1. Financial Reports EGN 5622 Enterprise Systems Integration Spring, 2017

2. Financial Reports Concepts & Theories

3. Version 1.0
January 2007
Financial Reports
Type of Financial Reporting in Enterprise Systems (ES):
- internal reporting, and
- statutory (external) reporting.
Through reports internal and external stakeholders can understand the organization’s financial performance
The Rushmore Group, LLC

4. Financial Reports (- continued)
Version 1.0
January 2007
Financial Reports (- continued)
Internal Reporting:
Provides reports that meet a wide range of internal informaton needs and enable
managerial decision-making.
Examples: inventory stock overview and plant maintenance reports
External Reporting
Provides reports to meet regulatory and external reporting requirements.
Examples: balance sheet, income statement
The Rushmore Group, LLC

5. Target Audience External Internal Legal Authorities Executives Banks
ECC 6.0
January 2008
Target Audience
External
Legal Authorities
Banks
Auditors
Shareholders
Insurance
Taxing Authorities
Media
Financial Analysts
Internal
Executives
Senior Management
Account managers
Administration Staff
Employees
There are two types of audiences: Internal and External.
Internally: The employees who run the company. This gives them the information needed to make decisions.
Externally: Anyone who has a financial stake in the company. This could be shareholders, creditors, government (taxes, fraud, etc.) insurance companies, or anyone who would like to purchase shares of the companies stock.
© SAP AG and The Rushmore Group, LLC 2008

6. Financial Reports (- continued)
Version 1.0
January 2007
Financial Reports (- continued)
Guidelines for efficient and cost-effective reporting processes
Ensure optimal decision making through the improved use of information
Reduce data complexity through smooth data flow
Concentrate on data analysis instead of scanning printed reports
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7. Financial Reports (- continued)
Version 1.0
January 2007
Financial Reports (- continued)
Two categories of financial accounting reports:
displaying accounting information, and
generating financial statement.
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8. Financial Reports (- continued)
Version 1.0
January 2007
Financial Reports (- continued)
Accounting Information
Accounting information can be obtained at three levels according to the “Introduction to Financial Accounting”:
balance display,
line item list, and
original FI document
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9. Financial Reports (- continued)
Version 1.0
January 2007
Financial Reports (- continued)
Balance Display
Line Item List
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10. Financial Reports (- continued)
Version 1.0
January 2007
Financial Reports (- continued)
Original Document
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11. Financial Statements Goal of financial statements:
Version 1.0
January 2007
Financial Statements
Goal of financial statements:
report data to meet legal and regulatory requirements.
Forms of financial statements:
Balance sheet
Income statement (profit and loss), and
Cash Flows statement
Specific accounts included in these statements are determined by the external requirements.
The Rushmore Group, LLC

12. Version 1.0
January 2007
Financial Statement
Financial statements can be generated for different organizational levels including one or more company codes and business areas.
Financial statements are created from financial statement versions.
A financial statement version is a hierarchical grouping of general ledger accounts that must be included in the financial statement.
Several financial statement versions can be defined, and each is defined to meet different reporting requirements.
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13. Financial Statement Version
January 2007
Financial Statement Version
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14. Financial Statement A conceptual framework for financial analysis
Version 1.0
January 2007
Financial Statement
A conceptual framework for financial analysis
In the analysis of external financing for example, one is concerned with firm’s needs for funds, its financial condition/performance, and its business risk.
Upon analysis of these factors, senior managers are able to determine the firm’s financial needs and to negotiate with outside suppliers of capital.
The Rushmore Group, LLC

15. Financial Statement Balance sheet summarizes
Version 1.0
January 2007
Financial Statement
Balance sheet summarizes
Assets,
Liabilities, and
Owner’s equity of a business at a point in time.
Income statement summarizes
revenues
expenses of a firm over a particular period of time
incomes before and after tax
The Rushmore Group, LLC

