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D1007TBP/FICO /1.0/06/09/2000

Financial Accounting & Controlling D1007 KBL e-MAD

Table of Contents

3Organization Structure

Company Code3Business Area3Chart of Accounts3Controlling Area4Operating Concern4Master Data5General Ledger5Customer5Vendor6Cost Centres7Cost Centre Standard Hierarchy7Cost Centre Group (Alternate Hierarchies)7Profit Centres8Profit Centre Standard Hierarchy8Profit Centre Groups (Alternate Hierarchies)9Cost Elements (Primary and Secondary)9Revenue and Cost Element Group9Activity Types11Statistical Key Figures (SKF)12General Ledger13G/L Posting Standard13G/L Posting Offsetting15G/L Planning ( Standard )17Manual Clearing (Standard)19Accounts Receivable20Customer Invoices (SD and SM Module Related)20Customer Invoices (FI Generated)22Customer Down Payment (Standard)24Manual Account Clearing (Customer)26Manual Incoming Payments28Manual Outgoing Payments30Posting of parked documents ( Standard )32Customer Down Payment Clearing34Customer Credit Memo (FI Generated)36Accounts Payable38Vendor Invoices38Vendor Credit Memo (Invoice related)40Vendor Down Payment (Standard)42Manual Clearing (Vendor)44Vendor Invoice ( Standard ) (Direct FI Invoices)46Vendor Credit Memo ( Standard ) (Direct FI related)48Manual Outgoing Payments50Posting of parked documents ( Standard )52Vendor Down Payment (Clearing)54Closing Operations55Foreign currency valuation (balances)55Foreign currency valuation Open items57Regrouping of Receivable and Payables59Business Area Adjustment60Customer / Vendor balance interest calculation61Maintain GR/IR clearing account63Periodic Reporting65Balance carried forward (FI)67Material Debit / Credit68Material Price Change69Withholding Tax70Periodic Processing72Dunning Notice (Customer)72Automatic Clearing74Dunning Notice (Vendor)75Profit and Cost Planning76Statistical Key Figures76Cost Centres76Activity Prices77Profit Centres77Profitability Segments77Actual Posting (Regular as well as Period-end)79Statistical Key Figures79Cost Centres79Internal Orders80Profit Centres80Service Orders80Sales orders which are cost objects (other than make to stock)81Profitability Segments81Management Reporting83Cost Centre Accounting83Internal Orders83Profit Centre Accounting83Sales Orders / Service Orders84Profitability Analysis84

Organization Structure

Company Code

Minimum one company code is required in SAP R/3 system. Audited Accounts for KBL e-MAD will be required to include the same in the accounts of Kirloskar Brothers Limited (KBL). KBL e-MAD shall present its financial statements as per the requirements of Schedule VI to the Companies Act, 1956 so that consolidation process with KBL accounts will be smooth.

CodeName

KB10Kirloskar Bros Ltd. E-MAD

Business Area

As explained by KBL, the company is required to disclose its segments as based on product groups (8 Segments) and geographic locations i.e. about 30 segments (India and all other countries). R/3 will provide segmental data based on product groups (defined as business areas), while geographic location wise information will be available through Profit Center Accounting. Additional balance sheet related data such as fixed assets, bank balances etc. need to be compiled by the accounts department. CodeName

BA01Industrial Pumps Group

BA02Project and Engineered Pumps Group

BA03Valves Group

BA04Machine Tools Group

BA05Agricultural and Domestic Pumps Group

BA06Printing Press Group

BA07Anti-Corrosion Products Group

BA08Other Products

BA09Common Services

Chart of Accounts

One company code can use only one Chart of Accounts and hence only one will be defined.

CodeName

KBCAKirloskar Bros Chart of Accounts

Controlling Area

At least one controlling area is required to activate the CO Module and one company code can be assigned to only one controlling area. CodeName


Operating Concern

At least one operating concern is required to be defined to activate Profitability Analysis. A decision in taken by the project management to activate Profiatbility Analysis module at a later date. Therefore it will not be activated but the TOBE document contains the procedure for future. The operating concern when activated will be Costing Based .CodeName


Master Data

General Ledger

The G/L master will be of 6 digits as in the legacy system. It will help in maintaining the user comfort. These G/L accounts will be logically grouped into account groups within chart of account (KBCA). The account groups and number ranges for the G/L masters are as follows:

Type of GLAccount GroupNumber Range

LiabilitiesLIAB100000 to 199999

AssetsASST200000 to 299999

IncomeINCO300000 to 399999

ExpensesEXPS400000 to 499999

Creation of new G/L account and changes thereto in Chart of Account will be controlled centrally by Corporate Finance and Accounts Department, Pune. Display authority should be available to all the users.

The entire general ledger accounts except for control (Reconciliation) accounts will be subject to line item management. Most of the balance sheet accounts will be subject to open item management. EEFC accounts are to be maintained in foreign currency.

Customer

Customer master should contain data regarding his complete name, complete postal address, telephone number, fax number, E-mail address, name of contact person, whether registered dealer or unregistered, in case of registered dealer his registration numbers under local sales tax, central sales tax, works contract tax, income tax, excise act, type of customer, whether he is a vendor also.

