Introduction to SAP FICO, REM & SEM

Bharat Sanchar Nigam Limited4th August 2009

Structure of FICO Modules

Client

Company Code

The company code is the smallest organisational unit for which you can have complete independent accounting.

It is a legal entity for which the financial statements such as Balance Sheet, Profit & Loss Account are created.

It may represent a company within a corporate group.

Controlling Area

•Organizational unit used for

management accounting purposes.

•A controlling area may contain one

or more company codes, which can

operate in different currencies, if

required.

•The company codes within a

controlling area must all use the

same operational chart of accounts.

Operating Concern

The Operating Concern is the highest

reporting level within Controlling; defines

the organisation from Sales market

perspective.

One or more controlling areas can be

assigned to an operating concern.

Corporations have only a single

operating concern, which is

recommended for the sake of simplicity

and convenience if all controlling areas

and company codes share the same

fiscal calendar.

Plant

A plant is an organisational logistics unit that structures the enterprise from the perspective of production, procurement, plant maintenance and materials planning.

A plant can be a manufacturing facility or a branch within a company and responsible for producing some activity (capacity planning).

Storage Location

An organisational unit that allows the differentiation of material stocks within a plant.

Inventory management and physical inventory are carried out on a quantity basis at storage location level, within a plant.

Org Levels in Inventory Mgmt

Client

Company Code0001

Company Code0002

Plant 1000

Plant 2000

Plant 3000

Storage Loc0001

Storage Loc0002

Storage Loc0003

Purchasing Organisation / Group

A purchasing organisation is an organisational level that negotiates conditions of purchase with vendors for one or more plants or companies. It is legally responsible for completing the purchasing contracts.

A purchasing group is the key for a buyer or group of buyers responsible for certain purchasing activities. It is linked only to a material in a plant and not assigned to any other organisational element.

Plant Specific Purchasing Organization

Company CodePurchasingOrganisation 1

PurchasingOrganisation 2

Plant 1 Plant 2

Cross Company Code Pur. Org.

Plant 1 Plant 2 Plant 3

PurchasingOrganisation 1

Company Code 1 Company Code 2 Company Code 3

Sales & Distribution – Sales Organisation

SAP AG 1999

Organizational Units: Sales Organization

Responsible for:

distributing goods and services

negotiating sales conditions

product liability and rights of recourse

Sales organization

Sales & Distribution – Distribution Channel

S A P A G 1 9 9 9

O rg a n iz a tio n a l U n its : D is tr ib u tio n C h a n n e l

is a m e a n s th ro u g h w h ic h s a le s m a te r ia ls re a c h th e c u s to m e r

re p re s e n ts y o u r s tra te g ie s to d is tr ib u te g o o d s a n d / o r s e r v ic e sto y o u r c u s to m e r

fo r e x a m p le : w h o le s a le t ra d e , re ta il t ra d e , in te rn e t t ra d e , .. .

S a le s o rg a n iz a tio n

D is tr ib u tio n C h a n n e l 1 D is tr ib u tio n C h a n n e l 2

Sales & Distribution - Division

S A P A G 1999

S ales A rea

S aleso rg an ization

D istrib u tionchan nel

D ivis ion

2 R eta il trade

2 M oto rc yc les 3 C om pu te rs 3 C om pu te rs

5 In te rne t

2 B erlin

1 P um ps

1 W ho lesa le trade

2 M oto rc yc les

122

123

153

212

2

1 Frankfu rt

11

S ales areas

Organizational Levels in SD – Sales Area

Sales Orgs are assigned to company codes. Multiple Sales Orgs can be assigned to a company code. One Sales Org can belong to only one company

code.

Sales Org 2Sales Org 1

CompanyCode 1

Sales Org 2Sales Org 1

CompanyCode 2

SD – Integration with Finance

Plants are assigned to sales organizations. One plant can be assigned to multiples sales organizations or multiple plants can be assigned to one Sales org.