16. Version 1.0
Financial Statements
January 2007
Balance sheet accounts include assets, liabilities, and equity.
Assets = Liability + Equities
Profit and loss accounts include revenue and expenses within a given period of time (e.g., monthly, quarterly, or yearly)
Cash Flows (Statement)
The Rushmore Group, LLC

17. Balance Sheet – Assets Assets
ECC 6.0
Balance Sheet – Assets
January 2008
Assets
Value that a company owns or controls in monetary terms.
Examples of these accounts include:
Current assets:
Cash
Accounts receivables (A/R)
Inventory
Prepaid expense
Fixed assets
Land
Building
Equipment
Balance sheets
Assets
liability
Owner’s equity
Assets (good guys) generally good
Inventory is often an exception (too much is bad)
This is what the company owns or has
Balance Sheet
Invoice-based closing for a group at a specific point in time (financial statements key date) in the form of a comparison of assets and capital (liabilities and owner's equity). Assets and capital reflect the same total value. This is expressed in the balance sheet (assets = capital).
© SAP AG and The Rushmore Group, LLC 2008

18. Balance Sheet – Liabilities
ECC 6.0
Balance Sheet – Liabilities
January 2008
Liabilities:
Company owes or must provide services in monetary terms.
Examples of these accounts include:
Accounts payable (A/P)
Notes payable
Bonds payable
Unearned revenue
Liabilities
Bad guys –
What a company owes to settle the accounts
Typically debt
Balance Sheet
Invoice-based closing for a group at a specific point in time (financial statements key date) in the form of a comparison of assets and capital (liabilities and owner's equity). Assets and capital reflect the same total value. This is expressed in the balance sheet (assets = capital).
© SAP AG and The Rushmore Group, LLC 2008

19. ECC 6.0
Balance Sheet – Equity
January 2008
Equity is simply the mathematical difference between assets and liabilities.
It includes the monetary amounts collected with respect to
all preferred and common stock transactions,
the aggregate net income reported from organization of the company, and
a reduction for dividends that have been paid to stockholders.
Balance Sheet
Invoice-based closing for a group at a specific point in time (financial statements key date) in the form of a comparison of assets and capital (liabilities and owner's equity). Assets and capital reflect the same total value. This is expressed in the balance sheet (assets = capital).
© SAP AG and The Rushmore Group, LLC 2008

20. Balance Sheet – Sample Assets Liabilities Equity Cash 1,000 k
Version 1.0
Balance Sheet – Sample
January 2007
Assets
Cash 1,000 k
Accounts Receivable 3,000 k
Equipment 1,500 k
Total Assets 5,500 k
Liabilities
Accounts Payable 2,250 k
Taxes Payable k
Total Liabilities 2,500 k
Equity
Stocks 1,750 k
Retained Earnings 1,250 k
Total Equity 3,000 k
Total Liabilities
and Equity 5,500 k
The Rushmore Group, LLC

21. Balance Sheet – Sample Accounts Cash 1,000 k
Version 1.0
Balance Sheet – Sample
January 2007
Accounts
Cash 1,000 k
Accounts Receivable 3,000 k
Equipment 1,500 k
Accounts Payable 2,250 k
Taxes Payable K
Stocks 1,750 k
Retained Earnings 1,250 k
The Rushmore Group, LLC

22. Balance Sheet ECC 6.0 January 2008 Assets top Liabilities middle
Owner’s equity bottom
Compares one year the next
January 2008
© SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.
© SAP AG and The Rushmore Group, LLC 2008

23. Version 1.0
Income Statement
January 2007
Presentation of an organization’s Revenues, Expenses, and Income for a given period of time (e.g., monthly, quarterly, or yearly)
Revenues:
- Inflows of cash as a result of selling activities or the disposal of company assets
Expenses:
- outflows of cash or the creation of liabilities to support company operations
Net Income before TAX= Revenue–Expenses
Net Income after TAX= Revenue-Expenses -Tax
The Rushmore Group, LLC