Customers should be bifurcated into various types such as: Dealers, Direct Customers, Industrial Sector, Government / Semi Government Undertakings, Original Equipment Manufacturers, Turnkey Project Customers, Associate Concerns, Overseas Clients, One Time (Stray) Customer.

The range of accounts numbers will be of 6 digits which is allocated as under:

Customer Group CodeCustomer Group NameNumber RangeReconciliation Account

KBEXExports KBL151000 to 170000240200

KBINInland KBL100000 to 150000240100

KBOTOne-time cust.- KBL171000 to 171100240100

Every customer will have unique account number for E-MAD operations.

Whenever new customer master is to be opened the requiring department will forward a requisition in specific format to concerned department. On the basis of such requisition, new customer master will be opened. In case of change it will be informed to the concerned department to effect the changes in master record.

Vendor

Vendor master should contain data regarding his complete name, complete postal address, telephone number, fax number, E-mail address, name of contact person, registration numbers under local sales tax, central sales tax, works contract tax, income tax, excise act. It should also be mentioned whether he is small-scale industrialist, type of vendor, whether he is a customer also.

Vendors should be bifurcated into various types such as: Employee, Factories and offices of KBL, Ancillary Units, Small Scale Industries, and Overseas Suppliers, Contractors, Associate Concerns and others.

The range of accounts numbers will be of 6 digits which is allocated as under:

Factories and offices of KBL

200001 to 200200-KBFA

Ancillary Units

200201 to 210000-KBAU

Small Scale Industries

210001 to 220000-KBSS

Overseas Suppliers

220001 to 225000-KBOS

Contractors

225001 to 230000-KBCT

Associate Concerns

230001 to 231000-KBAC

Others

231101 to 240000-KBOT

Capital Goods

231001 to 231100-KBCG

Employees

000001 to 200000 - KBEM

(Employees ticket number will be his account number in AP Ledger)

Following will be the respective Reconciliation Accounts in General Ledger for above range of accounts:

140300 Depot Ledger Controlling Account for range of accounts with numbers 200001 to 200200.

140400 Advance Ledger Controlling Account for range of accounts with numbers 1000 to 200000

140500 Accounts Payable Controlling Account for all the remaining accounts.

Every vendor will have unique account number for E-MAD operations.

Whenever new vendor is to be opened, the requiring department will forward a requisition in specific format to concerned department. On the basis of said request, new account will be opened.

In case of change it will be informed to the concerned department to effect the changes in master record.

Cost Centres

Cost centres will be defined to reflect location and product group. The cost centre numbers will be numeric of five digits. The numbering logic will be as follows:

First two numbers

Location (e.g. Pune, Mumbai)

Last three numbers

Product group (e.g. DB, KPD, and Mini)

For each location, common cost centres will also be created to collect costs, which are not directly allocable. One additional common cost centre will also be created at locations with service centres for service management.

Combination of product groups will form a product division (e.g. industrial pumps, valves). Product division will not form part of cost centre numbering logic but will be reflected through sub-groupings (nodes) in cost centre standard and alternate hierarchies.

Cost Centre Standard Hierarchy

Standard hierarchy will be maintained location wise, product division wise. The node names will be KBC00 + location code + Product division code. The hierarchy structure will be as follows:

KBC00

KBC00 + location code

KBC00 + location code + product division code

The cost centres will be attached to the lowest level node.

Cost Centre Group (Alternate Hierarchies)

Additional cost centre groups will be maintained product division wise, product group wise as follows:

KBC10

KBC10 + product division code

KBC10 + product division code + product group code

Profit Centres

Profit centres will be defined to reflect location, product group and SBU. The profit centre numbers will be numeric of seven digits. The numbering logic will be same as that of cost centres for location and product group:

First two numbers

-Location (e.g. Pune, Mumbai)

Next three numbers

-Product group (e.g. DB, KPD, Mini)

Last two numbers

-SBU

The cost centres will be attached to the respective profit centres.

Combination of product groups will form a product division (e.g. industrial pumps, valves). Product division will not form part of profit centre numbering logic but will be reflected through sub-groupings (nodes) in profit centre standard and alternate hierarchies.

Profit Centre Standard Hierarchy

Standard hierarchy will be maintained location wise, product group wise. The node names will be KBL00 + location code. The hierarchy structure will be as follows:

KBP00

KBP00 + location code

KBP00 + location code + product division code

The profit centres will be attached to the lowest level node.

Profit Centre Groups (Alternate Hierarchies)

Additional profit centre group will be maintained as follows:

KBP10

KBP10 + product division code

KBP10 + product division code + product group code

KBP20

KBP20 + SBU

Cost Elements (Primary and Secondary)

The necessary income and expenditure GL accounts will be created as primary cost and revenue elements. The number range has to be of same as that of GL accounts i.e. 300000 to 499999. The following primary cost element categories will be used:

1-Primary costs/cost-reducing revenues

4-Accrual/deferral per debit = actual

11-Revenues

12-Sales deduction

22 -External SettlementThe secondary cost elements will be created with a number range of 500000 to 599999. The following secondary cost element categories will be used within the given number ranges.

CategoryNumber range

21 - Internal settlement500000 to 519999

31 - Order/project results analysis 520000 to 539999

41 - Overheads540000 to 559999

42 - Assessment560000 to 579999

43 - Internal activity allocation580000 to 599999

The secondary cost elements will be created with an interval of 100. E.g. Cost elements of category 21 will be 500100, 500200,500300 and so on.

