor to submit a quotation regarding the supply of materials or performance of services. The document initiates the formal bidding process. An RFQ can be issued directly to one or more vendors.

Requestor
Any state employee who identifies a need for materials or services. A requestor identifies the need and then forwards their request to an Agency Procurement Technician for input into AASIS.

Requirements Tracking Number
Number that facilitates the monitoring of the procurement of required materials or services.

Requisition
A requisition is a request or instruction to procure a certain quantity of a material or a service so that it is available at a certain point in time.

Reservation
In AASIS, a request to the warehouse (plant) to provide a particular material to the requesting unit.

Return Delivery
Delivery returning goods that are part of your stock to an external supplier. A return delivery references a purchase order or goods receipt

Scrap Material
Scrap material is material that is not usable due to shrinkage, spoilage, broken, damaged, expired, discontinued, or no re-sale value.

Secondary Cost Elements
Secondary cost elements are master record descriptions of allocations used only in the Controlling module. They have no relationship to G/L accounts.
Service
Intangible good characterized by the fact that its production and consumption, or usage, occurs virtually simultaneously.

Settlement Rules
Settlement rules are created to settle the costs to their final destination. The final destination can be a Cost Center, General Ledger Account, WBS Element, or another order.

Shelf-Life Management
Shelf-life management is the monitoring and planning of materials that have a limited useful life.

Shelf-Life Material
This is material that will be rendered unusable within a certain time frame.
The shelf-life date of a perishable material is normally entered at goods receipt.

Source of Supply
A source of supply can be an external source (vendor) or an internal one (for example, a central supply area) or outline agreements (longer-term purchase arrangements)

Special Purpose Ledger
Special Purpose Ledgers are collections of information from:
· AASIS application modules (FI, MM, CO, FM),
· external data transfers, and
· FI-SL (sub-ledger) adjustment postings in defined tables.
These defined tables then provide a database for user defined reporting.

Statistical Key Figures
Statistical key figures are used to record planned and actual statistical data. Values are stored in the Cost Center, Project or Internal Order structures.
Statistics can be used to allocate planned and actual costs.

Stock
Material that will be tracked in inventory.

Stock Overview
Overview of the stocks of a particular material across all organizational levels (for example, plant and storage location).

Stock Replenishment
Stock replenishment is the replacement of materials not associated with work orders or unplanned depletion.

Stock Transfer
A document that records the movement of stock from one location to another. This transfer is within a plant, such as from one storage location to another.

Stock/ Requirements List
Up-to-date overview of the stock situation of a material. The overview is generated using a function that draws together all the current and relevant data.

Storage Location
A storage location is an organizational unit that allows a difference of material stocks within a plant.

Subledger
Subledgers and the general ledger share the chart of accounts with all AASIS applications. Accounts Payable, Accounts Receivable, and Asset Accounting are subledgers. Subledgers provide more detailed information on the reconciliation accounts in the general ledger.

Synchronize Accounts
Synchronizing accounts means ensuring that the necessary links are created between G/L accounts and legacy systems or other AASIS modules.

Tax Code
Two-digit code that represents the specifications used for calculating and displaying tax.

Transactional Data
As individual transactions are posted in AASIS, transactional data is created. All the data that AASIS stores in documents is considered to be transactional data. Transactional data will vary depending on the module in which the posting occurs.
Some examples of AASIS transactions, which produce transactional data are:
· Enter a General Ledger Account Posting
· Process a Non-Purchase Order Invoice
· Create a Primary Cost Element
· Settle an Asset
Transactional data is created during normal day-to-day business transactions. Transactional data typically references master data and often takes advantage of information captured on a previous transaction.

Under-delivery Tolerance
Percentage (based on the order quantity) up to which an under-delivery of this item will be accepted.

Unrestricted Stock
Materials received into inventory that have no restrictions on the usage.

User Defaults
Pre-set values that AASIS automatically uses unless you enter a different value.

Value Contract
Contract (longer-term purchasing arrangement) which identifies the intent to purchase a certain value of materials or services.

Vendor
A business partner from whom materials or services can be procured externally in return for payment.

Vendor Evaluations
Vendor Evaluations is a program that provides a basis for decisions with regard to the selection and control of sources of supply. Vendor evaluations are automated based on a vendor’s timely delivery, recorded via the goods receipt, and accurate billing, recorded via the invoice.

Vendor Master Record
The vendor master record in AASIS is a data record containing all the information necessary for any contact with a certain vendor, in particular for carrying out business transactions. This record contains both Financial Accounting (Accounts Payable) and Purchasing data.

Vendor Partners
A vendor that is set up to function together with another vendor. Partners function in a “parent/child” relationship in AASIS.

Work Breakdown Structure (WBS)
A Work Breakdown Structure (WBS) is created when a project needs to track costs. It stores identification information for grant and capital work, i.e., CFDA, method of financing number, award or capital project number.

Work Breakdown Structure Element (WBSE)
WBS Elements are master records used to categorize various stages or programs of a project or grant with the associated funding.

