Introduction to Financial Accounting Management EGN 5622 Enterprise Systems Integration Spring, 2014 Introduction to Financial Accounting Management EGN.

Introduction to Financial Accounting Management EGN 5622 Enterprise Systems Integration Spring, 2014 Introduction to Financial Accounting Management EGN 5622 Enterprise Systems Integration Spring, 2014

Introduction to Financial Accounting Management Theories & Concepts Introduction to Financial Accounting Management Theories & Concepts

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC3 Financial Accounting (FI) Financial accounting is designed to collect transactional data that provides the foundation for preparing a standard portfolio of reports

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC4 FI Organizational Objects Represent legal and organizational views of an enterprise Form a framework to support business activities in a manner desired by the management Accurately collect and organize business information Enable and support business planning and decisions

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC5 FI Organizational Objects Chart of Accounts General Ledgers (G/L) ◦Customer Accounts and Accounts Receivable (A/R) ◦Vendor Accounts and Accounts Payable (A/P)

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC6 Chart of Accounts (review) It is a classification scheme consisting of a group of general ledger (G/L) accounts. It provides a framework for the recording of values to ensure an orderly rendering of accounting data. It contains the G/L accounts used by one or more company codes.

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC7 General Ledger (G/L) Accounts General Ledger is a data storage area created with a unique combination of Company Code and Chart of Accounts General Ledger contains a listing of transactions effecting each account in the Chart of Accounts and the respective account balance It is used for preparing financial accounting statements

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC8 General Ledger (G/L) Accounts Each account with a unique account number is designated into a balance sheet account group and profit and loss account group. Balances in balance sheet accounts are carried forward into the same account, and balances in the profit and loss accounts are carried forward into different, specified accounts (for example, retaining earning account).

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC9 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.

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC10 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. The reconciliation account for vendors is accounts payable. Transaction data must be posted to sub- ledger accounts, and then they are automatically posted to the corresponding reconciliation account.

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC11 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).

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC12 Vendor and Customer Accounts Vendor and Customer Account balances are usually maintained in FI through integrated accounts receivable and accounts payable (sub-modules) Financial postings for Vendors and Customers are usually made directly to their respective individual accounts and concurrently to reconciliation accounts in the General Ledger

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC13 Vendor Accounts Accounts Payable Sub-Module ◦Information with respect to Vendors from whom the enterprise purchases goods and services such as purchases and payments made ◦Substantive and important integration between Materials Management (MM) and FI ◦Purchase and goods receipt activities in MM generate FI journal entries

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC14 Vendor Accounts Accounts Payable (General Ledger) 850 250 Vendor 100435 200 Vendor 100234 100 Vendor 100621 300 Vendor 100846

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.15 Accounts Payable Integration Increase to A/P Decrease to GR/IR Goods Receipt Balance Sheet Increase to Inventory Increase to GR/IR Invoice Receipt

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC16 Customer Accounts Accounts Receivable Sub-Module ◦Information with respect to customers who purchase the enterprise’s goods and services such as sales and payments made ◦Substantive and important integration between Sales and Distribution (SD) and FI ◦Billings in SD generate FI journal entries for sales activity

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC17 Customer Accounts Accounts Receivable (General Ledger) 950 300 Customer 142 150 Customer 123 400 Customer 135 100 Customer 189

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.18 Accounts Receivable Integration Revenue Increase to A/R Goods Issue Sales Order Invoice Income Statement Balance Sheet COGS Decrease to Inventory SD Sales and Distribution

January 2007 (v1.0) © 2007 by SAP AG. All rights reserved. SAP University Alliance. The Rushmore Group, LLC19 Accountants and Audit Trails 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

Introduction to Financial Accounts Management SAP Implementation Introduction to Financial Accounts Management SAP Implementation

R/3 SAP Module View Integrated Solution Client / Server Open Systems Financial Accounting Controlling Fixed Assets Mgmt. Project System Workflow Industry Solutions Production Planning Sales & Distribution Materials Mgmt. Plant Management Quality Maintenance Human Resources

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.22 Components of Financial Accounting Financial Accounting (FI) Accounts Receivable Accounts Payable Special Purpose Ledger Fixed Assets Banks General Ledger

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.24 Business Processes Integration  Financial Accounting (FI)  Materials Management (MM)  Sales and Distribution (SD)  Production Planning (PP)

