1. Introduction to Financial Accounting Management EGS 5622 Enterprise Systems Integration Spring, 2017

2. Introduction to Financial Accounting Management Theories & Concepts

3. Financial Accounting (FI)
Version 1.0
January 2007
Financial Accounting (FI)
Financial accounting
Designed to collect transactional data for preparing a standard portfolio of reports
The Rushmore Group, LLC

4. FI Organizational Objects
Version 1.0
FI Organizational Objects
January 2007
Represent legal and organizational views of an enterprise
Form a framework to support business activities desired by the management
Accurately collect and organize business information
Enable and support business planning and decisions
SEC – US Securities and Exchange Commission
The Rushmore Group, LLC

5. FI Organizational Objects
Version 1.0
FI Organizational Objects
January 2007
Chart of Accounts
It is a classification scheme consisting of a group of general ledger (G/L) accounts.
It contains G/L accounts used by one or more company codes.
General Ledgers (G/L)
A unique combination of Company Code and Chart of Accounts used for preparing financial accounting statements
Each G/L account with a unique account number is designated into a balance sheet account group and profit and loss account group.
The Rushmore Group, LLC

6. Subsidiary Ledgers (Sub-ledgers) and Reconciliation Accounts
Version 1.0
January 2007
Subsidiary Ledgers (Sub-ledgers) and Reconciliation Accounts
Sub-Ledgers:
Some financial data are not directly maintained in the general ledger. For example, customers accounts, which track the amounts customers owe and payments they paid, are maintained separately for each customer. Similarly, data about each vendor are maintained in separate accounts. Such accounts are called sub-ledgers, and don’t show up in the general ledger.
The Rushmore Group, LLC

7. Subsidiary Ledgers (Sub-ledgers) and Reconciliation Accounts
Version 1.0
January 2007
Subsidiary Ledgers (Sub-ledgers) and Reconciliation Accounts
Reconciliation accounts:
Part of general ledger accounts that consolidate data from a group of related sub-ledger accounts, such as customers and vendors.
The reconciliation account for customers is accounts receivable (A/R).
The reconciliation account for vendors is accounts payable (A/P).
Transaction data must be posted to sub- ledger accounts, and then they are automatically posted to the corresponding reconciliation account.
The Rushmore Group, LLC

8. Subsidiary Ledgers (Sub-ledgers) and Reconciliation Accounts
Version 1.0
January 2007
Subsidiary Ledgers (Sub-ledgers) and Reconciliation Accounts
The balance in the reconciliation account (for example accounts receivable and accounts payable) is the sum of the postings in the related sub-ledger accounts (for example, customers and vendors, respectively).
The Rushmore Group, LLC

9. Vendor Accounts and A/P
Version 1.0
Vendor Accounts and A/P
January 2007
Accounts Payable (A/P)
(General Ledger)
850
250
Vendor
200
Vendor
100
Vendor
300
Vendor
The Rushmore Group, LLC

10. Customer Accounts and A/R
Version 1.0
Customer Accounts and A/R
January 2007
Accounts Receivable (A/R)
(General Ledger)
950
300
Customer 142
150
Customer 123
400
Customer 135
100
Customer 189
The Rushmore Group, LLC

11. Accountants and Audit Trails
Version 1.0
Accountants and Audit Trails
January 2007
Audit trails allow an auditor to begin with an account balance on a financial statement and trace through the accounting records to the transactions that support the account balance
Audit trails enable an auditor to trace individual transactions to the effected account balance(s) on a financial statement
The Rushmore Group, LLC