Write-up
A write-up is the correction of past depreciation. Write-ups are necessary either when the depreciation posted was too high, or when the reasons for unplanned depreciation no longer exist.

Best Practice Guidelines for SAP Implementations

1. Build A Robust Business Case
What is often missed is the ‘how-to’ of building the benefits aspects of the business case. Factors which should be taken into account of legacy vs. SAP are at the levels of business process, application software and system technology. Your cost plan for the SAP solution should budget for the full life-cycle of the system, as well as the initial implementation and should include a level of contingency for unforeseen changes in scope, timeline and personnel.

2. Secure A Life-Time Sponsor
The successful implementation and sustainability of an SAP system requires committed sponsorship at the highest level in an organisation. The sponsor needs to be an ambassador for the project, and needs to have sufficient areas of responsibility that will be affected by, and will benefit from the implementation of SAP. The typical business roles of an SAP project sponsor should be at least the CEO, COO, CFO, Logistics Director or the HR Director.

3. Define An Implementation Plan That Suits Your Business
Many consultancies recommend ‘big-bang’, others recommend a ‘phased’ implementation of functionality. For large organisations with a geographical spread by global region or country, a phased rollout is the most logical and risk-free options.You should probe beyond these options to determine what is best for your business, and how the implementation plan will deliver the solution, whilst optimising the benefits, and managing the risk. Be realistic about the capability of your own organisation to adapt to changes in processes and systems, and ensure that the interdependencies with other change programmes are well understood.

4. Use The Correct Implementation Approach and Tools
The most commonly used implementation approach is known as ‘AcceleratedSAP’, with its successor now delivered with the SAP Solution Manager. Large Systems Integrators will seek to impose their own methodology; if this is the route you follow then be sure that you can absorb the costs of implementing and maintaining an implementation approach and its tools throughout the SAP systems life-cycle.The challenge is making sure that the implementation approach, and its specific application as used in the implementation project are appropriate for your business. For example in pharmaceutical, defence, aerospace and other regulated businesses, the demands for documentation and process controls far exceeds that required in a non-regulated environment.

5. Get External Assistance For Your First SAP Implementation
The internal IT or procurement department may recommend engaging ‘tame’ contractors or IT permanent staff to fill the positions normally taken in a project by the implementation consultants. This approach will eventually bring results, but on a ‘technical applications’ level after many extra time sheets have been signed. You are likely to get a solution that has replicated the ‘as-is’ business processes, with many enhancements and modifications to standard SAP that the IT department considers an easier way to satisfy the business users than challenging the business process.

6. Select The Implementation Partner That You Can Live With
Many organisations select their implementation partner based on purely these economic or strategic factors. Equally important is the cultural fit between your organisation and the consultants who will do the work. Be aware that just because you are offered a ‘sweet deal’ in pre-sales does not mean that this will measure up over time. One way of checking out your initial choice of implementation partner is to engage in a ‘Vision Prototype’ or ‘Proof of Concept’ utilising the SAP software and your processes and data. This can help gain mutual understanding of each other’s way of working and to decide whether you break off the ‘engagement’, or consummate the ‘marriage’.

7. Build The Right Project Team And Structure
The formation of a new project team is itself an exercise in change management for the team members themselves. They have to adopt new working practices, new organisations, work with external consultants, adapt to the SAP terminology and to consulting-style project practices. Often the team has the uncertainty of which job they will return to on completion of the project assignment. These uncertainties have to be recognised and a series of management initiatives undertaken to maintain team morale and motivation. A clearly defined project structure is needed, with workstreams for Project Management, Business Process Functionality, Organisational Change, End User Training, Data Migration & Interfaces, and Technical Infrastructure.

8. Design and Communicate Business Processes That Work
You will find that many consultancies and software companies will readily state that their processes and software deliver ‘best practice’, very few can actually demonstrate this. SAP software provides an excellent framework of integrated business processes that actually work, and with the SAP industry solutions and business knowledge from the right consultancy organisation even the most complex businesses can benefit from realigning their business processes to work within the SAP software environment. With the SAPNetWeaver architecture there is now the capability to adopt ‘non-SAP’ processes into the SAP environment, which will deliver further benefits through integration in a common applications and systems technology platform.

9. Help the Business Get Ready by Anticipating Organisational Change
Business readiness is one of the critical success factors for a successful implementation of SAP into an organisation. The areas for the team to focus on include communication, organisational mapping of processes & roles, training needs analysis, business partner communications, cutover planning. Be careful not to get diverted into the strategy and ‘buzzwords’ of Organisational Change Management (OCM) but focus on the practicality of ensuring the business users and support teams are ready for the system and it’s ongoing use in the business.

10. Manage The Data
The migration of data from legacy system to SAP often proves traumatic for many project teams – however this is just the tip of the iceberg when it comes to ensuring consistent and stable business processes, management reporting and low risk implementation. The project needs to plan for the expected data volumes and communicate to the business the new business processes for initiating, sourcing, creating, maintaining and auditing the master data in the new SAP system.