Revenue and Cost Element Group

The following revenue and cost element grouping will be maintained. This will be first maintained in CCA and then will be copied to PCA.

KBL000Revenue and Cost element group

KBL100Sales

KBL101Sale of main products

KBL102Sale of services

KBL103Sale of spares

KBL200Other income

KBL201Income from investments

KBL202Miscellaneous receipts

KBL203Income from agriculture

KBL204Profit on sale of asset

KBL205Recovery of bad debts

KBL206Profit on sale of investments

KBL207Royalty received

KBL300Material cost

KBL301Cost of goods sold

KBL302Stores and spares consumed

KBL303Processing charges

KBL400Personnel related expenses

KBL401Salaries, wages & bonus

KBL402Payment under VRS

KBL403Contribution to PF & state insurance

KBL404Contribution to superannuation fund

KBL405Workmen & staff welfare expenses

KBL406Provision for gratuity

KBL500Brokerage and commission

KBL501Brokerage

KBL502Commission

KBL600General expenses

KBL601Power & fuel

KBL602Repairs to buildings

KBL603Repairs to machinery

KBL604Rent

KBL605Rates & taxes

KBL606Insurance

KBL607Excise duty paid

KBL608Travelling & conveyance

KBL609Advertising & publicity

KBL610Postage & telephone

KBL611Transportation

KBL612Lease rent

KBL613General Expenses

KBL614Donations

KBL615Directors fees

KBL616Directors travelling expenses

KBL617Directors remuneration

KBL618Managing directors remuneration

KBL619Bad debts written off

KBL620Royalties & fees

KBL621Agricultural expenses

KBL622Loss on sale / scrapping of fixed assets

KBL623Provision for doubtful debts / advances

KBL624Loss on sale of investments

KBL625Services Received from Press

KBL626Services Received from Head Office

KBL627Excess Provision

KBL700

Depreciation

KBL800

Interest Paid

KBL900

Cash Discount

KBL990Other secondary costs

KBL991Internal settlement

KBL992Order / project result analysis

KBL993Overheads

KBL994Assessment

KBL995Internal activity allocationThe following balance sheet group will be created for reporting of inventory, accounts receivable and accounts payable in PCA.

KBLBS Balance sheet accounts

KBLBS-INVInventory

KBLBS-ARAccounts receivable

KBLBS-APAccounts payable

Activity Types

Activity types will be used for service activity for service management module. The activity type names will be alphanumeric. Common activity types will be created for all product divisions. These are as follows:

CodeNameUnitCost Element

AT01HRUpto & Including SuperviosorsHour580100

AT01DYUpto & Including SuperviosorsDay580200

AT02HRAbove Superviosors, upto & incl. ManagersHour580300

AT02DYAbove Superviosors, upto & incl. ManagersDay580400

AT03HRAbove ManagersHour580500

AT03DYAbove ManagersDay580600

Statistical Key Figures (SKF)

SKFs will be created for each location to act as a base for assessment of common cost centre costs. The units of measures to be used are

% - Percentage

EA Each (number of people, sales value)

M2 - Sq. meter (floor space).

The SKFs name can be of 6 character alphanumeric. It will start with 2 digit location code used in cost centre numbering logic followed by four characters to reflect the purpose of SKF. The data in SKFs will be reviewed every quarter to incorporate changes, if any. Only actual SKFs will be maintained for first year and will be extended to plan data subsequently.

Refer Annexure 1 for flow chart on master data

General Ledger

TO-BE Document

For SAP R/3 Implementation at Kirloskar Brothers Limited

Date : 23rd Aug 2000

Sr. No of TO BE document FI001

AS-IS Business Process Name: General Ledger

Page no.: 10 to 18

Name of Business Process :

G/L Posting Standard

Module: FICOSub-module : GL

Flow Chart of Business Process : Annexure - 2

Detailed description of Business Process:

Requirement:

Generate accounting documents

Facility to display and change (limited extent) the accounting document

Facility to park the document and subsequent posting/cancellation of the parked document

Location specific document numbers to be generated internally

Facility for document entry with reference to predefined entries

Facility to account multi currency transactions.

Control facility at the time of data entry such as that particular user should enter only particular types of voucher

Process:

Every business transaction (journal vouchers, debit / credit advice, asset accounting, cash/bank, period end provisions ) not generated through any module of SAP will be accounted on the basis of manually prepared vouchers duly approved, checked by the appropriated personnel

Based on such vouchers, accountants will enter the data in the system using direct posting, account assignment model, fast entry or sample document facility

The appropriate document type will be used based on location

While entering he will check whether debit amount is equal to credit amount. In case it is not equal it will be corrected and will post the document.

In case user is not having authorization, he will park the document and senior user having authorization will post / cancel the parked document.

Gaps: Nil

Any reports required related to current business process : Yes

If Yes , whether required format of such report is attached: Yes Document Register based on document type, posting date, period etc.

Description of reports to be used i.e. purpose of such report:

This Report is used for the purpose of documentation and for facilitating the audit process and for the purpose of statutory compliance.