12. Introduction to Financial Accounts Management SAP Implementation

13. 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

14. Components of Financial Accounting
ECC 6.0
January 2008
Components of Financial Accounting
Financial Accounting
(FI)
Accounts
Receivable
Payable
Special
Purpose
Ledger
Fixed
Assets
Banks
General
The Financial Accounting (FI) application component fulfills all the international requirements that must be met by the financial accounting department of an organization. It provides the following features:
Management and representation of all accounting data
All business transactions are recorded according to the document principle, which provides an unbroken audit trail from the financial statements to the individual documents.
Open and integrated data flow
Data flow between Financial Accounting and the other components of the SAP System is ensured by automatic updates.
Data is available in real time within Financial Accounting. Postings made in the subledgers always generate a corresponding posting in the general ledger.
Preparation of operational information to assist strategic decision-making within the organization
General Ledger Accounting
Purpose
The central task of G/L accounting is to provide a comprehensive picture for external accounting and accounts. Recording all business transactions (primary postings as well as settlements from internal accounting) in a software system that is fully integrated with all the other operational areas of a company ensures that the accounting data is always complete and accurate.
Accounts Receivable
Account Receivables application component records and administers accounting data of all customers. It is also an integral part of sales management.
All postings in Accounts Receivable are also recorded directly in the General Ledger. Different G/L accounts are updated depending on the transaction involved (for example, receivables, down payments, and bills of exchange). The system contains a range of tools that you can use to monitor open items, such as account analyses, alarm reports, due date lists, and a flexible dunning program. The correspondence linked to these tools can be individually formulated to suit your requirements. This is also the case for payment notices, balance confirmations, account statements, and interest calculations. Incoming payments can be assigned to due receivables using user-friendly screen functions or by electronic means such as EDI and data telecommunication
Accounts Payable
The Accounts Payable application component records and administers accounting data for all vendors. It is also an integral part of the purchasing system: Deliveries and invoices are managed according to vendors. The system automatically makes postings in response to the operative transactions. In the same way, the system supplies the Cash Management application component with figures from invoices in order to optimize liquidity planning.
Payables are paid with the payment program. The payment program supports all standard payment methods (such as checks and transfers) in printed form as well as in electronic form (data medium exchange on disk and electronic data interchange). This program also covers country-specific payment methods.
Bank Accounting
This component is used to handle accounting transactions that you process with your bank.
Features
It includes the management of bank master data, cash balance management (check and bill of exchange management), and the creation and processing of incoming and outgoing payments. It is possible to freely define all country-specific characteristics, such as the specifications for manual and electronic payment procedures, payment forms, or data media.
Asset Accounting
The Asset Accounting component consists of the following parts:
Traditional asset accounting
Processing leased assets
Preparation for consolidation
Information System
Traditional asset accounting encompasses the entire lifetime of the asset from purchase order or the initial acquisition (possibly managed as an asset under construction) through its retirement. The system calculates, to a large extent automatically, the values for depreciation, interest, insurance and other purposes between these two points in time, and places this information at your disposal in varied form using the Information System. There is a report for depreciation forecasting and simulation of the development of asset values.
Special Purpose Ledgers 
In the application Special Purpose Ledger, you can define ledgers for reporting purposes. You can keep these user-defined ledgers as general ledgers or subsidiary ledgers with various account assignment objects. Account assignment objects can either be SAP dimensions from various applications (such as account, cost center, business area, profit center) or customer-defined dimensions (such as region).
The special purpose ledgers enable you to report at various levels using the values from the various application components. The functions available in the special purpose ledgers enable you to collect and combine information, create and modify totals, and distribute actual and plan values. The values are transferred to the special purpose ledgers from other SAP applications and external systems.
January 2008
© SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.
© SAP AG and The Rushmore Group, LLC 2008

15. Business Processes Integration
ECC 6.0
January 2008
Business Processes Integration FI MM PP SD
Transactions
Master Data MM PP SD
Org Data
Rules MM PP SD FI FI FI MM
In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These ‘hold up’ the transactions. Transactions cannot be run unless these are setup.
The legs are typically configured during the implementation process.
During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution. PP SD
© SAP AG and The Rushmore Group, LLC 2008

16. Business Processes Integration
ECC 6.0
January 2008
Business Processes Integration
Financial Accounting (FI)
Materials Management (MM)
Sales and Distribution (SD)
Production Planning (PP)
BPI 1is designed as a class for showing how a strictly distribution company operates
BPI 2 is designed to add the complexity of manufacturing to the distribution. At the end of BPI 2 students will have configured and successfully tested all aspects of a simple manufacturing company.
January 2008
© SAP AG - University Alliances and The Rushmore Group, LLC All rights reserved.
© SAP AG and The Rushmore Group, LLC 2008