11. Select and Deploy the right Technical Infrastructure
The integration of a major new element of server infrastructure and the management of this environment represents a major opportunity for the optimisation of service delivery. The optimisation review could result in outsourcing through managed service of the hosting, operation and maintenance of the SAP environment. If you are retaining the service delivery ‘in-house’, make sure that the operational aspects of the environment are reviewed and that opportunities to improve service levels and reduce resource costs are taken.

12. Test Every Aspect of The Solution
Certainly SAP software is one of the most rigorously tested application software packages available for business use. The testing carried out in the project must verify that all aspects of the solution will work to the design and service levels of the business processes, application software and technology infrastructure.

13. Ensure Your Users Have The Right Skills
The most perfectly tested system, with the cleanest data and most stable technicalenvironment is worthless without properly trained users. The training deliverystrategy must be compatible with the demographics and geography of theorganisation. The most fundamental principle is that the training must be ‘contextualised’ to ensure that the new business processes as well as the system transactions are trained to the end-users.

14. Design and Deploy The Right Support Organisation
Once the project is successfully live your team will disband and move on to new roles in your organisation. The support organisation needs to be carefully defined and resourced for the SAP solution to realise the benefits promised as part of the business case. The SAP solution has a life-cycle that will outlive the implementation project. Certainly your organisation should plan for a normal life-cycle of between 10 and 15 years of productive business use of the SAP application.

COPA Best Practices

Recommendations for improving system performance and coping with high transaction volumes in costing-based CO-PA:

• Limit the number of segment level characteristics in the operating concern to only those necessary for reporting and making CO assessments.

• Work closely with the Basis team to make sure there is sufficient disk space for the CO-PA tables. Organize a separate directory on the server for CO-PA data. Since CO-PA often requires special technical attention, it is vital to have a significant level of Basis support.

• Optimize the secondary index in the CE4xxxx table. Since CO-PA looks up a profitability segment number in the CE4 table for each line item that is transferred from a billing document, indexes on the CE4 table play an important role in system performance. By default, the primary index (ID 0) is the key from the segment level table. The secondary index (ID 1) is customizable and includes a subset of the segment level characteristics. The smaller number of characteristics in the index allows the system to access data more quickly. The standard secondary index delivered by SAP may not be suitable for a particular level of reporting, so this index should be reviewed and customized for each project.

• Summarize line items in documents as they are transferred to CO-PA. This functionality reduces the number of line items in the CE1 table if multiple lines exist for the same item on a billing or financial document. You can maintain configuration for this type of summarization under IMG Actual postings > Initial Steps > Summarize data during update. If line items will not likely repeat on billing documents or financial documents, this recommendation will have the least impact on performance.

• Use summarization levels for reporting. If reports will be generated out of CO-PA, design
standard reports that use common characteristics. This way, a limited number of summarization levels can be created to improve report performance. By storing data at a summarized level, CO-PA takes less time to generate reports because the system has fewer lines of data to read. When configured, summarization levels act like segment level characteristics, but at a higher level. CO-PA has in built functionality that proposes summarization levels for specific reports.

• Use the “Fast Rollup�? method to fill summarization levels. A Fast Rollup method can be used to take a snapshot of CO-PA data and dramatically reduce the time required to fill summarization levels. Special system setup is required to use the Fast Rollup method because it uses a parallel query. OSS Note 136216 explains technical details for setting up the system. Instructions from SAP on how to use the Fast Rollup method are attached along with this document. Note that the Fast Rollup method requires a significant amount of Basis support.

Enterprise System Applicaiton Q&A

1. In R/3 you can represent a company's structure by defining and assigning corporate structure elements. What is the purpose of doing that?

This enhances the flexibility to adapt to the complicated structure of various kinds of companies. By using organizational unit (OU) in R/3 system, it is efficient to map and model the organizational structure of an enterprise. This is called global module approach, which is efficient and reliable.
Enterprise modelling refers to the planning and representation of the basic structure of R/3 across all system modules and taking into account of the following:
* Strategic business processes: Are all of the core business processes supported?* Information flows: Is all of the strategic information required for strategic decisions or for the daily operation of the enterprise available in a suitable form?* Distribution scenarios: Can the organizational structure be distributed to several, cooperating R/3 systems?* R/3 business objects: Can all of the R/3 business objects (sales order, requisition, and so on) be used as required?
Enterprise organization diagram. Chart showing the organizational structure of an enterprise, its organization units and how they are related. A combined structure can be created from the point of view of accounting, MM, SD. This structure forms a framework in which all business transactions can be processed.

2. Which three organisational elements make up a sales area and briefly explain their function?

i. Sales organization: An organizational unit that sells and distributes products, negotiates terms of sale, and is responsible for these transactions.ii. Distribution channel: Channel through which salable materials or services reach customers. Typical distribution channels include wholesale, retail and direct sales. You can assign a distribution channel to one or more sales organizations.iii. Division: Product groups can be defined for a wide-ranging spectrum of products. For every division you can make customer-specific agreements on, for example, partial deliveries, pricing and terms of payment. Within a division you can carry out statistical analyses or set up separate marketing.