Any document/output would be printed for this business process: No

If Yes mention name of such document : Not ApplicableIf Yes, whether required format of document / output is attached: Not Applicable

Whether data records of current business process would be transferred to system other than SAP R/3: NoIf Yes, Describe in details and attach the format in which data would be stored in the other system : Not Applicable

Which hierarchy levels would be associated with this business process

( please mention about all scenarios ) :

Company code, Business Area, Cost Center

Inputs/ data received from other function for this process, ( if any ) : No

Output from this business process sent to other functions, ( if any ) : No

Sign-off (Approval) for this document :

Name of Team memberOrganization/Bus. UnitSignature

M M NaikKBL - Kirloskarvadi

S ShreekrishnanKBL - Dewas

V R KulkarniKBL - Pune Head Office

M R RajwadeKBL - Pune Projects

R R KitturKBL - Pune Area Office

TO-BE Document



Sr. No of TO BE document : FI002

AS-IS Business Process Name: General LedgerPage no.: 10 to 18


G/L Posting Offsetting

Module: FICOSub-module: GL

Flow Chart of Business Process : Nil


Requirement:

Generate accounting documents and clear the same with reference to open items

Facility to display and change (limited extent) the accounting document



Facility to account multi currency transactions

Control facility at the time of data entry such as that particular user should enter only particular types of voucher

Process:

Every business transaction not generated through any module of SAP will be accounted on the basis of manually prepared vouchers duly approved, checked by the appropriate personnel

Based on such vouchers, accountants will enter the data in the system using direct posting, account assignment model, fast entry or sample document facility

While entering the data, user will offset (clear) the transaction by selecting the open items

In case open item and the amount to be cleared is not equal, it can be treated as partial payment against particular open item or open item will be cleared with the payment amount and open item for balance amount (residual) will be created

While entering he will check whether debit amount is equal to credit amount. In case it is not equal it will be corrected and will post the document

In case user is not having authorization, he will park the document and senior user having authorization will post / cancel the parked document

Gaps: Nil


If Yes , whether required format of such report is attached: Yes Document Register based on document type, posting date, period etc.

Description of reports to be used i.e. purpose of such report:

This Report is used for the purpose of documentation and for facilitating the audit process and for the purpose of statutory compliance.


If Yes mention name of such document : Not Applicable

If Yes, whether required format of document / output is attached: Not Applicable




Company code, Business Area, Cost Center.










TO-BE Document




AS-IS Business Process Name: General LedgerPage no.: 10 to 18


G/L Planning ( Standard )

Module: FICOSub-module: GL



Requirement:

Budgeted financial data for each Segment / G/L account / on period basis i.e. monthly, quarterly, yearly.

Accumulate budget data from CCA module for expense accounts to FI module

Process:

Get information of plan data from all the concerned departments / cost centers at Company Code Level, Business Area Level, G/L Account Level and amount

Information for cost center will be for expense accounts only

Transfer all the expense after summing up for all the cost centers

Get information of plan data bifurcated into periods such as monthly / quarterly, etc.

Compare actual versus plan

Gaps: Nil

Any reports required related to current business process : YesIf Yes , whether required format of such report is attached: Yes Actual versus plan financial statements

Variance and percentage

Description of reports to be used i.e. purpose of such report: This Report is used for the purpose of decision making and management information.






Company code, Business Area, G/L account

Inputs/ data received from other function for this process, ( if any ) : Yes. The data is received from CO-CCA.









TO-BE Document


Date : 23rd August 2000


AS-IS Business Process Name: General Ledger

Page no.: 10 to 18


Manual Clearing (Standard)

Module: FICOSub-module : GL



Requirement:

System should facilitate scrutiny of General Ledger Accounts

Facility of clearing open items should be available

In case of part clearing, option of both partial and residual clearing should be available

Process:

Transaction in General Ledger will be verified with original vouchers and cleared against respective open line items

Gaps: Nil

Any reports required related to current business process : NoIf Yes , whether required format of such report is attached: NoDescription of reports to be used i.e. purpose of such report: Not Applicable






Company code, Business Area










Accounts Receivable

TO-BE Document


Date : 24th August 2000


AS-IS Business Process Name: Accounts ReceivablePage no.: 23 to 89


Customer Invoices (SD and SM Module Related)

Module: FICOSub-module : AR



Requirement:

User defined Age wise, payment terms wise, group wise, region wise classification of invoices/ balances.

Profit center wise bifurcation of balances appearing to the account of customer

Due date wise classification of dues from customers (Segment wise)

Customer account to display the different order wise unadjusted advances and particulars of pending Sales Tax declarations

Facility to view the customer balances as a whole together with all the branches

Customers debit notes if any will come to Accounts Department directly. Accounts Dept. will exercise control on Customers debit notes

Generate accounting Documents

Facility to Display and change(Limited extent) the accounting document


Automatic calculation of overdue interest, liquidated damages and cash discount

Tracking of forms

Maintenance of various registers mandatory as per Sales Tax Acts

Accounting in multiple currencies.

Report of Running Account (RA) Bills

Process:

After the billing process done in SD module, accounts department will verify the accounting documents generated on daily basis

Gaps: Nil

Any reports required related to current business process : YesIf Yes , whether required format of such report is attached: Yes Statement of account of the customer

Information to arrive at the amount of sales tax payable

Report on user defined Age wise, payment terms wise, group wise, region wise classification of invoices and credit notes on / to customers

Document Register based on document type, posting date, period etc.

