Accounting Foundation

Accounting Foundation

The accounting system with its various sub-units is a critical part of the SAP solution. The integration of the various aspects of accounting with each other and with logistics and human resources applications becomes a management tool for all company departement.

                       

SAP R/3 provides all the necessary functions for developing a uniform accounting system that can be consolidated across international borders.

SAP R/3 offers flexible software that can be used in different countries. The system meets the needs of major industrial nations of the world with its multilingual approach, flexible currency handling, and country-specific functions for taxes, reporting, and payment transactions.

The SAP R/3 Accounting System consists of several components:

·         Financial Accounting (FI)

·         Corporate Finance Management (CFM)

·         Profitability and Sales Accounting

·         Product Cost Controlling

·         Overhead Cost Controlling

·         Investment Management (IM)

·         Project Management

 Components Financial Accounting (F1)

·         G/L Accounting

·          Accounts Payable and Accounts Receivable

·         Asset Accounting

 Components Corporate Finance Management (CFM)

·         Corporate Finance Management (planning, analysis, decision support, financial transactions, payments, and risk capabilities in various group environment)

Profitability and sales accounting 

Profitability Analysis

Components Product Cost Controlling 

·         Product Cost Planning

·         Cost Object Controlling

Components Overhead Cost Controlling 

·         Cost Centers

·         Internal orders

·         Activity-Based Costing

Investment management

Allows company-wide planning of capital investment programs and control of individual capital investment measures.

Project management 

Allows efficient planning, cost-sensitive control, and target-oriented implementation of projects with comprehensive integration with Controlling and Logistic.

Concept of company, company code, business area, functional area, profit center

·         Company

This represents a legally autonomous entity, composed of one or more company codes.

·         Company code

This represents the tax law (national ) view of the company. Fiscal calendar ,local currency and tax reporting requirements determine the design of the complete and reconciled tracking system.

·         Business area

This helps depict internal structures for external segment reporting

·         Functional area

This are displays the profit and loss statement according to cost of sales accounting

·         Profit center (management accounting)

With its flexible design , this controlling term is used to deciept internal areas of responsibility.

Chart of account, 

Is a created list of the accounts used by a business entity to define each class of items for which money or the equivalent is spent or received. It is used to organize the finances of the entity and to segregate expenditures, revenue, assets and liabilities in order to give interested parties a better understanding of the financial health of the entity.

The chart of accounts can be respresented in the SAP system as one of three function:

As an operational chart of accounts

As a local chart of accounts

As a group chart of accounts

Vendor master - account payable 

The vendor master -- account payable contains all the information a company needs for its business relationships with vendors. This data controls the posting transaction as well as the processing of posting data.

Vendor master - account payable

Overview of all data for a given vendor

Flexible data access

Baseline data used to control payment transactions and to represent business processes

General data

Includes address and telecommunications data (telephone, fax & telex information), general data vendor information ( coporate group, industry branch) as well as bank details.

Company code data

Includes company specific policies concerning payment transaction, dunning procedures and correspondence information.

Purchasing organization data

Includes inquiry, order and invoice verification information.

Asset management

Increasing automation makes palnning and monitoring of fixed assets for external and internal accounting purpose ever more important.

Asset class, asset master record

Support the structuring and classification of fixed assets.

Account balance

A line item display provides an overview of the open, cleared and parked items from an account.