Define Segment in SAP FICO

Define Segment:

Division of a company for which you can create financial statements for external reporting.

You can enter a segment in the master record of a profit center. The characteristic Segment is only released in combination with the characteristic Profit Center. If no segment is specified manually during posting (only possible for transactions in Financial Accounting), the segment is determined from the master record of the profit center. This profit center can also be assigned manually or derived. If you want to apply different rules to derive the segment during posting, you can define your own rules for this.

IAS requires for segment reporting primary and secondary segmentation, which have different reporting depth. A distinction is made between the following types of segment:

 Business segment

A business segment is a distinguishable subactivity of a company that relates to the manufacture of a product or the provision of a service and that has risks and revenues that differ from those in other business segments.

Geographical segment

A geographical segment is a distinguishable subactivity of a company that relates to the manufacture of a product or the provision of a service within a specific field of business. The risks and revenues of a geographical segment differ from the subactivities in other fields of business.

You can choose which segment type you want to have as the primary or the secondary segmentation. You can use the Segment dimension for the primary segmentation. You can represent the secondary segmentation in your system. You can do this by including a user-defined field Region in your general ledger accounting

sap fico online training by certified and real time consultant: Introduction to SAP FICO

sap fico online training by certified and real time consultant: Introduction to SAP FICO: Introduction to SAP Responsibility of a Consultant Responsibility of a Consultant is to “Configure” and “Customize” SAP to “suit t...

Introduction to SAP FICO

Introduction to SAP

Responsibility of a Consultant

Responsibility of a Consultant is to “Configure” and “Customize” SAP to “suit the business process requirements” of client’s Company.

Creation of new objects in SAP system is referred to as “Configuration” whereas making changes to existing objects is called as “Customization”.

ERP stands for Enterprise Resources Planning

Resources can be classified in to 4 categories, they are

1.Men

2.Machines

3.Material and

4.Money

The objective of an Enterprise is to get maximum profit from their investments.

The exercise “Planning” gives an Enterprise, the direction. Planning helps us to take decision by providing inputs required.

As this software helps Enterprises in planning their resource utilization, it is called as Enterprise Resource Planning Software.

Modules in SAP

SAP is an Enterprise level application. It is difficult for a person to understand and work with the entire Organization. So, for the convenience the Product is divided in to smaller parts called “Modules”.

When the product is divided in to Modules, business functions are taken as basis. All business functions like Planning, Procurement (Purchases), Marketing, Accounting, Costing etc. are identified as “Functional Modules”. As each Module represents a Function in business, it is called as a “Functional Module”.

Important Functional modules

FI – Financial Accounting

CO – Controlling

SD – Sales & Distribution

MM – Materials Management

PP – Production Planning

PS – Project Systems

HCM – Human Capital Management (HR) Etc.

Important Technical Modules

ABAP / 4 – Advanced Business Application Programming (4th Generation)

 Basis – Systems & Database Administration

Components in SAP Financial Accounting Module

Part A: SAP Enterprise Structure

Part B: 1. General Ledger

2.Accounts Payable

3.Accounts Receivable

4.Asset Accounting Part C: Reports

Components in SAP Controlling Module

Part A: Controlling Area and its supporting objects

Part B: 1. Cost Element Accounting

2.Cost Center Accounting

3.Order Management

4.Profit Center Accounting

5.Product Costing

6.Profitability Analysis

Integration

1.Integration of FI/CO with MM Module

2.Integration of FI/CO with SD Module

Introduction: Integration means “connecting”. All the Modules in SAP system are already inter- connected with each other. Under this heading, we do not “connect” all these Modules with each other. We facilitate “automatic posting” of information between different modules to save time and effort of the end users. We also maintain “Integrity” of the data by integrating all these Modules with each other.

SAP Name and Architecture

SAP stands for Systems, Applications and Products in Data Processing

R/3 – Real time – 3 Tier Architecture

3 Tier Architecture:

1.Application Server

2.Database Server

3.Presentation Server (Client)

ECC stands for “Enterprise Central Component”.

Data processing Methods

There are two methods of processing data. They are

1.Batch processing

2.Real time processing

SAP is predominantly a Real time processing system. Batch processing functionality is also available basin on the requirements of different components.

Consultant: Consultant in SAP context is a person who understands client company’s requirements and configures / customizes SAP to suit the business process requirements of Clients Company.