17. Procurement Process (Procure-to-Pay)
ECC 6.0
January 2008
Integration
Procurement Process (Procure-to-Pay)
Purchase
Requisition
Purchase
Order
Notify
Vendor
Payment
to Vendor
This is a standard view of the procure to pay process and the most common. It may vary significantly based upon the company procedures, the products/services purchases and other factors.
SAP allow businesses to tailor it to their needs.
Starts with a requisition or need that needs to be filled. This can come from Planning (MRP), manually or other
The purchase order is the document to fill the need: usually includes the vendor, cost/price, quantity, terms and other pertinent information. [ part one of the 3-way match]
Notifying the vendor
The goods are shipped and brought to the organization
The goods are received (typically at the dock) and then put away [ part two of the three way match]
An invoice is received from the vendor [third part of the 3-way match]
After the tolerances/verification of the 3-way match are met a payment is made according to the terms agreed to on the purchase order.
Vendor
Shipment
Invoice
Receipt
Goods
Receipt
© SAP AG and The Rushmore Group, LLC 2008

18. Sales Order Process (Order-to-Cash)
ECC 6.0
January 2008
Integration
Sales Order Process (Order-to-Cash)
Check
Availability
Sales Order
Entry
Pick
Materials
Receipt of
Customer Payment
Pack
Materials
Not unlike the procure to pay process, this is completely configurable. You decide how you want the order to cash process to work and configure the system appropriately
May start with Sales Order
Check inventory
If you do not have inventory –procurement process or production process
Pick materials: from inventory
Pack material: (optional) pack in box appropriate box or other
Post Goods Issue (Title transfer)
Invoice Customer –Create Accounts Receivable
Collect Money
Invoice
Customer
Post Goods
Issue
© SAP AG and The Rushmore Group, LLC 2008

19. Production Process (Make-to-Stock)
ECC 6.0
January 2008
Integration
Production Process (Make-to-Stock)
Capacity
Planning
Schedule
and Release
Production
Proposal
(Planning/Other)
Shop Floor
Documents
Order Settlement
Raw Materials
Issue
Finished Goods
Receipt
Completion
Confirmation
© SAP AG and The Rushmore Group, LLC 2008

20. Financial Accounting Module
ECC 6.0
January 2008
Financial Accounting Module FI
Transactions
Master Data
Org Data
Rules FI FI FI
In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These ‘hold up’ the transactions. Transactions cannot be run unless these are setup.
The legs are typically configured during the implementation process.
During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution.
© SAP AG and The Rushmore Group, LLC 2008

21. Financial Accounting Module
ECC 6.0
Financial Accounting Module
January 2008
Organization Data
Master data
Rules
Transaction Data
Master data does not change very often
Org data – should not change
Transaction data (application data) – changes every transaction
If you setup organizational data and wish to change it, it very well may be more work than the initial setup.
© SAP AG and The Rushmore Group, LLC 2008

22. Financial Accounting Module - Organization Data
ECC 6.0
January 2008
Financial Accounting Module Organization Data FI
Org Data FI
In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These ‘hold up’ the transactions. Transactions cannot be run unless these are setup.
The legs are typically configured during the implementation process.
During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution.
© SAP AG and The Rushmore Group, LLC 2008

23. ECC 6.0
January 2008
Organizational Data
A hierarchy in which the organizational units in an enterprise are arranged according to functions and tasks
They are static data and rarely changed
Once the organizational structure is decided, it is not easy to change it
The definition of organization units is a fundamental step; it is a critical factor in how the company will be structured
Master data does not change very often
Org data – should not change
Transaction data (application data) – changes every transaction
If you setup organizational data and wish to change it, it very well may be more work than the initial setup.
© SAP AG and The Rushmore Group, LLC 2008

24. Optional Organizational Structures
ECC 6.0
January 2008
Optional Organizational Structures
GM Corp.
Chart of Accts
Client
GM–Corporate
Credit Control Area
General
Motors
Corporate
Fiscal Year Var.
Consolidation of Company Codes
GMC
Cadillac
Chevrolet
Business Areas
You have to assign a chart of accounts to each company code. This chart of accounts is the operating chart of accounts and is used for the daily postings in this company code.
You do not have to create a company
You do have to create a company code
The only reason to create a company is when you have to create a consolidated financial statement
Cars
Trucks
© SAP AG and The Rushmore Group, LLC 2008

