WHAT IS ERP SYSTEMS (ENTERPRISE RESOURCE PLANNING)?

ERP stands for Enterprise Resource Planning.

ERP Systems support business or enterprise through the optimizing, planning, maintaining and tracking of
resources
ERP is gate way to integrate the data and processes of an organization into single system with all modules that
supports the core business areas.
Enterprise Resource Planning systems cover all basic functions of an organization
Enterprise Resource Planning is developing into a Multi-Module Application Software Package that automates
inter-organizational business processes across the supply chain which involves business partners, suppliers,
customers, and more.
History of ERP System
ERP System has taken years to emerge and is still evolving. These systems are transformation and ever-changing.
Before early ERP-type systems emerged, in the prehistoric age of 1960 and early 1970s Departmentalized
systems came into picture.
In 1970s manufacturing chain was the center of business operations. This led to the development of MRP
systems.
The second phase of ERP development occurred in 1980s which focused more on quality measures which led to
the evolution of MRP II Systems.
In the 1990s, Enterprise Resource Planning or ERP uses multi-module application software for improving the
performance of the internal business processes. ERP systems often integrates business activities across
functional departments, from product planning, parts purchasing, inventory control, product distribution,
fulfillment, to order tracking resources. This led to the evolution of ERP System.
The benefits of ERP systems are: customer satisfaction, better information, productivity, increased quality and
decreases in time to market, product cost, delivery time, inventory levels.
Major components of ERP Systems

Components of Manufacturing:Engineering, Bills of Material, Scheduling, Capacity, Workflow Management, Quality Control, Cost Management,
Manufacturing Process, Manufacturing Projects, Manufacturing Flow
Components of Supply Chain Management:Supply Chain Planning, Inventory, Purchasing, Order Entry, Product Configuration, Claim Processing, Supplier Scheduling,
Material Management
Components of Financials Resource Management:General Ledger, Cash Management, Accounts Payable, Accounts Receivable, Asset Management, Time and Expense,
Financial Reporting, projects
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Major Functional Components of Human Resources Management:Human Resources, Payroll, Training, Time & Attendance, Benefits
Customer Relationship Management Components:Sales and Marketing, Commissions, Service, Customer Contact and Call Center support
Advantages of Implementation of an ERP system:
Reduced redundancy in entering data
ERP system provides the real time information all needs of the organization in a single system.
ERP Allow everyone to access same source and share same source of information
ERP allow to access and update instantly
Integration among different functional areas to ensure proper communication, productivity and efficiency
The Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a granular level.
Allow standardization of business processes and enterprises information
Disadvantages of ERP System:The disadvantages of ERP system are as follows: Takes a lot of effort and time and requires a lot of training
Customization of the ERP software is limited. Some customization may involve changing of the ERP software
structure which is usually not allowed.
ERP systems can be very expensive to install.
ERP Systems centralize the data in one place and this can increase the risk of loss of sensitive information in the
event of a security violation.
ERP Software Packages
Baan
JD Edwards
Peoplesoft
SAP
Oracle Application
ABOUT SAP MODULES | SAP MODULES LIST OVERVIEW
SAP Modules overview: SAP stands for Systems, Applications and Products in data processing and it is the fourth
largest software company in the world. SAP provides end to end solutions for financials, manufacturing, logistics,
distribution etc. Each SAP module is integrated with other modules. SAP System divided in to two types of modules such
as functional modules and technical modules.
The important SAP modules used by organization are FICO (Financials and Controlling), MM (Materials Management), SD
(Sales & Distribution), HR (Human Resources), PP (Production Planning).
SAP Modules Integration

SAP Modules in R/3 SAP R/3 System is divided in to various modules, each module has its own business task.
Functional
Technical

Functional Modules Overview

SAP Module FI (Finance Accounting):- The following
are important sub-modules of Financial Accounting
General Ledger(GL)
Accounts Payable(AP)
Accounts Receivable(AR)
Bank and Cash Management
Budgeting and Monitoring
Withholding Tax (TDS)
Asset Accounting(AA)
Funds Management(FM)
Treasury Management(TM)
SAP Module CO (Controlling):- The important submodules of controlling are as follows
Product Costing(CO-PC)
Periodic Allocations
Profitability Analysis(CO-PA)
Cost Center Accounting(CCA)
Profit Center Accounting(PCA)
SAP Module SD (Sales and Distribution): Sales Order Processing and Monitoring
Shipping
Bill / Invoice Generation
Credit Management
Bill of Material
Pricing and Discounts
Statutory Requirements
SAP Module HR
Organizational Management
Personnel Administration
Recruitment Time Management
Management Personnel Cost
Planning Budget
Payroll Benefits Compensation
Management Personnel

