SAP Financial Accounting

What is Finance?

• The management of large amounts of money, especially by governments or large companies.

• The science of the management of money and other assets.

• The management of money, banking, investments, and credit.

• The supplying of funds or capital.

A/F

Customer HR

SCM M/S

Payments

Legal requirements and job information, payroll and benefit expense data

Invoices and credit memos

Sales data and manufacturing cost analysis

Production plans, materials, and inventory data

Sales order data

Cost/profit analysis

Hiring needs and personnel information

What are the I/o ?

• Input for A/F include:• Payments from customers

• Account receivable data

• Account payable data

• Sales data

• Production and inventory data

• Payroll and expense data

• Output for A/F include:• Payments to suppliers

• Financial reports

• Customer credit data

SAP FICO Module

• SAP FI is the important module of all SAP implementations

• SAP FI ( Financial Accounting ) is used for external reporting i.eBalance sheet, Profit and Loss statements

• SAP FICO Module integrates with various other SAP Modules such as MM (Materials Management), SD(Sales and Distribution), PP (Production Planning), PM (Plant Maintenance),and PS (Project Systems).

• SAP FI (Financial Accounting) Module receives postings from various other modules such as Materials Management, Sales and Distribution, Human Resource) through integration.

• All accounting-relevant transactions which are made in Logistics (LO) are posted real-time to Financial Accounting by automatic account determination. This data can also be passed on to Controlling (CO).

General Ledger Accounting

• The general ledger accounting is to provide a complete report for external and internal accounting i.e Account, Journals, Monthly debits and Credit, Balance sheet

• Recording all business transactions.

Example of GL

Accounts Payable & Account Receivables

• The Accounts Payable records and manages all accounting data related to vendors

• The AR and AP acts as a sub ledger to FI-GL for managing the balances of Customers and Vendors. The AR and AP components store all the information and balance details for each customer and vendor.

• Customer Accounts• Master Records

• Define account groups

• Accounting clerk identification code

• Industries

• Customer Accounts

• Vendor Accounts• Master Records

• Define Account Groups

• Define screen layout

• Accounting Clerks

• Vendor Accounts

• Business Transactions• Incoming invoices/Credit Memos

• Outgoing Payments

Accounts Receivable

• The Accounts receivable records and manages all accounting data related to customers.

Asset Accounting

• Asset Accounting is utilized for managing your company’s Assets.

• SAP allow you to categorize assets and to set values for depreciation calculations in each asset class.

Bank Accounting• Bank accounting is used to manage the bank transactions in the

system including cash management

Consolidation

• Consolidation enables the combining of financial statements for entities within an organization.

• These financial statements provide an overview of the financial position of the company as a whole.

Funds Management

• Funds Management manages budgets for revenues and expenses within your company as well as track these in the area of responsibility.

• Monitor future funds movement in light of budget available and prevent budget overruns.

Special Purpose Ledger

• Special purpose ledger is used to define ledgers for reporting purposes.

• Internal Reporting Purposes (Management Reports), External Reporting Purpose ( Tax, Statutory Reporting)

SAP ERP financial business benefits

• Improve financial and managerial reporting:• SAP ERP Financials gives you the flexibility to report performance by business

unit, organization, or cost center.

• Improve corporate performance:• SAP ERP Financials provides the foundation to quickly read, evaluate, and

respond to changing business conditions with accurate, reconciled and timely financial data.

• Achieve faster closes:• With SAP ERP Financials, you can streamline accounting, consolidation,

process scheduling, workflow, and collaboration.

• Improve corporate governance and transparency:• SAP ERP Financials provides broader support of accounting standards, federal

regulations, and improved administration of internal controls.

SAP ERP financial business benefits

• Improve cash flow and liquidity:• SAP ERP Financials automates dispute, credit, and collections management –

and offers electronic invoicing and payment capabilities that supplement traditional accounts receivable and accounts payable functions to accelerate and manage cash flow.

• Optimize global cash management:• With SAP ERP Financials, you can report, analyze, and allocate cash in real

time, and establish in-house banks or payment center.

• Improve process integration between finance and treasury:• With SAP ERP Financials, you can integrate risk and treasury transactions

with core accounting and financial reporting processes.

• Reduce overall finance costs:• SAP ERP Financials helps you operate effective shared-services, collaborate

with customers or suppliers, and streamline operations to reduce costs and resource demands.

Characteristics or Features of Finance