24. Income Statement – Revenues
ECC 6.0
Income Statement – Revenues
January 2008
Monetary amounts collected from customers in settlement for goods purchased from a company or services rendered by the company to them during a period.
Examples:
Sales amount
Deduction (Negative sign)
Income Statement (Profit and Loss Statement)
Comparison of revenue and expenditure of a period to determine the results for the company and the sources of these results.
Often called the “P&L”
© SAP AG and The Rushmore Group, LLC 2008

25. Income Statement – Expenses
ECC 6.0
Income Statement – Expenses
January 2008
Monetary amounts paid to vendors in settlement for goods purchased by a company or services rendered to the company by other companies during a period.
Exaqmples:
Cost of Goods Sold (COGS)
Payroll
Utilities
Taxes
Interest
March 1st 1913 – Many companies have this as their fiscal year.
© SAP AG and The Rushmore Group, LLC 2008

26. Income Statement - Sample
Version 1.0
Income Statement - Sample
January 2007
Revenue
Sales 11,000 k
Deductions k
Total Revenue 10,250 k
Operating Expenses
Cost of Goods Sold ,500 k
Operating Expenses ,750 k
Total Expenses ,250 k
Net Income Before Taxes 2,000 k
Taxes k
Net Income ,250 k
The Rushmore Group, LLC

27. Income Statement - Sample
Version 1.0
Income Statement - Sample
January 2007
Accounts:
Sales 11,000 k
Deductions k
Cost of Goods Sold ,500 k
Operating Expenses ,750 k
Taxes k
The Rushmore Group, LLC

28. Income Statement ECC 6.0 January 2008 Revenues Expenses
Profit on bottom
Microsoft’s income statement
January 2008
© SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.
© SAP AG and The Rushmore Group, LLC 2008

29. Statement of Cash Flows
Version 1.0
January 2007
Statement of Cash Flows
Changes, both inflows and outflows, that have occurred in cash – the most important of all assets – over a given period of time (e.g., monthly, quarterly, or annually)
January 2007 (v1.0)
© 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC
The Rushmore Group, LLC

30. Version 1.0
Financial Ratios
January 2007
Financial ratios are the tools used to analyze financial condition and performance. Financial ratios can be divided into five basic types:
Liquidity,
leverage (debt),
coverage,
activity, and
profitability.
No one ratio is itself sufficient for realistic assessment of the financial condition and performance of a firm. With a group of ratio, reasonable judgments can be made.
Comparing one company with similar companies and industry standards (Benchmark) over time is crucial. Such a comparison uncovers leading clues in evaluating changes and trends in the firm’s financial condition and profitability. This comparison may be historical, but it may also include an analysis of the future based on projected financial statements.
The Rushmore Group, LLC

31. Version 1.0
Financial Ratios
January 2007
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32. Version 1.0
Financial Ratios
January 2007
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33. Financial Ratios EBIT – Earning before interest & Tax Version 1.0
January 2007
EBIT – Earning before interest & Tax
EBIT – Earning before interest & Tax
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34. Version 1.0
Financial Ratios
January 2007
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35. Version 1.0
Financial Ratios
January 2007
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36. Financial Reports SAP Implementation

37. SAP Module View Integrated Solution Client / Server Open Systems
Financial
Accounting
Sales &
Distribution
Materials
Mgmt.
Controlling
Production
Planning
Fixed Assets
Mgmt.
Integrated Solution
Human
Resources
Project
System
Client / Server
Quality
Maintenance
Open Systems
Workflow
Plant
Management
Industry
Solutions

38. SAP Reports Tools SAP Standard Reports (in focus) SAP Query
Version 1.0
January 2007
SAP Reports Tools
SAP Standard Reports (in focus)
Asset Explorer
SAP Query
ABAP Report
Data Warehouse
The Rushmore Group, LLC

39. SAP Standard Reports SAP has thousands of reports available to use.
Version 1.0
January 2007
SAP Standard Reports
SAP has thousands of reports available to use.
Each report can be customized by the user to meet different report requirements, by setting different report selection criteria.
The Rushmore Group, LLC