Customer Trial Balance

Report of Running Account (RA) Bills

Description of reports to be used i.e. purpose of such report: This Report is used for the purpose of documentation, management information, for facilitating the audit process and for the purpose of statutory compliance.







Inputs/ data received from other function for this process, (if any): SD module will release invoice for accounting after all the processes of inquiry, order, despatch and billing.









TO-BE Document






Customer Invoices (FI Generated)




Requirement:

Facility to raise invoice for sale that does not pertain to products and which is not routed through SD module

User defined Age wise, payment terms wise, group wise, region wise classification of invoices and credit notes on / to customers and balances.

Profit center wise bifurcation of balances appearing to the account of customer

Due date wise classification of dues from customers

Customer account to display the different order wise unadjusted advances and particulars of pending Sales Tax declarations

Facility to view the customer balances as a whole including special G/L balances together with all the branches





Automatic calculation of cash discount

Process:

The requests to raise invoices will come to Accounts Dept. directly from concerned departments (e.g. sale of miscellaneous items like scrap etc.), complete in all respects.

Accounts Dept. will raise the invoice and account for

Accounts Dept. will receive the cheque / cash from the customer against the invoice and account for the same

In case user is not having authorization, he will park the document and senior user having authorization will post / cancel the parked document

Gaps: Nil

Any reports required related to current business process : YesIf Yes , whether required format of such report is attached: Yes Statement of account of the customer

Sales Invoice

Sales Tax register

Report on user defined Age wise, payment terms wise, group wise, region wise classification of invoices and credit notes on / to customers


Customer Trial balances







Company code, Business Area, Profit Center

Inputs/ data received from other function for this process, (if any): Nil

Output from this business process sent to other functions, ( if any ) : Nil








TO-BE Document






Customer Down Payment (Standard)




Requirement:

Accounting in multiple currency

Information regarding down payment received, such as sales order number, reference of commercial policy, details of earnest money deposit etc.

Down payments received from customers should be accounted to Special General Ledger Account

Provision for calculation and accounting of interest on down payments Information regarding bank guarantees given.

Process:

Down payments will be received from customers in accordance with the terms of sales order, commercial policy etc.

This will contain the name of the customer, nature of payment and information of tax deducted by the customer.

In case bank guarantees are given to the customer, it will be accounted as statistical information.

Based on this information, the down payment received from customer will be entered into books of accounts, net of TDS. Credit for TDS will be given to the customer only on receipt of TDS certificate before due date of filing our return

The system should generate money receipt while accounting such down payments.

Such vouchers will be entered into the books of accounts through location specific document type Bank / Cash Journal

Gaps: Nil

Any reports required related to current business process : NoIf Yes , whether required format of such report is attached: NADescription of reports to be used i.e. purpose of such report: NA

Any document/output would be printed for this business process: Yes

If Yes mention name of such document: Money Receipt.If Yes, whether required format of document / output is attached: Yes




Company code, Business Area, Profit Center.

Inputs/ data received from other function for this process, (if any): Down Payment Request

Output from this business process sent to other functions, (if any): Yes. Money receipts will be sent to the customer, pay in slip will be used for bank transactions, advices for interest will be mailed to customer.








TO-BE Document




AS-IS Business Process Name: Accounts Receivable

Page no.: 23 to 89


Manual Account Clearing (Customer)




Requirement:

System should facilitate scrutiny of customer Accounts.

Facility of clearing open items should be available.

In case of part clearing, option of both partial and residual clearing should be available.

Process:

Transaction in customer Ledger and Special General Ledger will be verified with original vouchers and cleared against respective open line items

Open items in customer ledger with be verified with each other and cleared against respective open line items

Gaps: Nil

Any reports required related to current business process : NoIf Yes , whether required format of such report is attached: NoDescription of reports to be used i.e. purpose of such report: N A

Any document/output would be printed for this business process: No If Yes mention name of such document : Not ApplicableIf Yes, whether required format of document / output is attached: Not Applicable














TO-BE Document





Page no.: 23 to 89

Name of Business Process : Manual Incoming Payments




Requirement:


Details of payment received, such as invoice number, date, amount, nature of deductions made and amounts deducted on each count, overdue interest paid etc.

Information regarding deduction of Income Tax

Payments received from customers should be accounted to their account in Accounts Receivable Ledger

Provision for clearing payments received from customers fully / partially / residually against open items in customers account

Provision for calculation and accounting of overdue interest and cash discount on down payments

Process:

Payments will be received from customers in accordance with the terms of sales order, commercial policy etc.

This will contain the name of the customer, details of payment, details of deductions made and amounts deducted on each count, overdue interest paid, information for deduction of tax at source etc.

Based on this information, the payment received from customer will be entered into system

The system should generate money receipt while accounting such down payments.


Payments received from customers will be cleared against open items in the customers accounts

Calculation and accounting of cash discount will be made at the time of accounting of payments received from customers.

Gaps: Nil

Any reports required related to current business process : YesIf Yes , whether required format of such report is attached: Yes

Statement of account of the customer.

Report on age wise classification of customers, due date-wise analysis of dues from customers, Profit center-wise information on dues from customers.


