Development Training & Event Management

Travel Management
SAP Module PP (Production Planning)
Production Planning
Production Order Processing
Demand Management (DM)
Materials Requirements Planning (MRP)
Shop Floor Control
Capacity Requirements Planning (CRP)
Information System
SAP Module MM (Materials Management)
Purchasing
Inventory Management
Inventory Valuation
Vendor Evaluation and Rating
Invoice Verification
Statutory Requirements
SAP Module QM (Quality Management)
Incoming Inspection
Process Inspection
Final/Delivery Inspections
Quality Reports / Certificates
Quality Notifications
SAP Module PM (Plant Maintenance)
Maintenance Planning
Breakdown Maintenance
Preventive Maintenance
Predictive Maintenance
SAP Module PS (Project Systems)
Project Planning
Project Monitoring
Project Costing
Milestone based Billing
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Handling of WBS Elements

SAP Module Supply Chain Management

Technical Modules Overview
Netweaver

ABAP
- Advanced
Business
Application
Programming
IS (Information Systems) Management
XI Exchange Infrastructure
SAP Basis
BIW Business Information Warehousing+

WHAT IS SAP MM?

SAP MM (Material Management) is one of the important modules in SAP ERP software and MM application module
supports the procurement and inventory functions occurring in day-to-day business operations. This MM module
contains many aspects such as purchasing, goods receiving, material storage, consumption-based planning, and
inventory. SAP MM module is fully integrated with other modules in the SAP R/3 System such as Finance (FI),
Controlling (CO), Sales and Distribution (SD), Quality Management (QM), Plant Maintenance (PM), Production Planning
(PP), and Warehouse Management(WM).
It supports all phases of materials management materials planning and control, purchasing, goods receiving, inventory
management, and invoice verification.
Organizational Structure
Plant
Valuation area
Storage locations

SAP MM Sub Modules Material Planning

Purchasing
Inventory Management

Purchasing organizations
Purchasing groups

Vendor Valuation
Invoice Verification
Statutory Requirements

Procurement Process
One of the important processes in SAP MM module is Purchasing/Procurement. The purchasing process is initially
started when there is a requirement of material/service for the organization. If the material/service cannot be obtained
from companys internal resource, the responsible person of that company must find the vendor/supplier which can
provide it on the required date. The purchasing process is Started with creation of Purchase Requisition (PR), Purchase
Order (PO), Good Receipt/Services, Invoice Verification, Payment to vendors.

SAP SPRO
Menu path for IMG:Implementation Management Guide (IMG) menu is used for customization settings for all modules in SAP R/3.
Transaction code SAP SPRO (SAP project Reference Object) is used to configure the system as per the client
requirements.
Transaction code: - SPRO
Menu Path: - SAP Menu > Tools > Customizing > IMG > SPRO Execute Project

SAP SPRO Execute Project > SAP Enterprise Structure

DEFINE COMPANY IN SAP
About Company in SAP: - Company is the organizational unit for which individual financial statements can be drawn
according to the relevant commercial law. A company can comprise of one or more company codes. A Company has
local currencies in which its transactions are recorded. All company codes within a company must use the same
transaction Chart of accounts and the same Fiscal Year. Creation of company in sap is optional.
Path to Define Company in SAP:SAP IMG Path: SPRO > Implementation Guide for R/3 Customizing (IMG) > Enterprise Structure > Definition >
Financial Accounting > Define Company
Transaction code to Define Company in SAP:- OX15
Steps for creation of Company:
Step 1:- Enter Transaction Code SPRO in the commend field and press enter on the Keyboard

Step 2:- Next Customizing execute project screen select SAP Reference IMG

Step 3:- After Selecting SAP Reference IMG, a new screen IMG Path will be displayed. Select Define Company execute
icon for creating a company