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.25 Integration Procurement Process (Procure-to-Pay) Purchase Requisition Payment to Vendor Notify Vendor Shipment Invoice Receipt Goods Receipt Purchase Order

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.26 Sales Order Process (Order-to-Cash) Integration Sales Order Entry Post Goods Issue Invoice Customer Pick Materials Receipt of Customer Payment Pack Materials Check Availability

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.27 Schedule and Release Shop Floor Documents Finished Goods Receipt Order Settlement Raw Materials Issue Production Proposal (Planning/Other) Completion Confirmation Capacity Planning Production Process (Make-to-Stock) Integration

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.31 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

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.32 Client General Motors GM Corp. Chart of Accts GMCCadillacChevrolet Corporate Fiscal Year Var. GM–Corporate Credit CA Cars Trucks Business Areas Consolidation of Company Codes Optional Organizational Structures

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.33 Business Areas A unit in an enterprise that groups product and market combinations as homogeneously as possible for the purpose of developing unified business policy.

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.35 Master Data (Review) Master data is relatively fixed ◦General Ledger master data ◦Material master data ◦Vendor master data ◦Purchasing information record ◦Customer master data Before making the master data configurations, you must have completely defined the organizational structure

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.36 Master Data Financial Accounting General Ledger Accounts Material Master Vendor Master Customer Master Material Management Vendor Master Material Master Customer / Purchasing Info Records Manufacturing Process Material Master BOM Routing Work center PRT (Production Resource/Tools) Sales & Distribution Customer Master Material Master Pricing Credit Limits Customer Material Info Records Item Proposal

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.37 FI Master Data General Ledger Master Data ◦Chart of Accounts Data ◦Company Code Data ◦Reconciliation Accounts  Accounts Receivable  Accounts Payable  Goods Receipt/Invoice Receipt

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.38 General Ledger – Master Data General Ledger accounts are created at the client level A unique master record is created for each General Ledger account Business transactions are posted to the portfolio of General Ledger accounts made available to a company through the assignment of a specific Chart of Accounts

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.39 General Ledger – Master Data (continued) Contains control information for: ◦Data entry ◦Data processing Specifies what is in: ◦the balance sheet, and ◦the income statement

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.40 General Ledger Organization of the Data Contains one or more Chart-of-Accounts-specific information areas Contains one or more Company-Code-specific information areas In this way, a General Ledger master account can be shared by several combinations of Charts of Accounts and Company Codes

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.41 100101 CPEN X BS Account number Chart of accounts Account group P&L statement acct type Balance sheet account General Ledger Chart of Accounts Data Account number Name of the Chart of Accounts Account group provides information that controls the creation of the master record for a company code

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.42 General Ledger Company Code Data Local currency Foreign currency Tax category Open item management Line item display Sort key

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.43 General Ledger Company Code Data (- continued) Local currency ◦Specify the currency in which the account is to be posted ◦Transaction figures are always updated and displayed in local currency

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.44 General Ledger Company Code Data (- continued) Foreign currency ◦Specify the alternative currency in which the account is to be posted ◦It is possible to select up to two alternative currencies ◦Transaction figures will be updated in both the local and alternative currencies

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.45 General Ledger Company Code Data (- continued) Tax category ◦Specify the type of tax on purchase and sales (input or output taxes) that can be posted to the account ◦If the account is not tax relevant, do not make a specification in this field

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.46 General Ledger Company Code Data (- continued) Open item management ◦Indicates that the account is subjected to an affirmative clearing process involving the matching of debits to credits with the purpose of closing each individual line item, for example, reconciliation accounts ◦You can archive an accounting document ONLY when all of its individual line items have been cleared

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.47 General Ledger Company Code Data (- continued) Line item display ◦Select if it is desirable to view all the debit and credit detail for the account ◦However, when posting items to such accounts and displaying line items, additional storage space and system time are required

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.48 General Ledger Company Code Data (- continued) Line item display should not be used for the following accounts: ◦Reconciliation accounts ◦Accounts that have a summation function and are analyzed by another application such as revenue or stock accounts ◦Output and input tax accounts, since tax information is required only in connection with the document

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.49 General Ledger Company Code Data (- continued) Sort Key ◦Necessary when line item display is selected ◦Determines the data field that will be used to sort the line items  Posting date  Document date  Cost center