25. Business Areas (review)
ECC 6.0
Business Areas (review)
January 2008
Business Areas
An enterprise organizational unit within financial accounting. It corresponds to a defined business segment or area of responsibility, to which you can assign value movements recorded in Financial Accounting.
Business areas may also group product and market combinations as homogeneously as possible for the purpose of developing unified business policy.
An organizational unit that represents the area where customer credit is awarded and monitored.
This organizational unit can either be a single or several company codes, if credit control is performed across several company codes. One credit control area contains credit control information for each customer.
Credit and risk management takes place in the credit control area. According to your corporate requirements, you can implement credit management that is centralized, decentralized, or somewhere in between.
If GM control credit at company code level
dealership
Sells Chevrolet - $10 million credit
Things go well
Applies for Buick - $10 million credit
Add Pontiac, etc. Soon $50 million with GM
TOO much
If GM managed at company level instead of company code level. It would have stopped at $10 million
© SAP AG and The Rushmore Group, LLC 2008

26. Financial Accounting Module - Master Data
ECC 6.0
January 2008
Financial Accounting Module - Master Data FI
Master Data FI
In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These ‘hold up’ the transactions. Transactions cannot be run unless these are setup.
The legs are typically configured during the implementation process.
During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution.
© SAP AG and The Rushmore Group, LLC 2008

27. Master Data (review) Financial Accounting (FI)
ECC 6.0
January 2008
Master Data (review)
Financial Accounting (FI)
General Ledger Accounts
Material Master
Vendor Master
Customer Master
Material Management (MM)
Vendor Master
Material Master
Customer / Purchasing Info Records
Manufacturing (PP)
BOM
Routing
Work center
PRT (Production Resource/Tools)
Sales & Distribution (SD)
Customer Master
Material Master
Pricing
Credit Limits
Customer Material Info Records
Item Proposal
© SAP AG and The Rushmore Group, LLC 2008

28. FI Master Data ECC 6.0 January 2008
You are not going to create a client or company
© SAP AG and The Rushmore Group, LLC 2008

29. General Ledger – Master Data
ECC 6.0
General Ledger – Master Data
January 2008
A unique master record is created for each General Ledger account
Each G/L is set up according to a chart of accounts. The chart of accounts contains definitions of all G/L accounts in ordered form. The definitions consist of 1) account number, 2) account name, and 3) type of G/L account (profit and loss (P&L) account or a balance sheet account).
You have to assign an operating chart of accounts to each company code. The operating chart of accounts is used for the daily postings in the assigned company code. Multiple company codes can use the same operating chart of accounts.
In addition to the operating chart of accounts (leading ledger), you can use two additional charts of accounts (non-leading ledger).
System can generate numbers or you can generate the numbers.
With the exception of materials, we will let the system create the numbers.
Company code has to be on every transactions – So ledger accounts can be the same.
Company codes are unique
General Ledger Accounting
The central task of G/L accounting is to provide a comprehensive picture for external accounting and accounts. Recording all business transactions (primary postings as well as settlements from internal accounting) in a software system that is fully integrated with all the other operational areas of a company ensures that the accounting data is always complete and accurate.
© SAP AG and The Rushmore Group, LLC 2008

30. Financial Accounting Module
ECC 6.0
January 2008
Financial Accounting Module FI
Rules FI
In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These ‘hold up’ the transactions. Transactions cannot be run unless these are setup.
The legs are typically configured during the implementation process.
During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution.
© SAP AG and The Rushmore Group, LLC 2008

31. Rules (Review) Defines the parameters for Master Data and Transactions
ECC 6.0
Rules (Review)
January 2008
Defines the parameters for Master Data and Transactions
Determines functionality for Master Data and Transactions
Relatively fixed
Changes as policy changes
Master data does not change very often
Org data – should not change
Transaction data (application data) – changes every transaction
Rules are relatively fixed.
© SAP AG and The Rushmore Group, LLC 2008

32. Rules Financial Accounting Account Groups Field Status Variant
ECC 6.0
Rules
January 2008
Financial Accounting
Account Groups
Field Status Variant
Fiscal / Posting Periods
Tolerance Groups
Document Types
Number Ranges
Automatic Account Assignment
Valuation Area Grouping
Parameter IDs
Material Management
Fiscal Periods
Account Groups
Material Types
Plant Parameters
Purc./Rec./Inv. Tolerances
Automatic Account Assignment
Reservations
Material Group
Loading Group
Sales & Distribution
Account Groups
Pricing Procedure Determination
Shipping Point Determination
Revenue Account Determination
Define Availability Check
Define Credit Check
Document Types
© SAP AG and The Rushmore Group, LLC 2008