40. SAP Query Used to run queries on SAP tables to return data.
Version 1.0
January 2007
SAP Query
Used to run queries on SAP tables to return data.
Before engaging in SAP Query, the user should look at the available standard reports in SAP; those reports that are based on the same tables should be able to return the same type of data the user is looking for.
The Rushmore Group, LLC

41. Version 1.0
January 2007
ABAP Report
ABAP (Advanced Business Application Programming) is used to code SAP software and can also be used to customize reports.
The downside of ABAP may not be automatically compatible with upgraded versions.
The Rushmore Group, LLC

42. Version 1.0
January 2007
SAP Data Warehouse
SAP Netweaver Business Intelligence (BI/BW) is SAP’s own data warehousing tool
One benefit of using a data warehouse is that it reduces the load on SAP ECC (ERP Central Components) system.
The downside is that the data warehouse solution will be only updated overnight, then the data to be used may not be updated to the moment.
The Rushmore Group, LLC

43. SAP Standard Reports Three basic steps to running a standard report:
Version 1.0
January 2007
SAP Standard Reports
Three basic steps to running a standard report:
Access the report (find the SAP command transaction (T) code)
Enter selection criteria
Execute the report
The Rushmore Group, LLC

44. SAP Standard Reports Accounts Payable Reports
Version 1.0
January 2007
SAP Standard Reports
Accounts Payable Reports
Accounts Receivable Reports
Asset Accounting Reports
General Ledger Reports
Cost Centers:
Actual/Plan/Variance Report
Profitability Analysis:
Plan/Actual Comparison Report
Balance Sheet
Profit and Loss Statements
The Rushmore Group, LLC

45. Accounts Payable Reports
Version 1.0
Accounts Payable Reports
January 2007
It revolves around the reporting of invoices due for payment.
The information is important from a cash flow point of view, as each vendor invoice contains payment terms that determine when the invoice is due for payment.
Vendor line item report shows all the vendor items.
The Rushmore Group, LLC

46. Accounts Receivable Reports
Version 1.0
Accounts Receivable Reports
January 2007
It revolves around the reporting of unpaid (customer) items. This is more of an internal requirement than an external requirement. The information is important from a cash flow point of view.
Customer line item report shows all the customer’s items.
Customer balance statistics report monitors customer’s payments, especially pass-due items.
The Rushmore Group, LLC

47. Asset Accounting Reports
Version 1.0
Asset Accounting Reports
January 2007
Asset Explorer is the primary tool used to run asset accounting reports.
It provides analysis for a particular asset.
In addition, users can use its Asset History Sheet, which is very detailed asset register.
The Rushmore Group, LLC

48. General Ledger Reports
Version 1.0
General Ledger Reports
January 2007
The most important reports of general ledger are:
balance sheet
income statement, and
cash flow.
They can be generated monthly, quarterly and annually
The Rushmore Group, LLC

49. Balance Sheet (Assets)
Version 1.0
Balance Sheet (Assets)
January 2007
The Rushmore Group, LLC

50. Balance Sheet (Liabilities & Equity)
Version 1.0
Balance Sheet (Liabilities & Equity)
January 2007
The Rushmore Group, LLC

51. Version 1.0
Income Statements
January 2007
The Rushmore Group, LLC

52. Lab 5 Exercises: (Due date 3/8/2017)
Run Balance Sheet / Profit and Loss Statements
Create customer inquiry with a probability
Create customer quotation
4. Create Sales Order referencing a quotation
5. Check stock status
6. Display sales order
7. Start delivery note process
8. Picking materials on delivery note
9. Post goods issue
10. Create billing for customer
11. Post receipt of customer payment
12. Review Document Flow
13. Run balance sheet/profit and loss statements
14. Assign general ledger accounts to financial statement version
15. Run Balance Sheet / Profit and Loss Statements with your own financial statement version