Plant 2Plant 1

D Chnl 2D Chnl 1

Sales Org 1

Plant 2Plant 1

D Chnl 2D Chnl 1

Sales Org 2

SD – Integration with Materials Management

Organisational Units

Internal Accounting

External Accounting

Internal logistics(MRP/Production)

Inventory management

External logistics

ViewsViewsOperating Concern

Controlling areas

Sales organizations

Company codes

Valuation areas

Plants

Storage locations/special stocks

Purchasingorganizations

LevelsLevels

Reporting Requirements

S A P A G 1 9 9 9

R e p o r t in g R e q u ir e m e n t s

E x t e r n a l A c c o u n t in g

In t e r n a l A c c o u n t in gIn t e r n a l A c c o u n t in g

E x t e r n a l r e p o r t in g

C o s tc e n t e r

r e p o r t s

P r o f i tc e n t e r

r e p o r t s

C o n t r i -b u t io n

m a r g in sP r o d u c t

c o s tr e p o r t s

P r o f i t &lo s s

( P & L )

B a la n c eS h e e t

C a s hf lo w

s t a te m e n t R e ta in e de a r n in g s

In t e r n a lIn t e r n a lr e p o r t in gr e p o r t in g

Typical Question in Profit Centre Accounting

Typical Questions Accounting What is the operating profit

for a profit centre?

What asset value is attributedto a profit centre?

Which responsibility areas

exceeded their plan last month ?

What goods and services are

exchanged within the corporation ?