End user: Employee working in a Client’s company is referred to as“End user”or“User.

Implementation Partner: Company which implements SAP for a client company is called as implementation partner in SAP practice.

Client: This term is used in our classes in two different contexts with two different meanings.

1.In Networking context: A machine in a Network which depends on a Server for resources.

2.In Business context: An entity getting services from a professional is known as Client.

Business Process: The step-by-step procedure used to carry out a business activity is known as

“Business Process”

Brief Notes on Components in SAP FI Module

Basic Settings / SAP Enterprise Structure: In Basic Settings, we create the Enterprise Structure and all the supporting objects required to create Master records and to post all types of GL documents.

We have 4 Components in FI Module. They are

1.General Ledger

2.Accounts Payable

3.Accounts Receivable and

4.Asset Accounting

General Ledger

In this component, we learn topics like creation of GL Master record, posting documents, displaying balances in GL Accounts, using tools like Sample documents, Recurring documents, creation of documents in Foreign currencies, setting up of “automatic calculation of Interest” mechanism etc. Objective of this component is to enable the users to create all GL Accounts required and post entries pertaining to all possible business transactions. We also need to facilitate generation of all Reports required.

Accounts Payable

Objective of this component is to facilitate identifying and making all payments to Vendors in time. We learn topics like creation of Vendor master record including all supporting objects required, posting of all possible business transactions like purchase invoice, vendor payment, vendor down payment etc.

The most important topic in entire SAP FI/CO curriculum is Automatic Payment Program (APP) and is a part of this component. The next important topic in this component is configuration of Withholding Tax (TDS).

Accounts Receivable

Accounts Receivable component is just a replica of Accounts Payable in terms of the functionality offered. Objective of this component is to facilitate receiving monies from Customers in time. We learn topics like creating Customer master record, posting of all possible transactions with customers, including calculation of VAT. The second most important topic in FI/CO Module is Dunning (which means reminding customers).

Asset Accounting

We deal with only Fixed Assets in this component. Objective of this component is to facilitate posting of all possible business transactions related to Fixed Assets like purchase of Assets, sale of Assets, scrapping of Assets etc. and configuration of automatic calculation of Depreciation. When we run Depreciation program as part of period closing, system picks up all important details like acquisition value, acquisition date, depreciation method to be used, depreciation rate to be applied, and business / legal rules to be applied and accordingly calculates Depreciation, creates an accounting entry also automatically.

Reports

In this component, we learn the art of identifying a suitable Report for every information / reporting requirement. If the required report is not available, then we need to create a Report. We have tools like Report Painter and Report Writer to create Reports on the fly. If creating a Report involves writing ABAP Code, we just need to communicate the requirements, by writing a Functional specifications document, to an ABAPer in our Project team.

sap fico online training: Closing Operations in SAP

sap fico online training: Closing Operations in SAP: Closing Operations Purpose: Closing operations are periodic tasks and can be subdivided in FI as follows: Day-end closing Mon...

Closing Operations in SAP

Closing Operations

Purpose:

Closing operations are periodic tasks and can be subdivided in FI as follows:

• Day-end closing
• Month-end closing
• Year-end closing

The closing operations component helps you prepare and carry out the activities required for day-end, month-end, and year-end closing. For this purpose, the system provides a series of standard reports that you can use to generate evaluations and analyses directly from all of the posted account balance. The system helps you carry out the following:

·         (Time-based) accruals/deferrals of expenses and revenues

• Creating the balance sheets and P&L statements
• Documenting the posting data

Audience:

(Who need to understand the closing procedure and are involved in the closing process)

AR/AP Data Controllers, CO Budget Analysts, Cost Analysts, Plant Analysts, Inventory Analysts, Asset Mgt. Analysts, GL Accountants, GL Master Data Controllers, GL Supervisors, PCA Analysts, and other Corporate Accounting employees who need to understand the month end close process.

Prerequisites :

To carry out the closing operations in G/L accounting, you first need to carry out the closing operations in the subledger accounting areas you are using. These include:

• Accounts receivable and accounts payable accounting
• Inventory accounting
• Asset accounting
• Payroll accounting (get posting data)

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Closing: Day-end

Day-end closing includes all the activities required at the end of the day to check that all of the business transactions posted on that day have been correctly processed.