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.50 General Ledger Company Code Data (- continued) Reconciliation accounts ◦While posting a sub-ledger, the system also automatically, concurrently posts to the corresponding reconciliation account in the general ledger ◦In this way, the general ledger is automatically updated and remains in balance with the individual account totals

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.51 Subsidiary Ledger Accounts A/R, A/P, GR/IR General Ledger Reconciliation Accounts A/R, A/P, GR/IR General Ledger Company Code Data (- continued) Debit Credit A/P Debit Credit A/R Debit Credit GR/IR $$ General Ledger

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.52 Line Item Display Line Item Display Account number 100999 Bank Account Company code C999 PeriodDebitCredit DC bal. Balance C/f bal. 750,000.00 Period 1 5,250.00 3,540.00 1,710.00 751,710.00 Period 225,000.0015,000.00 10,000.00 761,710.00 Period 1 Doc. no.DT Doc.dateCurrencyAmount 1500000013KZ01/05/04 USD 1,800.00 - 1500000014KZ01/06/04 USD 990.00 - 100000012SA01/08/04 USD 750.00 – 1400000342DZ01/14/04 USD 5,250.00

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.54 Rules (Review) Defines the parameters for Master Data and Transactions Determines functionality for Master Data and Transactions Relatively fixed Changes as policy changes

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.55Rules 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

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.56 Rules Account Groups  BS – Balance Sheet Account Group  PL – Income Statement Account Group  RA – Reconciliation Account Group Field status variant ◦Field status groups Automatic Account Assignments Posting Periods Tolerance Groups for Account Postings Accounts Payable Settlement Document Numbers

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.57 Account Groups Chrt/accts Acct group Description From To CHRT BSBalance Sheet 100000399999 CHRT PLIncome Sheet400000999999 CHRT RAReconciliation 110000310000

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.58 Account Groups Control which fields must be entered when an account is created Determine a valid number interval for each of the groups (types) of General Ledger accounts that have common attributes Must be created before General Ledger Chart of Accounts master records can be created You must assign each account to an appropriate account group

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.59 Field Status Field status controls how the data will be entered for a field when an accounting master record is being used in a transaction Determining whether a field is required, optional, suppressed, or display only Field status controls are also relevant to a specific activity — create, change, or display

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.60 Field Status Variant Fld status group Text ZALLAll Accounts ZBSABalance Sheet Accounts ZEXPExpense Accounts ZGRIMaterial Management (GR/IR) Accounts ZRCNReconciliation Accounts ZREVRevenue Accounts

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.61 Automatically posted to Reconciliation Account Postings to sub-ledgers (such as accounts receivable or accounts payable) are automatically concurrently posted to the corresponding reconciliation account in the General Ledger In this way, the General Ledger is automatically updated and remains in balance with the customer and vendor individual account totals

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.62 Posting Periods Before it is possible to post documents, it is necessary to define posting periods Fiscal years are divided into one or more posting periods Each posting period is delimited by both a start and finish date A common division of a fiscal year involves defining 16 posting periods -- 12 months and 4 quarter ending posting periods

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.63 Tolerances Groups for Account Postings Internal control – amount limits that serve to define the maximum authorization levels for your employees ◦Must be at least one entry for every company code ◦Can be defined for an employee group with employees being assigned to a given group to effect the control ◦Can be undefined at the group level meaning that the control is effective for everyone who is not a member of a group

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.64 Tolerances Groups for Account Postings (continued) Internal control – amount limits that serve to define the maximum authorization levels for your employees with respect to: ◦A single transaction ◦A customer or vendor account line item ◦Discount percentage granted to a line item ◦Payment differences that can be accepted in settlement of an account (e.g., accounts payable)

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2007. All rights reserved.66 Transaction Data 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

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.67 Transaction Overview Document Principles Document Types Posting Keys Monthly Rent Cycle Invoice Receipt Invoice Entry Account Payable Process Account Receivable Process

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.68 Document Principles 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

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.69 Document Principles – (continued) An accounting document captures the entire transaction in a manner that facilitates recall for reporting purposes It remains as a complete unit in the system until archived Once created, a document can not be deleted from the database

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.70 Document Principles – (continued) The SAP R/3 document principle provides a solid framework for a strong internal control system Audit trails allow an accountant to begin with an account balance on a financial statement and trace through the accounting records to the transactions that support the account balance or to trace individual transactions to the effected account balance(s) on a financial statement

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.71 Document Principles – (continued) Each posted accounting document has a header which data apply to the entire document, such as document number, document type, company code, currency, and reference number.