TO-BE Document





Page no.: 23 to 89


Manual Outgoing Payments




Requirement:


Information regarding customers to whom payment is to be made

Payments made to customers should be accounted to their account in Accounts Receivable Ledger as well as to his account in Special General Ledger

Provision for clearing manual payments against open items in respective accounts

Process:

Payments will be made to customers in accordance with instructions received from appropriate authorities

This will contain the name of the customer, reason for payment.

Based on this information, FI should generate Remittance Letter through SAP R/3 system

Based on this information, cheque will be prepared in the name of the customer and payment made


Payments made to customers will be cleared against open items in his account in Accounts Receivable Ledger as well as in Special General Ledger, automatically either in full / part / residual

Gaps: Nil



Report on Age wise classification of customer, due date-wise analysis of dues from customers, Profit center-wise information on dues from customers.




If Yes mention name of such document : Remittance Letter

If Yes, whether required format of document / output is attached: Yes














TO-BE Document




AS-IS Business Process Name: Not in As-IS

Page no.:


Posting of parked documents ( Standard )


Flow Chart of Business Process : Annexure 4 & Annexure - 5


Requirement:

Facility to park the document and subsequent posting/change/display of the parked document.

Location specific document numbers to be generated internally.

Process:

In case user is not having authorization, he will park the document and senior user having authorization will post / change / cancel the parked document.

Gaps: Nil

Any reports required related to current business process : YesIf Yes , whether required format of such report is attached: Yes Statement of account of the customer.

Report on Agewise classification of customers, due date-wise analysis of dues from customers, cost center-wise information on dues from customers.


Description of reports to be used i.e. purpose of such report: This Report is used for the purpose of documentation, management information and for facilitating the audit process and for the purpose of statutory compliance.
















TO-BE Document





Page no.: 23 to 89


Customer Down Payment Clearing




Requirement:

Facility of clearing open items in customer Account with Special General Ledger Account

On clearing of open items in Special General Ledger Account with those in customer Account, the system should generate accounting entry with location specific document type.

Process:

Transaction in customer Ledger and Special General Ledger will be verified with original vouchers and cleared against respective open line items

Open items in customer ledger will be verified with each other and cleared against respective open line items

Down payments received from customers will be cleared against open items in the customers accounts as well as in accounts in Special General Ledger

Gaps: Nil

















TO-BE Document





Page no.: 23 to 89


Customer Credit Memo (FI Generated)




Requirement:

User defined Age wise, payment terms wise, group wise, region wise classification of invoices and credit notes on / to customers and balances.

Profit center wise bifurcation of balances appearing to the account of customer.

Due date wise classification of dues from customers.

Customer account to display the different order wise unadjusted advances and particulars of pending Sales Tax declarations.

Facility to view the customer balances as a whole together with all the branches including special G/L balances.

Customers debit notes if any will come to Accounts Department directly. Accounts Dept. will exercise control on Customers debit notes.



Facility to park the document and subsequent posting/cancellation of the parked document.


Automatic calculation of overdue interest, liquidated damages and cash discount.

Process:

Accounts Dept. will receive debit note from customer, if any.

After verification of the debit note, if it is observed that the customer has raised the debit note for excess amount, Accounts Dept. will raise a debit note on customer. In such case correct amount will be debited to Income Account, excess amount will be debited to the customers account and total amount of debit note will be credited to the customers account. If he has raised debit note for fewer amounts, the customers debit note will be passed for correct amount using location specific document type.


Gaps: Nil


If Yes , whether required format of such report is attached: Yes


Sales Tax register

Report on user defined Age wise, payment terms wise, group wise, region wise classification of invoices and credit notes on / to customers.









Inputs/ data received from other function for this process, (if any): Nil

Output from this business process sent to other functions, ( if any ) : Nil








Accounts Payable

TO-BE Document




AS-IS Business Process Name: Accounts Payable

Page no.: 91 to 97


Vendor Invoices

Module: FICOSub-module : AP



Requirement:

Accounting in multiple currency.

Invoice from vendor with complete details such as reference of purchase order, date, description of material, quantity, rate, discount, value, details of duties and taxes, terms of payment etc.

Open items in vendor account should appear.

Line items in vendor account should appear.

Age-wise classification of dues to vendors.

Due date-wise classification of dues to vendors.

Facility for two-way (i.e. without GRN) and three-way invoice verification.


Facility to Display and change (Limited extent) the accounting document

Facility to park the document and subsequent posting/cancellation of the parked document.


Process:

The invoices of vendors will come to accounting clerk and will be posted with reference to Purchase Order and GRN posted (if any) in MM module.

Sometimes FI also will receive invoices of vendors directly from them (e.g. supply of stationery etc. items).

Invoice verification activity will be done by FI only. Invoice verification will be two-way as well as three-way. Two-way means invoice verification without GRN. Three way means invoice verification with GRN. It will be accounted using location specific document types.

If on invoice verification it is observed that the vendor has raised the invoice for excess amount, a debit note will be raised on vendor. In such case correct amount will be debited to Inventory Account, excess amount will be debited to the vendors account and total invoice amount will be credited to the vendors account. If he has raised invoice for fewer amounts, the vendors invoice will be passed for correct amount.


Gaps: Nil


Statement of account of the vendor.

Information to arrive at the amount of Purchase set off available.