Next Screen will be displayed after selecting the define company execute icon

Step 4:- Now select new entries icon and enter the company details

The following details are to be entered for creating a new company

1. Enter 6 character alphanumeric code key that represents the group of company
2. Enter name of your company
3. In the Detailed information update the address Street name, PO Box#, Postal code, City.
4. Enter Country Code of the company
5. Enter language key
6. Enter local currency for the company (also known as Company code currency)
7. Click on Save icon or CTRL+S after updating the required information
Thus new Company ADARSH is created in SAP.
DEFINE COMPANY CODE
About Company Code: - Company Code in SAP is the smallest organizational unit of Financial Accounting for which you
draw individual financial statements like Balance Sheet and Profit & Loss Account for purpose of external reporting. The
Creation of company code in sap is mandatory
PATH: - IMG Reference > Enterprise Structure > Definition > Financial Accounting > Edit, Copy, Delete Company Code
Transaction code to Define company Code: - OX02
Steps to Define Company Code: Step 1:- Enter Transaction Code SPRO in the commend field and press enter

Steps 2:- In customizing execute project screen select SAP Reference IMG

Step 3:- In next screen select Edit, Copy, Delete check Company Code

Step 4:- The below screen displays after selecting Edit, Copy, Delete Company Code (Define Company Code)

We can create company code by selecting above two options. By selecting first option copy, Delete, company code all
the configuration and tables get copied automatically along with assignments.
Here we are creating company code manually configure all the assignments by selecting second option Edit Company
Code Data. Double click on Edit Company Code Data

Step 5:- Click on New Entries

and update the following details

1. Update new Company code key AD06

2. Give the company name Adarsh Technologies for identifying the company code key
3. In Additional Data update the details of City, Country, local Currency of company, Language.
Click on Address and Update the following fields

After updating Address enter Click on Save icon

Thus the company code AD06 is created in SAP.

ASSIGN COMPANY CODE TO COMPANY

Menu Path:SPRO > IMG Reference > Enterprise Structure > Assignment > Financial Accounting > Assign Company Code to
Company
Transaction Code: - OX16
The following are the steps to Assign the Company Code to Company in SAP FICO
Step 1:- Enter the T-Code SPRO in the commend field
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Step 2 :- Click SAP Reference IMG

Step 3:- Follow the Path as per below screen shot

Step 4:- Click Position

Update company code for which you wants to assign and Enter

Step 5:- Update Company ID in Company field and click on save icon

Thus company code AD06 was assigned to Company ADARSH.

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DEFINE PLANT
Steps to Define Plant:IMG Menu Path:SPRO > SAP Customizing Implementation Guide (IMG) > Enterprise Structure > Definition > Logistics General > Define
copy, delete, check plant
Transaction Code to Define Plant: - OX10
Step 1:- Enter Transaction Code SPRO in the command field and press enter

Step 2:- Click on SAP Reference IMG

Step 3:- Follow the Menu Path as per below screen shot

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Step 4:- Click on Define Plant

Step 5 :- Click on New Entries

Step 6:- Enter new plant code and update the name of the Plant and press enter

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Step 7:- Update the address of the plant and press enter

Step 8 :- After updating all mandatory fields click on save icon

Thus Plant was successfully configured in SAP

ASSIGN PLANT TO COMPANY CODE
Assign Plant to Company Code configuration steps:Transaction code Assign Plant to Company Code: - OX18
IMG Menu Path: - SPRO > SAP Customizing Implementation Guide (IMG) > Enterprise Structure > Assignment > Logistics
General >Assign Plant to Company Code
Step 1:- Enter Transaction Code SPRO in the command field and press enter
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Step 2 :- Click on SAP Reference IMG

Step 3 :- Follow the Menu Path as per below screen shot

Step 4 :- Click on New entries

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Step 5:- Update Company code in cocd field, and update plant code in plant field and press enter

Step 6 :- Click on save icon

Thus Plant is successfully assigned to Company code.

HOW TO CREATE STORAGE LOCATION IN SAP MM
Steps to create storage location in SAP
Transaction code: - OX09
IMG Menu Path: - SPRO> SAP Customizing Implementation Guide >Enterprise Structure Definition > Material
Management > Maintain storage Location
Step 1:- Enter Transaction Code SPRO in the command field and press enter

Step 2: - Click on SAP Reference IMG

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Step 3:- Follow the menu path as per below screen shot and click on maintain storage location

Step 4:- Enter the Plant key where the storage location is to be maintained and press enter

Step 5:- Click on new entries for creation new storage location

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Step 6:- Enter Key in Sloc and description of storage location

Step 7 :- Select storage locations and double click on address of storage locations
Step 8:- After double click on address of storage locations, click on new entries and give 1 in NO field.