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.72 Document Principles – (continued) The detail section of each posted accounting document has at least two lines (e.g., debit and credit) Each line item includes

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.73 Document Types 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

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.74 Document Types – (continued) 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

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.75 Document Numbers 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

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.76 Document Numbers – (continued) Before any documents can be posted to a company or company code, there must be a number range assigned to the document type New transaction document number ranges must be created at the start of each new fiscal year

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.77 The 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 Posting Keys

78 Accounting Document (-continued) Posting Key Examples: Posting KeyDebit/CreditAccount Type 01 (invoice)DebitCustomer 15 (payment)CreditCustomer 40 (debit)DebitG/L account 50 (credit)CreditG/L account 31 (invoice)CreditVendor 25 (payment)DebitVendor 89 (Stock In)DebitMaterial 99 (Stock out)CreditMaterial

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.79 Assets 7075 General Ledger 4050 Material 8999 Customers 0115 Vendors 2531 Common Posting Keys Posting Keys – (continued)

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.83 Accounts Payable Process Purchase Order Goods Receipt Invoice Receipt Debit Credit Payment Program Verification

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.84 Accounts Payable Settlement (continued) Select payment method and bank Select items for payment Calculate the payment amount, taking account of cash discount periods Post the payment document Print payment medium

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.85 Accounts Payable Settlement Process Determines: ◦Open items to be paid ◦When they will be paid ◦Bank from which payment will be made ◦Payment medium ◦Who will get paid Payment process creates a financial accounting document to record the transaction

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.86 Goods Receipt / Invoice Receipt Reconciliation Account Purchase requisition Purchase order Materials Management (MM) and Financial Accounting (FI) via automatic account assignment Goods receipt No impact on Financial Accounting (FI) Dr Cr Inventory $100 Dr Cr GR / IR $100

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.87 Goods Receipt / Invoice Receipt Reconciliation Account Amount owed is assigned and transferred to vendor account payable Invoice receipt Dr Cr Vendor (sub-ledger) $100 Dr Cr GR / IR $100 Dr Cr A/P $100

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.88 Vendor Payment Amount owed is paid to vendor and account payable is reduced Bank Dr Cr A/P $100 Dr Cr Bank $100 Vendor (sub-ledger) Dr Cr $100

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.89 (FI – MM) Integration Points Invoice Receipt Payment Program Goods Receipt (Vendor) Dr Cr GR / IR $100 Bank Dr Cr Inventory $100 Dr Cr $100 AP Dr Cr $100

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.90 Accounts Receivable Process Sales Order From customer Issue Goods Issue Invoice Debit Credit Post Payment

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

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

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

January 2008 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved.94 (FI – SD) Integration Points Billing Payment Program Goods Issue (Customer) Dr Cr COGS $1,000 Bank Dr Cr Inventory (F/G) $1,000 $1,250 Dr Cr $1,250 AR Dr Cr $1,250 Dr Cr Revenue

Exercises: (Due date: 2/3/2014) FI 1 Display chart account FI 2 Display G/L account list FI 3 Create new bank account in general ledger FI 4 Create reconciliation account in G/L FI 5 Create expense account in G/L FI 6 & FI 6A Create cost elements for expense account FI 7 Post transfer of funds to bank account FI 8 Post transfer of funds to new bank account FI 9 Create vendor master record for landlord FI 10 Create invoice receipt for rent expense FI 11 Display and review G/L account balances and individual line items FI 12 Display and review A/P balances and individual line items FI 13 Post payment to landlord FI 14 Display and review G/L account balances and individual line items

Exercises: (- continued) FI 15 Display and review A/P balances and individual line items FI 16 Post purchase of operating supplies FI 17 Run balance sheet/profit and loss statements FI 18 Create purchase order FI 19 Create goods receipt FI 20 Post invoice receipt from vendor FI 21 Display vendors invoice document FI 22 Post payment to vendor FI 23 Run balance sheet/profit and loss statements

Introduction to Financial Accounting Management EGN 5622 Enterprise Systems Integration Spring, 2014 Introduction to Financial Accounting Management EGN.

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Introduction to Financial Accounting Management EGN 5622 Enterprise Systems Integration Spring, 2014 Introduction to Financial Accounting Management EGN.

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