Contribution of

an organizational

unit

Return on

Capital

Management

of Internal

Sales & Services

Cost Management

Typical Questions in Profitability Analysis

Organisation View

Profitability Analysis – Data Structure

-

STATERegion Rural/ Urban

Product FLPP, MobileState Karnataka

CharacteristicsCharacteristics

Revenues 800Expenses 650

Value Fields

Revenue

Expenses

Profitability

segment

ValuesValues

RE

GIO

N

PRODUCT

Organisational Units & Master Data

SAP AG 1999

Organizational Units & Master Data

Order Cost ObjectProject

Cost Center

ControllingControllingAreaArea

CompanyCodes

ProfitCenters

ProfitCenters

ProfitCenters

ProfitProfitSegmentSegment

ProfitProfitSegmentSegment

OperatingOperatingConcernConcern

ProfitProfitSegmentSegment

Cost CenterCost Center

CompanyCodes

PlantPlant

CompanyCodes

Distribution Channel

Division

Sales Organization

General Ledger - Chart of Account

GL Chart of Account – Account Group

General Ledger - Chart of Account

General Ledger - Posting Period Variant

GL Standard Posting – Document Display

Cost Centre Hierarchy

Profit Centre Derivation

Financial Accounting – Other Dimensions

Books can be balanced with in or across a Company code by

Profit Centre

Business Area

Segment

Any other Custom defined Field

Document Splitting Functionality is used to split the balance sheet

items

Financial Accounting – Document Splitting

Financial Accounting – Document Splitting

Direct Posting to PA Segment

Account assignment

easily accessible

Entry aids• central

• user-defined

GL Account Balance - Display

Cross Company Code Transactions

Open item clearing

Chart of Account – Sub LedgersReconciliation Accounts

Customer & Vendor Accounts Groups

Accounts Payable – Vendor Master

Vendor Master – Different Views

Normal Procurement Cycle

Vendor Invoice – Three Stage Verification

Vendor Invoice – Payments Program

AR - Customer Master Record

Asset Accounting – Asset Class

Asset Accounting – Chart of Depreciation

Organisational Units & Master Data

SAP AG 1999

Organizational Units & Master Data

Order Cost ObjectProject

Cost Center

ControllingControllingAreaArea

CompanyCodes

ProfitCenters

ProfitCenters

ProfitCenters

ProfitProfitSegmentSegment

ProfitProfitSegmentSegment

OperatingOperatingConcernConcern

ProfitProfitSegmentSegment

Cost CenterCost Center

CompanyCodes

PlantPlant

CompanyCodes

Distribution Channel

Division

Sales Organization

Co. Code Description Currency

1001 BSNL – Corporate Office INR

1002 BSNL – Karnataka Circle INR

1003 BSNL – Maharashtra Circle INR

1004 BSNL – Southern Maintenance Zone INR

1005 BSNL – Mumbai Telecom Factory INR

1006 BSNL – Mumbai Project Circle INR

1007 BSNL – ALTTC, Ghaziabad INR

1008

1009…

Understanding BSNL - Company Codes

Co. Code Profit Centre

Cost Centre

BSNL – Karnataka (1002)

Bangalore SSA Mysore SSA Other SSA...

Marketing

Belgaum SSA

Operations

Billing

R & D

F & A

Marketing

Operations

Billing

R & D

F & A

Marketing

Operations

Billing

R & D

F & A

Marketing

Operations

Billing

R & D

F & A

GL Accounts1760301 – Water Charges

1760302 – Electricity Charges1760303 – Fuel Charges

Understanding BSNL - Karnataka Circle

Co. Code - 1002

Profit Centre – Bangalore

Area = Rural/Urban

GL Account for Revenue Posting

1310204 – ISD Calls

1310101 – Fixed Charge 1310102 – Share from Deposit

1310201- Local Calls

Financial Accounting

Posting can be done at Co. Code (for Circle)

and at Profit Centre

(for SSA)

Break up by LOB

Can be done using Characteristics in

CO-PA (Profitability

Analysis)

Service = Telephone/ Telex/Telegraphs/WILL – Fixed/ WILL- Mobile/VAS/ Broadband Services

Understanding BSNL - Revenue Posting

Transactions Analysis

Org Design

Master data

AccountingPlan Actuals Reporting

Business Entity

Building

Land

Rental Objects

Business Partner

Occupancy Planning

Costs

Revenues

From FI

From CO

From Other Modules

Accrual / Deferrals

Occupancy

Cash flow

Others

End to End SAP Process Road Map

Identify Org. Units

Org. Unit Hierarchy

Identify

Org. Units

Org. Unit

Hierarchy

Real Estate Management

Real Estate Management – Master Data

Real Estate – Master Data

Rental Objects

Real Estate – Contract Management

Real Estate – Cost Sharing

Real Estate – Integration with Other Modules

Real Estate – Integration with PM

Strategic Enterprise Management

SEM – Data structure

SEM – Business Planning

SEM – Business Consolidation

Currency translation

Master data

VersionsSimulationRestatement

Monitor

Validation

Manual postings

OKERR

Automated consolidation

Inter-unit eliminationProfit elimination in inventoryCons. of investments Reclassification

Data collection• FI interface• CO interface• Layouts

• PC Data collection• Flex. File Upload• Web Access

Profit and loss Statement

123

CASales

B50

Active ExcelSpecial Reports

BW Reporting

SEM – Consolidation Monitor

Cons Groups FS Items Data Monitor Cons Monitor Info system Parameters

I / S

CF

. . .

US CoA

B / S

CA

FA

Equity

Liab.

World

America

USA

Canada

Europe

Asia

. . .

Status

World

America

USA

Canada

Europe

Asia

. . .

Report tree

B / S

I / S

CY / PY

Periods

Region

F.Area

. . .

. . .

SEM – Business Consolidation

8. Inter unit Elimination 8. Inter unit Elimination

8. Interunit elimination 10. Consolidation of investments

9. Elimination of IU profit/loss in inventory

6. Currency translation and rounding

5. Reconciliation (with manual entries)

4. Standardization of reported data

2. Data collection

1. Balance carryforward

3. Validation of reported data

7. Allocation

11. Reclassification

12. Validation of consolidated data

Questions and Answers?

Thank You