No additional postings are required for day-end closing

Day-End Checklist:

The following things should be followed for day-end closing and for documenting the posting data:

• Correspondence with business partners (very Important)

·         Document journal

• Evaluation of the documents that have not been posted

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Closing: Month End

The closing of a period is performed in three sets of steps: pre-closing, managerial closing, and financial closing.

v  Pre-Close (Old Month):

·         Open new period

·         Preparatory Posting

·         Close Sub ledgers and feeder systems ( )

·         Preliminary close of the old period

Pre-Close activities ensure that all necessary entries have been posted in the G/L, including entries from feeder systems/sub ledgers and accruals and recurring entries posted directly to the G/L.

Pre-close activities occur in both the old and new months.

Managerial Close and Financial Close (New Month):

v  Managerial Close:

·         Controlling

ü  Reposting

ü  Cost allocations/Settlements

·         Re-open G/L for adjustment postings

v  Financial Close:

·         CO reconciliation posting to FI

·         Business area/profit center/profitability segment adjustments

·         Final Close of old period

·         Reporting

Managerial Close activities involve the re-assignment of costs throughout the entire organization, using the allocation and settlement functionality provided within Controlling (CO).

Financial Close activities include final adjustments to valuations and balances prior to the final close and preparation of reports. Adjustments from the cost flows recorded in the managerial closing activities are updated to FI through the reconciliation ledger posting.

General Steps for Month-end closing:

à Open/Close period àReverse accruals (prior month)

à Post Common  à Documents à Enter accruals (current month)

à Enter Recurring Entries  à Enter Manual documents à Check for parked documents à Ready to close.

Month-end closing includes all the activities involved in closing a posting period for the month and opening a new period for the next month.

Operations carried out for month-end closing:

• Open and close posting periods

You close one or more posting periods in the past for posting, and permit posting to be made to one or more current or future posting periods.

(Typically, you will leave two periods open. The prior period is open to allow period-end adjustments and a new open period is open for customer and vendor postings.)

• Create external reports

      You can use report programs to create the following reports, for example:

·         Financial statements

·         Sales tax report from the External Tax program

·         Withholding tax report

• Document the posting data

Report generation and study of the following:

·         Compact journal

·         Balance audit trail

·         Accounting reconciliation

·         Account balances

·         Open item list

1.  CO Period End Closing in Cost Center Accounting & Internal Orders

2.  CO Period End Closing in Product Costing, Profitability Analysis, Profit Center Accounting

3.  Period End Closing in MM, AA, AP,AR, GL

4.  Period End Closing Reporting

Things to check out for:

Fixed Assets

·         Execute the depreciation run and update the batch input session (SAP FI-AA)

 

Inventories

·         GR/IR clearing account – clarify any differences and correct them if necessary (SAP LO-MM)

·         Clear the GR/IR clearing account (SAP FI)

·         Prerequisite: Accounts have already been maintained by MM

·         MM Period closing program (SAP LO-MM)

·         Settle the work in process (WIP) (SAP FI-CO)

·         Post the reconciliation ledger (SAP FI-CO)

Receivables and Other Asset Items

·         Check whether all the billing documents have been posted (SAP LO-SD)

Accruals and Deferrals

·         Post accruals/deferrals (SAP FI-TR + SAP FI)

Internal Closing (SAP FI-CO)

Internal order and project-related tasks:

·         Transfer postings, surcharges, project interest calculation, settlement

Product and production-related tasks:

·         Release a standard cost estimate, perform inventory costing, transfer postings, surcharges

·         Variance calculation, results analysis, and settlement

Cost center-related tasks:

·         Transfer posting, distribution, assessment, activity allocation, transfer key figures, cost center variance, price calculation

Results-related tasks

·         Evaluate actual postings, transfer external data, distribution, assessment, transfer balance sheet items to PCA

Additional Requirements (FI)

·         Check whether the accrual/deferral documents have to be reversed

·         Carry out recurring entries and update the batch input session (SAP FI)

·         Reconcile cost of sales accounting/period accounting/profit center ledger (SAP FI/SAP FI-CO)

·         Close the posting period (SAP FI)

·         Run the reconciliation program

(This program checks the documents and transaction figures in the R/3 System. You can only execute this run if you do not intend to carry out any postings for the period, otherwise reconciliation differences will occur. You can schedule the job to run in the background)

Printing Reports :

·         Balance sheets and P&L statements

·         Sales tax report from the External Tax program

·         Account balances (SAP FI), Journals (SAP FI)

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Year-End Closing

Year-end closing is split into two phases:

·         At the beginning of the new fiscal year, you open new posting periods and carry forward the balances from the previous year.