3. What does the term "business area" refer to and how can it be used?

Business area is a component of one or more company codes, within the same controlling area that is set up for internal reporting purposes (whereas, company code is the smallest organizational element for which a complete, self-contained set of financial accounts can be drawn up for external reporting purposes).Example is two or more companies selling the same product line may create a common business area to report the combined results of that shared product line. BA is in FI module. B/S and P/L may be created within FI for business areas.

4. Define the relationship between sales organisations and company codes.

A sales organization is uniquely assigned to a company code, whereas more than one sales organization can be assigned to a company code. (Many-to-one)The sales organization is also used to take a regional, national or international subdivision of the market into account.

5. What is the central organisational element in purchasing?

Puchasing organization: an organizational level that negotiates conditions of purchase with vendors for one or more plants (manufacturing facility: central warehouse/ regional sales office/ corporate headquarter/ maintenance plant)

6. Define the relationship between sales organisations and plants.

In Sales and Distribution, a plant represents the location from which materials and services are distributed and corresponds to a distribution center. For selling a service, a plant can represent the location where services are rendered from (i.e., office).
More than one sales organization can be related to more than one plant. (Many-to-many)

7. Define the relationship between sales organisations, plants and company codes.

A plant must be uniquely assigned to a company code, although the assignment between sales organizations and plants does not have to be unique.(sales org: plants: company codes = Many-to-many-to-one)

8. Can one business area be assigned to several company codes?

Yes, because business area is a component of one or more company codes.

9. Which organisational element is central in shipping? Give a definition of it.

Shipping point: the highest-level organizational unit of shipping that controls shipping activities. (i.e., loading ramp, mail depot, rail depot or urgent delivery team) Each outbound delivery is processed by one shipping point.

10. Give a definition of plant (in SAP).

In SAP, a plant can represent a production facility or simply a grouping of storage locations in physical proximity, and also a location from which materials and services are distributed and corresponds to a distribution center.

11. Can you assign two different sales organisations to the same company code?

Yes, more than one sales organization can be assigned to a company code.

12. To what do you assign distribution channels and divisions?

Sales Organizations

13. What are the highest organisational units in SD, MM.PP,FI,CO?

SD: Sales Organizations.MM: PlantPP: PlantFI: Company CodeCO: Controlling Area

14. Can you further subdivide a plant? If yes into what?

A plant can be subdivided into storage locations, allowing stocks of materials to be broken down according to predefined criteria (e.g., location and materials planning aspects).A plant can also be subdivided into locations (takes geographical criteria into account) and operational areas (reflects responsibilities for production).

15. Can a sales organisation sell from a plant belonging to a different company code?

Yes.

16. How many shipping points can you assign to a plant?

More than one shipping points can be assigned to a plant.

17. How many shipping points can you assign to a sales organisation?

None.

18. Develop your understanding of accounting concepts

Which of the following statements are correct with regard to the Implementation Management Guide (IMG)?

A. The IMG consists of a series of Customising activities for defining a company’s business processes.
B. The IMG is an online resource providing the necessary information and steps to help you implement R/3 application modules.
C. The IMG is client-independent.
D. All of the above.

Which of the following strategies enables an enterprise to meet its business needs by changing or enhancing R/3 functionality?
A. Maintaining application data using the various R/3 business transactions in the SAP standard system.
B. Using the ABAP Workbench to create or modify the required R/3 Repository objects.
C. Using Customising to modify R/3 programs after obtaining an access key from SAP’s Online Support Services (OSS).
D. None of the above.

Which of the following statements is correct in regard to Customising?
A. Customising enables R/3 application processes to be set to reflect a company’s business needs.
B. Customising can be performed only on the production system.
C. Customising is necessary because R/3 is delivered without business processes.
D. None of the above.

What is the minimum number of clients and instances recommended by SAP for a typical installation? Why?

Three layers are recommended for typical installation by SAP.

Database Layer: a central database system containing all the data in R/3 system.

Application Layer: one or more application servers and message server.

Presentation Layer: software components that make up the SAPgui (Graphical user interface).

All the three layers form the multi-tier architecture. The advantages are distributed system loading, better system performance and higher system scalability.

19. Create a Company Code

True/False:
• You can create many Charts of Accounts for each Company Code.TRUE FALSE
Many company codes may share same chart of accounts, especially in large groups of companies.
• An account group must be used in the creation of GL master records.
TRUE FALSE
Each master record belongs to an account group.
• The fiscal year variant is optional for a Company Code.
TRUE FALSE
For posting transactions to periods, a fiscal year variant must be defined and assigned to the company code.
• An FI document may have an unlimited number of line items.
TRUE FALSE
Line items - individual debits and credits.A FI document has a document header and 2-999 line items.

Identify the 2 segments of a GL master record.

