FI-COA Workshop Et Rk018

8/12/2019 FI-COA Workshop Et Rk018

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SAP America Inc. FI-COA.ppt Jan, 1999

Right Solution, Right Time, Right Price

FI-COA Workshop




Business Process Workshop

The objectives of the chart of accounts

workshop are to:

• Demonstrate SAP procedures

• Discuss customer business requirements

• Communicate scope expectations

• Facilitate scoping and planning exercises




Agenda

Topics:

• Financial Applications

in Scope

• Company Codes

• Chart of Accounts

• G/L Accounts

• Controlling Area

• Profit Centres

• Cost Centres

• Internal Orders

• Cost Elements




The Financial ApplicationVarious financial modules provide different views of a

company’s financial situation and performance and allowdifferent levels of control.

COFI

General Ledger

Sub-ledgers

TR

Treasury Mgmt

Overhead

Production

Profitability

Cash Mgmt

EC

Funds Mgmt

Enterprise Controlling

Capital Investment & FinancingIM




SAP Financial Applications

• FI-GL General Ledger Accounting• FI-AR Accounts Receivable• FI-AP Accounts Payable• FI-LC Legal Consolidation • FI-SL Special Purpose Ledger• FI-AA Asset Accounting

FI - Financial Accounting

• TR-CM Cash Management• TR-FM Funds Management• TR-TM Treasury Management

TR - Treasury

• IM - FA Tangible Fixed Assets

IM - Investment Management

• CO-OM Overhead Cost Controlling• CO-PC Product Cost Controlling• CO-PA Sales & Profitability Analysis• CO-ABC Activity Based Costing

CO - Controlling

• EC-PCA Profit CENTRE Accounting• EC-EIS Executive Information System

EC - Enterprise Controlling

SAP abbreviation &product name

FINANCIAL ACCOUNTING CONTROLLING

The modules are further broken down into sub-modules:




ACCOUNTS

RECEIVABLE

ACCOUNTS

PAYABLE

ASSET

MANAGEMENT

COST CENTRE

ACCOUNTING (CCA)

INTERNAL ORDERACCOUNTING (OPA)

PROJECT

ACCOUNTING

PRODUCT COSTING

PROFIT CENTRE

ACCOUNTING (PCA)

FINANCIAL

ACCOUNTING

(FI / AM)

FINANCIAL

REPORTING

(FI)

MANAGEMENT

REPORTING

(CO)

GENERAL

LEDGER

NATURAL

ACCOUNT

Finance Management /Accounting & Reporting

SD

MM




Organizational Elements

• In the SAP R/3 System:

– Organizational elements are structures that

represent the legal and/or organizational views

of an enterprise – You can design your company structure based

on your business processes and reporting

requirements

• The organizational elements form a

framework that supports all business

activities.


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FI Organization & Master Data

G/L ACCOUNTS:

CHART OF ACCTS:

COMPANY CODE:

Independent entity - legal entity or division

List of all natural accounts available to all company codes

Natural accounts linked from the chart of accounts toa specific company code

$



Company Code A company code represents an independent

balancing/legal accounting entity, for example, acompany within a corporate group.

Balance sheets and profit & loss statements,required by law, can be created at the company codelevel.

BALANCING / (LEGAL)ENTITY

=

COMPANY CODE

Assets Liabilities Revenues

- Expenses

Profit/Loss



Pre-Configured Client

0020Canada

0010UnitedStates

The Pre-ConfiguredClient has twoCompany Codes

In an international

business, operations areoften scattered acrossnumerous countries.Since most governmentsand tax authorities requirethe registration of a legalentity for every company, aseparate company code is

usually established.



G/L Account Master Records

in Company Code

Company Code

0010

COA 0010 COA “XXX” central

lyCompany Code

0020

Company Code

XXXX

Client

in Chart of Accounts



Traditional Chart of Accounts

A 0 1 1 9 5 5 1 0 2

Company or Division

Department or Cost Centre

Natural Account Sub-Account



SAP Chart of Accounts

• NATURAL account only

• Up to 10 digits, but for pre-configured

system, defined at 6 digits

• Numeric

• Other segments of the traditional account are

handled via other organizational elements in

SAP, such as cost centre and profit centre



Pre-Configured Chart of Accounts

StructureThe Structure of the Supplied Chart of Accounts:

100000 Assets

200000 Liability

300000 Capital/Equity

400000 Revenue and Deductions

500000 Cost of Sales

600000 Operating Expenses

700000 Other Expenses

900000 Other Income and Expenses



Example

Assets 111000 Cash

121000 Accounts Receivable - Trade

131000 Inventory - Raw Materials111120 Cheques issued

152000 Other Prepaid Items

160010 Land



External Reporting Internal Reporting

FI CO

Regulatory Compliance Ad Hoc

CA CMA

Stockholders Internal Management

Historical Forecasting

Financial (FI) vs. Controlling (CO)



CO Organization and Master Data

COST CENTRES:

COST ELEMENTS:

Classification of costs in CO

COST CENTRES

Public

RelationsSales

Market ing

$

CONTROLLING AREA:

PROFIT CENTRES:

INTERNAL ORDERS:

Areas of responsibility in the company that incur costs



Controlling Area

The contro l l ing area identifies a self-contained,

organizational element for which the management ofcosts and profits can be performed.