Report on Agewise classification of creditors, due date-wise analysis of dues to vendors, product group/ location wise payables.


Vendor Trial Balance.

Vendor wise purchases.




Whether data records of current business process would be transferred to system other than SAP R/3: NoIf Yes, Describe in details and attach the format in which data would be stored in the other system: Not Applicable




Inputs/ data received from other function for this process, ( if any ) : Purchase Order, GRN.









TO-BE Document





Page no.: 91 to 97


Vendor Credit Memo (Invoice related)




Requirement:


FI will exercise control on Vendor credit memo.

Facility for verification and adjustment against original invoice of the vendor.



Process:

Vendor Credit Memo with complete details (such as reference of Purchase Order, Date, Vendors Invoice, Description of material, Quantity, Rate, Discount, Reason for credit memo, details of duties and taxes) will come to Accounts Department, who will verify based on supporting and other documents available.

If on verification it is observed that the vendor has issued the credit memo for excess amount, a credit note will be issued to vendor. In such case total amount of credit memo will be debited to the vendor account, excess amount will be credited to the vendors account and balance amount will be credited to the respective Inventory/Expenses account. If he has issued the credit memo for lesser amounts, the vendors credit memo will be passed for correct amount using location specific document types.


Gaps: Nil

Any reports required related to current business process : YesIf Yes , whether required format of such report is attached: Yes Statement of account of the vendor.


Report on Age wise classification of creditors, due date wise analysis of dues to vendors, product-group/ location wise payables.





Whether data records of current business process would be transferred to system other than SAP R/3: NoIf Yes, Describe in details and attach the format in which data would be stored in the other system: Not Applicable




Inputs/ data received from other function for this process, ( if any ) : Purchase Order, GRN and vendor Credit Memo request from MM.









TO-BE Document





Page no.: 91 to 97


Vendor Down Payment (Standard)




Requirement:


Information regarding vendors to whom down payment is to be made.

Information regarding deduction of Income Tax.

Advances paid to vendors should be accounted to Special General Ledger Account.

Balances of vendor accounts in Reconciliation Account as well as Special General Ledger Account should be shown individually and also in totality.

Process:

Cashier will receive Payment request containing the name of the vendor, reason for payment and instructions for deduction of tax at source from Purchasing Department for Advances in accordance with Purchase order after duly verified by the appropriate authority.

Cashier will prepare the cheque and voucher on the basis of Payment Request. It will be verified and signed by the authorized personnel.

Accounting document will be posted in SAP R/3 for the Advance payment and FI will generate Remittance Letter through SAP R/3 system.

Such vouchers will be entered into the books of accounts through location specific document type Bank / Cash Journal . In case letter of credit, bank guarantee given, it will be accounted as statistical information.

Gaps: Nil

Any reports required related to current business process : NoIf Yes , whether required format of such report is attached: NA

Description of reports to be used i.e. purpose of such report: NA

Any document/output would be printed for this business process: YesIf Yes mention name of such document : Remittance Letter





Company code, Business Area, Profit Centre










TO-BE Document





Page no.: 91 to 97


Manual Clearing (Vendor)




Requirement:

System should facilitate scrutiny of Vendor Accounts.

Facility for clearing debit items against credit items and vice versa should be available.

In case of part clearing, option of both partial and residual clearing should be available.

Facility of clearing open items in Vendor Account with Special General Ledger open items.

On clearing of open items in Special General Ledger Account with those in Vendor Account, the system should generate necessary accounting document using location specific document type.

Provision for clearing at the time of entering manual payments against vendor invoices / credit notes.

Process:

Transaction in Vendor Ledger and Special General Ledger will be verified with original vouchers and cleared against respective open line items.

Gaps: Nil


Any document/output would be printed for this business process: No If Yes mention name of such document : Not Applicable















TO-BE Document





Page no.: 91 to 97


Vendor Invoice ( Standard ) (Direct FI Invoices)




Requirement:


Provision for two ways (i.e. without GRN) and three ways invoice verification.



Process:

Purchase orders will be created using MS-word and will not be entered in MM-purchasing.

The invoices of vendors will come to accounts department. (e.g. supply of stationery etc. items) with complete details such as reference of purchase order, date, description of material, quantity, rate, discount, value, details of duties and taxes, terms of payment etc.

Confirmation for receipt of material will also come to accounts department. Document confirming receipt of material / service with reference to Purchase / Sales Order against which the material is purchased and serial numbers of the products purchased.

Invoice and receipt document will be matched.

Accounts department will do invoice verification activity on the basis of available supporting documents such as purchase order, material receipt document.

If on invoice verification, it is observed that the vendor has raised the invoice for excess amount, a debit note will be raised on vendor. In such case correct amount will be debited to respective purchase account, excess amount will be debited to the vendors account and total invoice amount will be credited to the vendors account. If he has raised invoice for lesser amounts, the vendors invoice will be passed for correct amount through location specific document types.


Gaps: Nil



Report on Agewise classification of creditors, due datewise analysis of dues to vendors, cost centre wise information on dues to vendors.


















TO-BE Document





Page no.: 91 to 97


Vendor Credit Memo ( Standard ) (Direct FI related)




Requirement:


Document confirming approval to vendor credit memo from authorized officer.