Chart of accounts and company code area.

What is a Reconciliation Account and where is it used?

Reconciliation Account is the account used to collect the sum of the corresponding account balances of sales invoices, credit memos and cash receipts in Subsidiary Ledger.Reconciliation Account is in company code area of GL master record.

Explain the nature and purpose of an account group for general ledger master records.

An account group includes accounts of the same type, e.g. current assets, bank accounts.The purpose of the account group is to simplify account creation and reduce errors.Account groups specify the field status of company code fields, when creating master records and number interval for selecting account number.

Distinguish the four possible field status definitions that can be applied to a field.

Fields in a field group may be assigned a field status:
* Fields which are not used can be suppressed.
* Fields which should not be changed can be set to display only.
* Fields which must have an entry can be made required fields.
* Fields which may have an entry can be set to optional.

The field status group for a general ledger master record is stored in the company code segment. What is its purpose?

Document entry fields needed can vary when posting to different accounts. E.g. when posting to an expense, a tax code is required. It is not required when posting to CASH.Field status group is included in company code segment of GL master record.It controls what data must be entered when posting to ‘this’ account.Field status groups are defined as a field status variant which is then assigned to a company code.

What are the 2 components of a FI document.

Document Header and Line Items

What conditions must be satisfied for the system to post an FI document?

Before posting, the system checks debits equal credits (in balance) and the amount of the posting is less than the tolerance permitted for the user.

20. Create a Customer in your Company Code

Distinguish the 3 segments of a customer master record. Give examples of fields in each segment.

Different data is maintained in each of the three areas:

General data, like address and telephone number, etc., is maintained for every customer. This data is only identified by the customer number, not by company code or sales area. Maintaining the data is possible from both the accounting view and the sales and distribution view. (Address, Control data, Marketing, Payment transactions, Contact person, Unloading points)
Company code data is only of interest for the accounting department. It includes, for example, information on insurance or account management. This data applies to only one company code.
Sales and distribution data is only of interest for the sales and distribution department. It includes, for example, data on pricing or shipping. This data only applies to one sales area, and therefore is dependent on the sales structure (sales organization, distribution channel, division).

Why is the maintenance of customer master records best managed centrally?

In addition to the sales and distribution data, the accounting data is also important for a payer. Therefore one can create a customer master record centrally for the following partner functions:

* For the payer
* For the sold-to party who, in addition to the other partner functions, also takes on the function of the payer.

What are one-time accounts? What form do their master records take?

One time customer accounts in SAP means they are account groups for customer where in only the general data of the customer are stored instead of maintaining the bank data and other company code data that are relevant for other account groups which are useful for long run purposes.

The business scenario where the vendor or customer which are being in system only for one transaction, it is not advisable to have all the data maintained in main master.
Therefore SAP has provided with the feature of One time customer wherein in the document entry stage only you have to enter the name, address and other details of the customer.

When transactions are posted through accounts receivable, what additional postings occur automatically to the general ledger?

Credit the relevant inventory in Material Management Module (LO-MM).
Debit the cost of goods sold (COGS) in the General Ledger Module.

Explain how tables BKPF and BSEG are used to store accounting transactions affecting general ledger accounts and customers.

In General Ledger (FI-GL), the evidence of a business transaction is the G/L document which includes:
* Document Header in BKPF table
* Document Segment/ Line items in BSEG table
* Tax information in BSET table

Tables BKPF and BSEG store the posting history for both general ledger accounts and subsidiary ledger records, thereby facilitating both integration of data and automatic reconciliation of subsidiary ledgers with reconciliation accounts.

21. Develop your understanding of cost allocation and flexible budgets
What is the relationship among client, company code, controlling area and cost centre?

Client is a self-contained unit with its own set of master records and tables, also assigned the meaning of the company cooperate group.
Client : company code : controlling area : cost centre= 1 : n : n : n

One or more company codes are assigned to a client, a company code is defined in exactly one client. (Client : Company code = 1 : n)

One or several company codes can be assigned to a controlling area.

A cost centre is assigned to exactly one controlling area.

Several cost centres can be assigned to a company code. A cost centre is assigned to exactly one company code.

What attributes must be shared by a controlling area and the company codes assigned to it?

The controlling area is the central organizational unit of the Controlling (CO) component. You use the controlling area to carry out cost accounting.
If you implement the Controlling component, postings are forwarded from Financial Accounting to Controlling. During posting, you can specify any additional account assignments relevant for cost accounting (for example, cost center or internal order). You must assign a controlling area to your company code to ensure that this data is forwarded to Controlling for further processing for cost accounting.

The company code and controlling area do not have to exist in a one-to-one relationship.

You have the following options for this :
* The company code can correspond to exactly one controlling area (see the following figure, 1).
* Several company codes can correspond to one controlling area (see the following figure, 2).

Why must all cost centres be assigned to the standard hierarchy?