·         You then prepare and create the financial statements, document the business transactions using the balance audit trail, and archive those documents you no longer need online.

The first posting in the fiscal year automatically opens that fiscal year. You must, however, have opened the relevant posting period first.

 

The SAP System offers a range of reports with which you can carry forward balances into the new fiscal year. During this process, the profit and loss accounts are carried forward to one or more retained earnings accounts. The balances of the balance sheet accounts are simply carried forward into the new fiscal year. You do not have to create special opening financial statements.

Any postings you make in the old fiscal year automatically adjust the relevant carry-forward balance. You do not have to close the old fiscal year and carry out the closing postings before opening the new fiscal year.

As with month-end closing, you can create all the external reports required, document the posting data, and carry out the internal evaluations.

Things to look for:

Assets

·         Settle the AuC (SAP FI-AA)

·         Execute the depreciation run and update the batch input session (SAP FI-AA)

·         Run the fiscal year change in Asset Accounting (SAP FI-AA)

(This process creates the balance carryforwards for Asset Accounting. We recommend that you execute this run on the first day of the new fiscal year. Note: by this time, you should have completed year-end closing for Asset Accounting for the previous year.)

·         Carry out inventory postings

 

Inventories

·         GR/IR clearing account – clarify differences and correct them if necessary (SAP LO-MM)

·         Clear the GR/IR clearing account (SAP FI)

(Prerequisite: The accounts have already been maintained by MM.)

·         Run the foreign currency valuation for the open items

·         Period closing program (SAP LO-MM)

·         Settle the work in process (WIP) (SAP FI-CO)

·         Post the reconciliation ledger (SAP FI-CO)

·         Valuate the inventory (SAP LO-MM)

·         Post the valuation difference manually (SAP FI)

Receivables and Other Asset Items

·         Check whether all the billing documents have been posted (SAP LO-SD)

·         Clarify the open items and differences

·         Print the balance confirmations (SAP FI)

·         Settle the rebates(SAP LO-SD), accruals

·         Calculate the interest for interest-bearing receivables (SAP FI)

·         Reconcile the cash journal/print out the journal (SAP FI)

Accruals and Deferrals

·         Post accruals/deferrals (SAP FI + SAP FI-TR)

Accruals

·         Accruals for rebates, discounts, and commissions (SAP LO-SD)

Payables

·         Payroll accounting

Internal Closing (SAP FI-CO)

Internal order and project-related tasks:

·         Transfer postings, surcharges, project interest calculation, settlement

Product and production-related tasks:

·         Release standard cost estimate, perform inventory costing, transfer postings, surcharges, variance calculation, results analysis, and settlement

Cost center-related tasks:

·         Transfer posting, distribution, assessment, activity allocation, transfer key figures, cost center variance, price calculation

Results-related tasks

·         Evaluate actual postings, transfer external data, distribution, assessment, transfer balance sheet items to PCA

Additional Closings and Tasks (SAP FI)

·         Post accruals/deferrals (SAP FI)

·         Check whether the accrual/deferral documents have to be reversed

·         Carry out recurring entries and update the batch input session (SAP FI)

·         Carry forward the balance

·         Check the balances carried forward against the closing balances of the previous year

·         Start carrying forward the balance, if necessary (SAP FI)

·         Reconcile cost of sales accounting/period accounting/profit center ledger (SAP FI/SAP FI-CO)

·         Reconcile the asset history sheet and account balances

·         Close Asset Accounting (SAP FI-AA)

·         Close the posting period (SAP FI)

·         Run the reconciliation program

(This program checks the documents and transaction figures in the R/3 System. You can only execute this run if you do not intend to carry out any postings for the period, otherwise reconciliation differences will occur. You can schedule the job to run in the background.)

·         Balance audit trail (SAP FI)

Printing Reports and Notifications:

·         Asset history sheet (SAP FI-AA)

·         Balance sheets and P&L statements (monthly and annual reports using Financial Statement version 0010)