33. An Example for Account Groups in GBI
ECC 6.0
January 2008
An Example for Account Groups in GBI
Chrt/Accts
Acct Group
Name
From acct
To account
GL## BS
## Balance Sheet Accounts
100000
399999 FA
## Fixed Assets
220000
300000 LA
## Liquid Assets
101999 MA
## Material Accounts
200000
200600 PL
## Profit & Loss Accounts
400000
999999 RA
## Reconciliation Accounts
110000
310000
Reconciliation fit inside the balance sheet accounts
Sub-sets
Have to create account groups before they create the master records
You must assign each account to an account group. The account group ensures that only the relevant screens and fields are displayed and ready for input for each of the customer’s different partner functions. For example, the address, communication, and bank data fields are omitted for the account group for one-time accounts.
© SAP AG and The Rushmore Group, LLC 2008

34. ECC 6.0
Account Groups
January 2008
1) Control which fields must be entered when an account is created
2) Determine a valid number interval for each of the groups (types) of General Ledger accounts
3) Must be created before General Ledger Accounts master records can be created
4) You must assign each account to an appropriate account group
How do they control the credit control area, etc.
Account groups
BS accounts
PL accounts
Determines which fields needs to be filled in
Have to create account groups before they create the master records
You must assign each account to an account group. The account group ensures that only the relevant screens and fields are displayed and ready for input for each of the customer’s different partner functions. For example, the address, communication, and bank data fields are omitted for the account group for one-time accounts.
© SAP AG and The Rushmore Group, LLC 2008

35. Financial Accounting Module
ECC 6.0
January 2008
Financial Accounting Module FI
Transactions
In the Business Process Integration class we use the stool as a metaphor for the SAP structure. There are four basic components needed to run execute SAP. Three of these are the legs of the stool: org data, master data, and rules. These ‘hold up’ the transactions. Transactions cannot be run unless these are setup.
The legs are typically configured during the implementation process.
During BPI 1 we will setup the stool for Finance, Materials management and Sales and Distribution.
© SAP AG and The Rushmore Group, LLC 2008

36. ECC 6.0
Transaction Data
January 2008
Includes transactions that describe business activities
Unlike master data, aggregate transactional data is dynamic - it constantly changes, usually many times per day – each transaction is unique
Transactions use organizational structure, master data, and rules
© SAP AG and The Rushmore Group, LLC 2008

37. Transaction Overview Document Principles Document Types Posting Keys
ECC 6.0
January 2008
Transaction Overview
Document Principles
Document Types
Posting Keys
Account Payable Process
Account Receivable Process
© SAP AG and The Rushmore Group, LLC 2008

38. ECC 6.0
Document Principles
January 2008
Each completed accounting transaction writes data to the database and creates a unique electronic document
A financial accounting document records the impact (either debit or credit, and in which account) of a transaction step on financial accounting
Each document contains information such as:
Responsible person
Date and time of the transaction
Commercial content including company codes
Definition
The result of a posting in Financial Accounting. There are two types of documents: Original documents and processing documents.
Examples of original documents:
Receipts
Invoices
Checks
Bank statements
Examples of processing documents:
Accounting documents
Sample documents
Recurring entry documents
The accounting document represents the original document in the system. The other processing documents can be used to simplify document entry. The document remains as a connecting unit in the system until it is archived.
Use
You can only check whether postings are correct in the compact journal and general ledger by means of documents. Every posting must therefore have a document.
Documents are the link between the business transaction and the posting in accounting.
Only complete documents can be posted. A document is complete when its debit and credit items balance to zero. You must enter the minimum account assignments designated by the system: For example, document date, posting date, document type, posting key, account number, and amount. Data must also be entered in all other fields that were defined as required fields when making system settings.
© SAP AG and The Rushmore Group, LLC 2008

39. Document Types A way to categorize different transactions
ECC 6.0
Document Types
January 2008
A way to categorize different transactions
Many different document types are supplied in the system
A document type is two-digit code that identifies the specific business process
Document types are associated with number ranges
All documents of the same document type are stored in the system by document number
Determine the type of account that can be posted to
A key that is used to classify accounting documents and distinguish between business transactions to be posted. The document type is entered in the document header and applies to the whole document.
Use
The document type has the following functions:
Differentiating between business transactions. The document type tells you instantly what sort of business transaction is in question. This is useful, for example, when displaying line items for an account.
Controlling the posting to account types (vendor, customer, or G/L accounts). The document type determines which account types that particular document can be posted to.
Assigning document numbers. A number range is assigned to every document type. The numbers for the documents you create are taken from this number range. The original documents from one number range should be stored together. In this way, the document type controls document storage.
If you don’t like the document type out there… create a new one
Never change the defaults. You cannot go back
© SAP AG and The Rushmore Group, LLC 2008