A cost centre is an organisational unit in a controlling area. Cost centres may be grouped to provide summary reports, reflected in the standard hierarchy.
The cost centre standard hierarchy must be defined before cost centres are created. New cost centres must be assigned to a cost centre group (node).
The standard hierarchy is a special cost centre group.

What is the difference between an activity type and a statistical key figure?

An activity type is some form of productive output by a cost centre
(eg. Labour hours, no. of requisitions).
Activity type classifies the activities provided by one or more cost centres within an organisation.
Activity types are measures of the productive output of a cost centre and used in allocating costs to other cost centres.
Statistical key figures define measurable values applicable to cost centres. Statistical key figures are statistical values describing cost centres, eg. number of employees (both plan and actual).
Statistical key figures (values for a cost centre) are used as the basis (tracing factor) in re-allocations (assessments, distributions).
Cost centres are areas of responsibility that generate costs.

What is the difference between a primary cost element and a secondary cost element?

Cost elements are either primary or secondary cost elements. Primary cost elements arise through external transactions recorded in FI.
Secondary cost elements relate to internal re-allocation of costs.

Why must prices be planned for activity types?

It is useful to predict reliably how costs will be affected by decisions regarding activities.

Consider the costs of the information systems department. How should costs be allocated to user departments?

Planning activity/output prices specifies the cost centres that provide which activity types at what price.

22. Create Cost Centre Master Data

If an FI posting has debited the wrong cost centre, what can you do to correct the error?

Primary costs may be reposted manually within CO to adjust posting.

If an FI posting has debited the wrong general ledger account but correct cost centre, what can you do to correct the error?

Incorrect primary cost element with correct cost centre, the transaction must be reversed in FI
Reposting may be performed automatically periodically to allow an FI posting to a clearing cost centre to be reallocated within CO.

What data is needed to record a direct activity allocation?

Direct activity allocation allows services provided to be measured, entered and allocated.
An activity type must be created to measure the service.
Data required:
Sending cost centre, activity type, activity consumption,
receiving cost center/order, secondary cost element.

What data must be entered to process a segment in an assessment cycle?

Planned costs must be entered by primary cost element for each cost centre.
Planned statistical key figures and percentages must be entered.
The planned costs are then reallocated to other cost centres using similar functionality to that used for actual postings.

R/3 can have up to 16 posting periods whereas first 12 months correspond with the months in fiscal year and the next 4 months (13th to 16th) not necessarily correspond with particular months.The 4 extra posting periods are to allow for adjustments which occur after the financial year-end but need to be recorded in the prior financial period.Adjustment examples:Balance day adjustment, inter-company transactions and auditor requested adjustment.In R/3, Financial Accounting modules like Assets(A), Customers(D), Vendors(K) and G/L accounts(S) are shown separately and need not to be closed off at the same time ( independent opening and closing of posting periods).i.e., Customers are opened for a longer period (record more sales) than Vendors (record fewer expenses).

Some Interview Q & A

1.Using Field status, fields can be selected on surpress,required and optional mode?Is any other way to do the same?

It can be done through transaction variants


2.In automatic payment program,after all the payments are done,can it be reversed?

You can reverse the posted documents and reset the clearing / cancel cheques etc.

3.In year-end closing all the balances are transfered to next year, but accidently some enteries were left out,can they posted again?

If the periods are not closed and you are still in the finalization stage, then the answer is yes. Otherwise it is not advisable to post, however you can.

4.Can Business area be assigned to Co.Code?

You can assign business areas to plant/division, sales area but not to company code.

5.Depreciation area: Which depreciation will be updated in SAP:Companies Act or Income Tax-India?

Depreciation gets posted to the book depreciation area 01 online - so it would update the Companies act relevant Depreciation. The Income tax depreciation area also can be posted periodically if you have defined a depreciation area as per Indian Income tax act.

6.If a check is cancelled, can the same number assigned to a new one?

No

Currencies in SAP World

DIFFERENT TYPES OF CURRENCIES

TRANSACTION CURRENCY - Currency in which the transaction is denominated.

FUNCTIONAL CURRENCY - Currency in which company conducts its business. E.g., some Latin American companies might conduct business in USD because of high inflation rates.

LOCAL CURRENCY (currency type 10) - normally it is the functional currency of the country where the company code is registered; legal/statutory currency e.g., CAD for Canadian company.

PARALLEL CURRENCY - Not normally activated. If functional currency is not same as statutory currency, parallel currency can be activated. E.g., High inflation currency where there is a need to see both currencies at the transaction level. Defined at the company code. Company will have local currency plus two parallel currencies.

GROUP CURRENCY (currency type 30) - currency defined in client master; normally this is also the consolidation reporting currency for the group; If using Group Currency in FI it is advised to use Group currency in CO as well.

AA Configuring Steps

Step 1:
FA – AA – Org structure – copy ref COD areas(it will prompt u a window) – copy from ref co code to ur source Co code – specify description of COD(just give name of ur COD) – copy,delete dep areas.

Step2:
FA – global settings – Tax on sales& purchases – posting – assigning taxcode to non taxable transactions – in that select your co code – and give V0 in input & A0 in output.