Provision for verification and adjustment against original invoice of the vendor.



Process:

The credit memo of vendors with complete details (such as reference of purchase order, date, vendor invoice, date, description of material, quantity, rate, discount, value, reason for credit memo, details of duties and taxes, terms of payment etc.) will come to accounts department duly approved by appropriate authority with required supporting documents.

This credit memo will be verified with original invoice of the vendor and supporting as referred above.

After verification, the vendor credit memo will be accounted for in the System. If on verification it is observed that the vendors credit memo is for excess amount, a credit note will be issued to vendor. In such case correct amount will be debited to appropriate General Ledger Account, excess amount will be credited to the vendors account. If he has raised credit memo for lesser amount, the vendors credit memo will be passed for the amount stated in credit note and the debit note will be raised for the differential amount through location specific document types.


Gaps: Nil

Any reports required related to current business process : Yes Statement of account of the vendor.


Report on Agewise classification of creditors, due date-wise analysis of dues to vendors, product group / location wise, segment wise information on dues to vendors.


If Yes , whether required format of such report is attached: Yes


















TO-BE Document





Page no.: 91 to 97


Manual Outgoing Payments




Requirement:


Information regarding vendors to whom payment is to be made.

Information regarding deduction of Income Tax.

Payments made to vendors should be accounted to their account in Accounts Payable Ledger.

Process:

Payments will be made to vendors only on receipt of payment request containing name of the vendor, reason for payment and instructions for deduction of tax at source from Purchasing Department.

The Payments will be made to vendors in accordance with the terms of Payment as stated in Purchase Order.

Based on this information, cheque will be prepared in the name of the vendor.

Accounts Department will enter the above payment in the system specifying against which invoice (through location specific document type Bank / Cash Journal ) and Remittance Letter will be generated through SAP R/3 system.

Gaps: Nil


Statement of account of the vendor.

Report on Agewise classification of creditors, due date-wise analysis of dues to vendors, profit center-wise information on dues to vendors.




If Yes mention name of such document : Remittance LetterIf Yes, whether required format of document / output is attached: Yes














TO-BE Document




AS-IS Business Process Name: Not in As-Is

Page no.:


Posting of parked documents ( Standard )


Flow Chart of Business Process : Annexure 6 & Annexure 7


Requirement:

Facility to park the document and subsequent posting/change/display of the parked document as referred in Vendor invoices / credit memo process.


Process:

In case user is not having authorization, he will park the document and senior user having authorization will post / change / cancel the parked document.

Gaps: Nil


Report on Agewise classification of creditors, due datewise analysis of dues to vendors, cost centrewise information on dues to vendors.










Inputs/ data received from other function for this process, ( if any ) : Vendor invoice, Purchase Order, GRN and vendor Credit Memo from MM.









TO-BE Document





Page no.: 91 to 97


Vendor Down Payment (Clearing)




Requirement:

Provision for clearing down payments against vendor invoices.

Process:

Down payments made to vendors will be cleared after invoice verification activity.

Generate accounting documents using location specific document types.

Gaps: Nil

Any reports required related to current business process : NoIf Yes , whether required format of such report is attached: NADescription of reports to be used i.e. purpose of such report: NA

Any document/output would be printed for this business process: YesIf Yes mention name of such document : Remittance Letter





Company code, Business Area, Profit Centre.










Closing Operations

TO-BE Document


Date : 22rd August 2000


AS-IS Business Process Name: General Ledger Closing Operations

Page no.: 18


Foreign currency valuation (balances)

Module: FICOSub-module : GL Closing



Requirement:

Valuation of balances in foreign currency (G/L accounts) at the end of each quarter and creation of required accounting document

Process:

Foreign currency rates (buying, selling, average) for the purpose of valuation will be maintained at each quarter

Valuation of G/L balances and generating accounting document

Dr./Cr. Exchange difference account

Dr./Cr. Respective G/L account

Foreign currency - Nil, Local currency Difference amount

In case of debit balances (assets) it will be valued at buying rate and in case of credit balances (liabilities) it will be valued at selling rate

Gaps: Nil


Report showing the details of calculation

If Yes , whether required format of such report is attached: YesDescription of reports to be used i.e. purpose of such report: N A
















TO-BE Document




AS-IS Business Process Name: General Ledger Closing Operations

Page no.: 18


Foreign currency valuation Open items

Module: FICOSub-module : GL Closing



Requirement:

Valuation of open items in foreign currency (customer / Vendor) at the end of each quarter and creation of required accounting document

Exchange difference should be accounted in respective purchase / sale account

Process:

Foreign currency rates (buying and selling) for the purpose of valuation will be maintained at each quarter

Valuation of open items at quarter end date and generating accounting document

Dr./Cr. Respective Purchase / Sale account

Dr./Cr. Clearing account

This accounting document will be generated with posting date of end of the quarter

The aforesaid accounting document will be reversed on 1st of the next quarter

In case of debit balances (assets) it will be valued at buying rate and in case of credit balances (liabilities) it will be valued at selling rate

Gaps: Exchange difference will be accounted to exchange difference account instead of respective purchase / sale account

Any reports required related to current business process : Yes Report showing the details of calculation

If Yes , whether required format of such report is attached: YesDescription of reports to be used i.e. purpose of such report: N A

Any docu