Controlling Area

COMPANY CODE

Assets Liabilities Revenues

- Expenses

Profit/Loss



Organizational Elements - CO

Controlling Area

0010Pre-configured US

Company

CompanyCodes

OperatingChart of Accounts

0010

ControllingArea0010

0020Pre-configured CDN

Company




Profit CENTRES

Profit CENTRE Hierarchy

CalgaryBranch

MontrealBranch


Company


0010

ControllingArea0010


Company




• Used to calculate the profit of an area of responsibility

within the organization(e.g. branch)

• The areas of responsibility(Profit CENTRES) could be based on regions, functions or products

• A Profit CENTRE is not an independent account

assignment object at the moment of entering a

transaction in SD or MM - it is derived from existingobjects

Profit CENTRE Accounting




• As a default, revenue and costs for Profit CENTRES are derived

as follows:

– Sales order line item based on the product being sold

– Direct costs based on the assignment of production orders and direct

costs. The system proposes the Profit CENTRE based on the Profit

CENTRE of the material being produced

– Overhead costs based on the assignment of the Cost CENTRE or other

cost object

• Substitution rules can be used to change the default derivation• Supports both actual and planned data

Profit

CENTRE




Profit CENTRESand CostCENTRES

Profit CENTRE Hierarchy

CalgaryBranch

MontrealBranch


Company


0010

ControllingArea0010


Company

Cost CENTRE Hierarchy

SalesInformation

SystemsMarketing




• Departmental breakdown

• Lowest level of organization where you want to collect and

analyze costs/departmental performance

• Departmental budgets and expense analysis of P & L accounts

• Inter-departmental cost allocations

• Each Cost CENTRE is assigned to a Company Code and Profit

CENTRE

• Cost CENTRES are structured into organizational and/or

functional hierarchical groups

Cost CENTRES



• Can create geographic hierarchy for operational

management (e.g. Calgary, Montreal, Toronto)

• Can create multiple alternate hierarchies for functional

management (e.g. Accounting department in Calgaryand the Accounting department in Toronto can be

grouped together to form the Corporate Accounting

department or the Operations Accounting department)

• Can get fixed assets at the Cost CENTRE level

Organizational Elements - COCost CENTRES - Hierarchies



Internal o rders are used to collect, monitor and settle

the direct and indirect costs incurred by a specificproject. They are cost collectors that have a moredynamic nature than cost or profit CENTRES.

Internal Orders

G/L

Publicity Event 1997

Production Order 146

Item # 125-96

Sales Order 146

Research Project 883 Maintenance Request

INTERNAL ORDERS

Prof i t CENTREs

Cost CENTREs

Internal orders are used for various detailed reporting needs.





• Internal orders can be used for a variety of purposes

in CO

• Two examples are as follows:

– For a customer event, an internal order is created which

tracks a budget and all actual amounts for the event.

Actual can then be compared to budget for the event. After

the event, the costs are moved to the appropriate cost

centre. – Vehicle costs all go to one cost centre, but the costs for

each vehicle are also tracked “statistically” using an

internal order for each vehicle.

Internal Orders





• In the pre-configured system, orders may be

used as a primary cost object which is then

settled to a cost centre, or as a statistical

posting object where the primary posting goes

to the cost centre.

• No plan data will be entered for orders - it will

instead be entered on the cost centres.

Internal Orders





• In SAP, a P&L-related G/L account is either

linked or not linked to Cost CENTRE

Accounting

• The linking is performed by creating the G/L

account as a Cost Element or Revenue

Element under the CO Module

• All Cost / Revenue Elements are available to

all Cost Centres / Profit Centres

Cost Elements




Balance SheetAccounts

Secondary CostElements

Profit and LossAccounts

Primary CostElements

FI CO

FI Accounts vs. CO Cost Elements




PRIMARY COST ELEMENTS:

Describe costs that occur outside of Controlling

Link to FI expense account

SECONDARY COST ELEMENTS:

Describe cost flows that occur only within Controlling

No link to FI expense accounts

Primary and Secondary Cost Elements




In Scope

• G/L accounts based on chart of accounts

0010

• Cost centres with actual and plan

• Profit centres for P&L data with actual,

budget and plan

• Internal orders with actual and budget




Potential Future Phases

• Profit centres for balance sheet items

• Planning for internal orders

• Plan settlement




Summary of Workshop

• Verify understanding of – chart of accounts

– cost centre hierarchy

– profit centre hierarchy

– use of internal orders

• Discussion

• Summary of gaps



Right Solution, Right Time, Right Price

Documents

FI-COA Workshop Et Rk018