1. University of Southern California Enterprise Wide Information Systems Financial Modules Instructor: Richard W. Vawter

2. University of Southern California Objectives After this week, you should be able to: Define the SAP R/3 organizational elements for Financials. Discuss the financial and management reporting capabilities in the system. Identify financial integration points with the logistics chain. Execute financial and management reports in the SAP R/3 System.

3. University of Southern California Topics Organizational Elements Reporting and Analysis

4. University of Southern California Financial Modules The primary SAP R/3 application modules that support Accounting are: Financial Accounting  Core financial accounting  General Ledger as well as subledger information Controlling  Management accounting for tracking overhead and production costs

5. University of Southern California The Financial Applications Enterprise Controlling Overhead Production Profitability Treasury Mgmt Funds Mgmt Cash MgmtGeneral Ledger Subledgers Capital Investment and Financing IM TRFICO EC

6. University of Southern California Accounting Organizational Units Financial Accounting Controlling Chart of accounts Contains all account numbers Group company Consolidation of company codes Company code Independent balancing unit used for legal reports Business area Used to create internal balance sheets Controlling area Organizational unit for cost accounting Cost center Organizational unit for cost control Profit Center Organizational unit for internal profit analysis FI CO Used enterprise wide Cost accumulator Cost and revenue centers

7. University of Southern California Organizational Elements in FI The SAP R/3 Financial Accounting and Reporting business processes use the following R/3 organizational elements: Charts of Accounts Company Codes Group Company Business Areas ACME US, ACME GERMANY, ACME PERU, ACME JAPAN ACME AMERICAS ACME EUROPE ACME ASIA ACME AMERICAS ACME EUROPE ACME ASIA Company acme xyz 345003460034700 348003490035000 351003520035300 354003550035600 Company acme xyz 345003460034700 348003490035000 351003520035300 354003550035600 WestEast

8. University of Southern California FI Cost Accumulation Categories Organizational Units in Controlling (CO) Chart of Accounts Controlling Area Operating Concern Profit Centers Cost Center Order Project Cost element Activity type Statistical key Figures

9. University of Southern California Summary of Accounting Organizational Elements Controlling area 1 Controlling area 2 Company Code Company Code Company Code Company Code Profit Centers Cost centers OPERATING CONCERN Business area Co’s in area1 must be on same fiscal year Fiscal year of area 2 may be different than area 1 Business areas across company codes Profit or cost centers

10. University of Southern California Topics Organizational Elements Reporting and Analysis

11. University of Southern California Internal and External Accounting Executive Officers Administrative Senior StaffManagement ControllersOperations Staff Executive Officers Administrative Senior StaffManagement ControllersOperations Staff Auditors Insurers Tax Authorities Shareholders Journalists Bankers Legal Authorities Financial Analysts Auditors Insurers Tax Authorities Shareholders Journalists Bankers Legal Authorities Financial Analysts External Internal FICO

12. University of Southern California Reporting: Standards vs. Flexibility

13. University of Southern California Reporting: Views of the Enterprise FICO TR CO

14. Reporting: The Audit Trail Document ReportsBalancesLine ItemsTransactions Original Document University of Southern California

15. General Ledger and its Subledgers University of Southern California

16. Financial Integration in Logistics Some of the relevant financial activities resulting from business events at the different stages in the supply chain include: Inventory Production Sales Procurement Commitment bookkeeping Liquidity Exchange rate hedging Invoice verification Cost management Payments Inventory Valuation strategies Product costing Material usage Work-in- progress Credit checking Discounting Billing Payment clearing Dunning analysis Profitability analysis Marketing budget

17. University of Southern California Controlling Features Monitoring plus control through modern profit / cost controlling methods Monitoring of postings to dimensions / data combinations Balance Sheet A L P & L Revenue Expen. Revenue Ledger Expense Ledger Special Ledgers Region Customer Group Product Process Activity Based Costing FI

18. University of Southern California General Controlling Goals Support of strategic and tactical management leadership Optimizing the individual organizational areas Directing towards the goals Profit orientation Market and customer orientation Orientation to the target group Current / summarized data Decision-relevant data Meaningful, easily understandable display Rounded Controlling model How the system rounds numbers The limits for rounding errors

19. University of Southern California Overview: Transaction-Based Postings Human Resources Human Resources Asset Mgmt. Asset Mgmt. Financial Accounting Financial Accounting Materials Mgmt. Materials Mgmt. Controlling Invoices Material withdrawals Orders Purchase requisitions Material withdrawals Orders Purchase requisitions Repostings Activity allocation Statistical key figures Funds reservation Repostings Activity allocation Statistical key figures Funds reservation

20. University of Southern California In Summary: Organizational elements are definable structures that represent the legal and /or organizational views of your enterprise. The SAP R/3 System offers standard and flexible financial and management reporting capabilities to satisfy external and internal accounting requirements. FI/CO integration with the Logistics modules occurs throughout the value chain with the posting of transactions in the system.