Step3:
FA – AA – org structure – assign COD to co code – save

Step 4:
FA – AA – org structure – asset classes – specify a/c determination

Step 5:
FA – AA – org structure – asset classes – create screen layout.

Step 6:
FA – AA – org structure – asset classes – define number range – give 01(always) and enter the number range.

Step 7:
FA – AA – org structure – asset classes – define asset classes – new entries(a window will appear and start creating ur co asset classes)

Step 8:
Creating GL (asset a/c, depreciation a/c, Acc depreciation a/c for all the asset classes u defined, profit on sale GL, loss on sale GL, Scrap GL) thro FS00.

Step 9: (Integration)
FA – AA – integration with GL – assign GL a/cs – select ur co COA – on left most corner d/c account determination – select any one asset class – select B/S account – and start mapping the GL you created in the step 8 in the area of acquisition, loss made on asset retirement w/o rev, clearing , gain from asset sale, loss from asset sale– on left most d/c depreciation – in ordinary deprecation – start mapping a/cs of Acc depreciation and depreciation(created thro FS00 in step 8) to acct dep for ordinary dep and expense account for ordinary dep respectively – save

Step 10:
FA – AA – integration with GL – post deprec thro GL – specify doc type for posting of deprec.

Step 11:
FA – AA – integration with GL – post deprec thro GL – specify intervals and posting rules

Step 12:
FA – AA – master data – screen layout – define screen layout

Step13:
FA – AA- master data – define screen layout for asset dep areas

Step 14:
FA – AA – valuation – amount specification – specify rounding of net book value and/or dep

Step15:
FA – AA – depreciation – valuation method – depreciation key – calculation method – define base method.

Step 16:
FA – AA – depreciation – valuation method – depreciation key – calculation method – define declining method

Step17:
FA – AA – depreciation – valuation method – depreciation key – calculation method – define multilevel method.

Step 19:
FA – AA – depreciation – valuation method – depreciation key – calculation method – maintain dep key.(repeat the same for declining method too)

Step 20:
FA – AA – valuation – determine dep area in asset classes
-------------------------------------------------------------------------------------------------(2 step in functional posting)
1. Perform Tcode AS01.
2. Perform Tcode F-90(acquisition).

Brief Note (Summary) of AA

1) Chart of depreciation are usually country specific and defined independently of the other organizational unit. A chart of depreciation can be used by all company code of a particular country.

2) Assets can be managed in parallel upto 99 deprecation areas; a depreciation area is always assigned to only one chart of organization.

3) Chart of depreciation contains different depreciation keys and different depreciation areas.

4) Chart of depreciation cannot be created directly one can create own chart of depreciation by copying it from others.

5) Chart of depreciation will be assigned to company code.

6) The assignment of company code to chart of account is independent from its assignment to a chart of depreciation. This means that several company codes can use the same chart of depreciation although they have different chart of depreciation.

7) The account assignment is controlled by means of the assets class in assets accounting, we have to specify an account determination in each assets class. In this account determination we will specify the G/L account in which automatic posting place for different transaction.

8) Assignment of assets to company code, we have to enter a company code , when we create a assets . This ensures that each asset is always uniquely assigned to a company code.

9) If we enable business area balance sheet at the time of G/L maintainance , then we need to assign assets to business area.

10) The plant has no assets account relevance, but it can be used for as a short and selection criteria for report. Plant can be a asset in assets master data.

11) Assets in assets accounting is assigned to exactly one cost center in its master maintains.

12) The cost center assignment of fixed assets can be set at beginning of a specific day. If this
date change over the course of time, the system distribute depreciation and interest according to the appropriate period to the different cost center, where by costs are always allocated to the cost center valid at the end of the depreciation period.

13) A cost center can also be assigned to a business area as a assets can. In assets master maintaince , therefore the system ensures that the business area of the cost center matches the business area of the assets.

14) Assets can be assigned to profit center indirectly by means of the cost center.

15) If assets are assigned to more then one cost center, then cost can be distributed by using a distribution cost center.

16) Assets can be structure at the several level in the system

a. Balance sheet level
b. Classification level
c. Assets related level

17) We can assign any number of chart of depreciation to each class of assets.

18) We can create screen layout control at assets class level, that carries certain values for assets master.

19) Creation of assets master is a customizing activity. Account determination is the most important function of the assets class. Several assets class may use same account determination key.

20) Changes in the master data in the assets class only have a affect on assets created after the changes made. The system doesn’t automatically carry out the changes for assets that already exist. For this purpose we should use the mass change procedure.

21) Assets class controls various important information of assets master.

a. Account determination
b. Depreciation terms
c. Screen layout
d. Field attributes
e. No assignment.

22) Deactivation of depreciation area can be done at assets class level or assets level.

23) Assets under construction can be managed in the system as individual master record just as we do completed assets. We can also use collective management of several assets under construction on one master record. we can distribute to the proper assets when the assets under construction completed by using either
a. Line item settlement
b. Simple transfer of other assets master record.