40. Document Types – (continued)
ECC 6.0
Document Types – (continued)
January 2008
Common used document types:
SA – General ledger account documents
DR – Customer invoices
DG – Customer credit memos
DZ – Customer payments
KR – Vendor invoices
KG – Vendor credit memos
KZ – Vendor payments
KN – Vendor net invoices and credit memos
WA – Goods issue
WE – Goods receipt
Document types have already been defined in the standard system. The most important document types are these.
© SAP AG and The Rushmore Group, LLC 2008

41. ECC 6.0
Document Numbers
January 2008
All posted transactions must have a unique number assigned to it
Usually these numbers are system generated
The numbers serve to specifically identify the business content of a transaction so that it may be recalled at a later time
The actual system stored document number includes information respecting the year, date, and company codes
In the SAP System, every document is assigned a number that identifies it uniquely within a fiscal year and company code.
You can define number ranges as follows:
You can define number ranges for each company code. Thus, each company code can use the same number interval.
You can define number range intervals as year-specific.
You define number ranges in the system separately for master records and documents. You can therefore use the same number range keys for both master records and documents.
© SAP AG and The Rushmore Group, LLC 2008

42. ECC 6.0
Posting Keys
January 2008
Posting key (PK) has a control function that pertains to the document line items.
It determines the following:
Account type for posting the line item
Debit or credit posting of line items
Field status for additional information
Account Types:
D – Customer
K – Vendor
A – Assets
M – Material
S – G/L Accounts
Keeps track of line items and where these line items are posted to.
The document type specifies which account types you can post to. The posting key specifies which account types you can post to. A posting key can only be entered for an account type which is permitted for that document type.
© SAP AG and The Rushmore Group, LLC 2008

43. Accounting Document (-continued)
Version 1.0
January 2007
Accounting Document (-continued)
Posting Key Examples:
Posting Key Debit/Credit Account Type
01 (invoice) Debit Customer
15 (payment) Credit Customer
40 (debit) Debit G/L account
50 (credit) Credit G/L account
31 (invoice) Credit Vendor
25 (payment) Debit Vendor
89 (Stock In) Debit Material
99 (Stock out) Credit Material
The Rushmore Group, LLC

44. Posting Keys – (continued)
ECC 6.0
January 2008
Posting Keys – (continued)
General Ledger 40 50
Vendors 25 31
Common
Posting
Keys
Assets 70 75
Material 89 99
Customers 01 15
General Ledger
40 Debit entry Debit G/L account
Credit entry Credit G/L account
Assets
70 Debit asset Debit Asset
75 Credit asset Credit Asset
Material
89 Stock inwrd movement Debit Material
Stock outwd movement Credit Material
Vendors
02 Reverse credit memo Debit Customer
Bank charges Debit Customer
Customers
00 Act assignment model
01 Invoice Debit Customer
© SAP AG and The Rushmore Group, LLC 2008

45. Accounts Payable Process
ECC 6.0
Accounts Payable Process
January 2008
Purchase
Order
Debit Credit
Payment
Program
Invoice
Receipt
Verification
This is the 3-way match process. The purchase quantity and price is matched against the invoice price and goods receipt quantity. If all 3 match then it is eligible for payment.
Goods
Receipt
© SAP AG and The Rushmore Group, LLC 2008

46. Goods Receipt / Invoice Receipt Reconciliation Account
ECC 6.0
January 2008
Goods Receipt / Invoice Receipt Reconciliation Account
No impact on
Financial Accounting (FI)
Purchase requisition
Purchase order
Materials Management (MM) and Financial Accounting (FI)
via automatic account assignment
Goods receipt
Requisition – Nothing really happens unless we get the goods or pay for them
The system does the transactions for you using the automatic account assignment
When we receive these, it can match the receipt against the PO
Debit Inventory (we now have additional inventory value)
Credit GR/IR (we are going to owe/pay for that additional inventory)
Dr Cr
Inventory
$100
Dr Cr
GR / IR
$100
© SAP AG and The Rushmore Group, LLC 2008