24) While setting deprecation areas at company code level , we are setting of values for low value assets.

25) Low value assets can be managed either 1. Individual Check, Individual management 2. Quantity check, collective management.

26) There are two different method of handling of lease assets.
1. Capitalize the lease assets and charge depreciation as on ordinary assets.
2. Treat period payment payment as rent and charge to P & L account.

27) If an asset consists of several component assets, it may make sense to monitor the individual sub assets separately. For complex assets, there is often a need for uniform depreciation of the assets in the book depreciation and tax depreciation areas. Whereas for cost accounting purpose the sub assets should be depreciated separately.

28) Reasons for managing component assets as sub numbers

a. The development values for component assets are separate for each sub numbers.
b. The sub number can have different cost accounting assignment.
c. The assets can be divided along technical line.
d. Investment support can be represented as negative sub numbers.
e. If it is necessary to manage subsequent acquisition separately in order to be able to monitor their depreciation and book value separately. we must manage this acquisition on independent sub numbers.

29) By means of screen layout control for the assets class , we can specify whether the depreciation term van be maintained at the sub numbers level.

30) The currency in the master deprecation area has to be identical to the local currency in the company code. we can manage other depreciation areas in the currency we like.

31) It is recommended that we should define all the depreciation areas we might need before the production start up of the system. However if a special need arises , it is possible to define a new depreciation area after production startup and add assets to this depreciation area.

32) we can also delete depreciation area . The depreciation area we want to delete must meet the following requirement.
a. It can n’t be the master area 01
b. There can be no assets value in the depreciation area.
c. The area can not be a reference area for another area, if it is a reference area , we should change the definition of the area that are dependent on the depreciation area we want to delete.
d. The area cannot be used in the calculation formula for derived depreciation area , if it is used in a calculation formula we need to change the calculation formula for the derived depreciation area.

33) When we post with account assignment to an assets , the system determines the G/L account that is posted based on four things the chart of account valid in the company code , the chart of depreciation , the depreciation area that is to be posted, the account allocation key and the transaction type.

34) If we use assets accounting in congestion with cost accounting and / or FI general ledger the following additional account assignment are possible , depending on the business transaction to be posted
a. Business area
b. Cost center/ internal order
c. Profit center
d. Fund center.

35) If some one has entered additional account assignment for both an order and a cost center at the same time , the order take precedence. How ever the order does not take precedence is it a stastical order , the the account assignment to both stastical order and cost center is possible.

36) Assets accounting use the same fiscal year variant as in the general ledger , If there are special circumstances however we can use different fiscal year version in each company.

37) It is only possible to enter one cost center in the master record. The only way to distribute depreciation and interest to different cost centers is to use settlement with in cost accounting. The cost center in the master record then serves the function of a distribution cost center. The disadvantage of this approach is that report shows only the distribution cost center and not the cost center that are actually debited.

38) It is possible to enter an activity type in the assets master record along with the cost center when a activity type is entered all the debits that have account assignment to the cost center are also posted automatically to the activity as well.

39) we can specify that the posting values from one depreciation area are updated automatically online to general ledger accounts. we can updates other depreciation areas to the general ledger using periodic processing.

40) Depreciation key contains all control data for calculation of planned annual depreciation. we can enter a depreciation key in each depreciation area in the assets master record.

41) we can enter a screen layout rule in one of the two places, either in the part of the assets
class valid in the entire client or in the part of the assets class valid for the chart of depreciation.

42) If some one has entered additional account assignment for both an order and a cost center at same time , the order take precedence that is there is no account assignment to the cost center. How ever the order does not take precedence if it is a statistical order. If the order is
statistical , then account assignment to both statistical order and the cost center is possible.

43) The depreciation key contains all control data for the calculation of planned annual depreciation. You can enter a depreciation key in each depreciation area in the assets master.

44) The system uses calculation methods for the calculation of depreciation methods to depreciation keys. The calculation methods provide the parameters for depreciation calculation program.

45) The assets main no. has 12 alphanumeric characters. Number assignment is controlled by the assets class. we specify the number range for an assets class in the assets class. In this way we ensure that number assignment in uniform for the assets class. we can choose between external and internal number assignment by specifying a correspondingly defined number range. Several assets class can use same number range.

46) The field status is control by two things.
(1) fields status group attached to accounts group.
(2) field status attached to posting keys.

47) Depreciation key contain calculation method for depreciation calculation and parameter that controls

a. Ordinary depreciation
b. Special depreciation
c. Scrap value
d. Calculation of interest.
We can enter separate depreciation key for each depreciation areas.

48) Calculation Method: Calculation method determines how depreciation will be calculated. Calculation methods are assigned to deprecation keys. The calculation methods may be dependent to COD or may be independent.

e. Independent calculation method to COD
i. Base method

f. Dependent calculation method.
i. Declining balance method
ii. Maximum amount method.
iii. Multi level method
iv. Period control Method.