47. Goods Receipt / Invoice Receipt Reconciliation Account
ECC 6.0
January 2008
Goods Receipt / Invoice Receipt Reconciliation Account
Amount owed is
assigned and transferred to
vendor account payable
Invoice receipt
Dr Cr
GR / IR
$100
Dr Cr
Vendor (sub-ledger)
$100
Once we get the receipt –
Debit GR/IR – now a wash
Vendor AP Credit – we owe
Some companies book it as a liability right away (previous slides), but it really isn’t until you receive the goods
Unique to SAP
Dr Cr
A/P
$100
© SAP AG and The Rushmore Group, LLC 2008

48. Vendor Payment Amount owed is paid to
ECC 6.0
January 2008
Vendor Payment
Amount owed is paid to
vendor and account payable is reduced
Bank
Bank
Vendor (sub-ledger)
Dr Cr
Dr Cr
$100
$100
A/P
Once we get the receipt –
Debit GR/IR – now a wash
Vendor AP Credit – we owe (it is debited: now a wash)
Some companies book it as a liability right away (previous slides), but it really isn’t until you receive the goods
Unique to SAP
Credit bank account (paid, now we have less cash)
Dr Cr
$100
© SAP AG and The Rushmore Group, LLC 2008

49. (FI – MM) Integration Points
ECC 6.0
January 2008
(FI – MM) Integration Points
Goods Receipt
Invoice Receipt
Payment Program
(Vendor)
Inventory
GR / IR
Bank
Dr Cr
Dr Cr
Dr Cr
Dr Cr
$100
$100
$100
$100
$100
$100
Goods Receipt
Debit Inventory
Credit GR/IR
Invoice Receipt
Debit GR/IR
Credit AP
Payment Program (A/P)
Debit: AP
Credit Bank
A/P
Dr Cr
$100
$100
© SAP AG and The Rushmore Group, LLC 2008

50. Accounts Receivable Process
ECC 6.0
Accounts Receivable Process
January 2008
Debit Credit
Post
Payment
Issue
Goods
Sales
Order
From
customer
Issue Invoice
This is the 3-way match process. The purchase quantity and price is matched against the invoice price and goods receipt quantity. If all 3 match then it is eligible for payment.
© SAP AG and The Rushmore Group, LLC 2008

51. Goods Issuing Reconciliation Account
No impact on
Financial Accounting (FI)
Sales quotation
Sales order
Materials Management (MM) and Financial Accounting (FI)
Delivery/Goods Issuing
Dr Cr
COGS
$1,000
COGS: Cost of goods sold
Dr Cr
Inventory (Trading, F/G)
$1,000

52. Billing Reconciliation Account
Billing amount is
assigned and transferred to
customer account receivable
Billing
Dr Cr
Customer (sub-ledger)
$1,250
Dr Cr
Sales Revenues
$1,250
Dr Cr
Account Receivable (AR)
$1,250

53. Customer and account receivable is reduced
Customer Payment
Amount is paid by
Customer and account receivable is reduced
Bank
Customer (sub-ledger)
Bank
Dr Cr
Dr Cr
$1,250
$1,250
Account Receivable (A/R)
Dr Cr
$1,250

54. (FI – SD) Integration Points
ECC 6.0
January 2008
(FI – SD) Integration Points
Goods Issue
Billing
Payment Program
(Customer)
Inventory (F/G)
COGS
Bank
Dr Cr
Dr Cr
Dr Cr
Dr Cr
$1,000
$1,000
$1,250
$1,250
$1,250
Revenue
A/R
Dr Cr
$1,250
Dr Cr
$1,250
$1,250
© SAP AG and The Rushmore Group, LLC 2008

55. Exercises: (Due date: 2/8/2017)
1. Display chart accounts
2. Run financial statements
3. Post transfer of funds to bank account
4. Post transfer of funds to new bank account
5. Create vendor master record for landload
6. Create invoice receipt for rent expense
7. Display & review GL accounts and individual line items
8. Display & review accounts payable balances and individual line items
9. Post payment to landlord
10. Display & review accounts payable balances and individual line items
11. Create cost element for expense account
12. Post purchase of operating supplies
13. Run financial statements
14. Create purchase order
15. Create goods receipt
16. Post invoice receipt from vendor
17. Post payment to vendor
18. Run balance sheet/profit and loss statements