Step 9:- Update the address of the storage locations

After updating address click on save icon. Thus new storage locations are configured.
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HOW TO MAINTAIN PURCHASING ORGANISATION IN SAP MM

Create Purchasing Organization in SAP Step by Step
IMG Menu Path: - Customizing Implementation Guide > Enterprise Structure > Definition > Material Management >
Maintain > Maintain Purchasing Organization
T Code for Maintain Purchasing Organization: - OX08
Step 1:- Enter T Code SPRO in the SAP Command Field
Step 2:- Click on SAP Reference IMG

Step 3:- Follow the menu path as per below screen shot for creating new purchase organisation

Step 4:- Click on new entries

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Step 5:- Update the following data and press enter

Purch. Organisation: - Enter 4 digits Key that identifying the purchase organization
Purch. Org. descr. :- Update the description of the purchase organization
Step 6 :- Click on save icon

Thus Purchasing Organization is successfully configured in SAP Material Management

HOW TO CREATE PURCHASING GROUPS IN SAP
The following tutorial guides how to create purchasing groups in SAP MM step by step.
A purchasing group is a unit of a purchasing organization which is responsible for day to day certain buying activities and
control a particular type of procurement activity based on some classification.
Steps to create purchasing groups
SAP IMG Path: - SPRO >> SAP Reference IMG(F5) >>Materials Management >> Purchasing >> Create Purchasing Groups
Transaction code: OME4

Click on new entries to create new purchasing groups

In next screen enter the following data.

In the purchasing group field enter the three digits purch. group key
In the desc. pur. grp field enter the description of purchasing group
Enter the telephone contact details and press enter to continue

After updating all the required information, choose save icon to save the entries. Successfully you have configured
purchasing groups.
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ASSIGN PURCHASE ORGANIZATION TO COMPANY CODE

Steps to Assign Purchase Organization to Company Code:IMG Menu Path:SPRO > SAP Customizing Implementation Guide (IMG) > Enterprise Structure > Assignment > Material Management
> Assign Purchase Organization to Company Code
T Code Assign Purchase Organization to Company Code: - OX01
Step 1:- Enter transaction code SPRO in the command field and press enter

Step 2:- Click on SAP Reference IMG

Step 3 :- Follow the IMG Menu Path and click on Assign Purchasing Organisation to Company Code

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Step 4:- Click on Position and update the desired purchase organization code to find out

Step 5:- Update the company code in the CoCd field and press enter

Step 6 :- Click on Save icon

Thus successfully purchase organization is assigned to company code.
ASSIGN PURCHASE ORGANISATION TO PLANT IN SAP
Steps for Assign purchase organization to Plant
IMG Path:SPRO > SAP Customizing Implementation Guide (IMG) > Enterprise Structure > Assignment > Material Management
> Assign Purchase Organization to Plant
T Code for Assign purchase organization to Plant: - OX17
Step 1:- Enter T Code SPRO in the command field and Press Enter on the Key Board
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Step 2:- Click on SAP Reference IMG

Step 3:- Follow the menu path as per below screen shot for Assign Purchase Organization to Plant

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Step 4:- Click on new entries

Step 5 :- Update the following data and press enter

POrg: - Update Purchase organization that you want to assign to pant

Plnt :- Update the Plant key
Step 6:- Click on save icon
Thus successfully Purchase Organization is assigned to Plant

HOW TO CREATE VENDOR ACCOUNT GROUPS IN SAP

Let configure the below vendor account groups
Group
Name
A001

Domestic Vendors

A002

Import Vendors

A003

One Time Vendors

Steps to create vendor account groups:IMG Menu Path: - IMG > Financial accounting > Accounts Receivable and Accounts Payable > Vendor Accounts
>Master data > preparation for creating vendor master data > Define Account Groups with Screen Layout (Vendors)
Transaction code: - OBD3
Step 1:- Enter Transaction code SPRO in the SAP command field and press enter

Step 2:- Select SAP Reference IMG

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Step 3:- Follow IMG Menu Path and select Define Account Groups with Screen Layout (Vendor)

Step 4:- Select New entries to create new vendor account group

Step 5:- Update the following data

Account Group: - Enter four digits Vendor Account group code
Description: - Enter the name of Vendor account group.

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Select Company code data under field status and select Account management under group,

Select Reconciliation account as required entry

Step 6:- Select Save Icon to save the configured settings

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Similarly create Vendor account groups for A002, A003.

Thus Vendor account groups are successfully configured in SAP.

HOW TO CREATE NUMBER RANGES FOR VENDOR ACCOUNTS

This tutorial guides you how to Create Number Ranges for Vendor Accounts
Steps to Create Number Ranges for Vendor Accounts
IMG Menu Path: - IMG > Financial accounting > Accounts Receivable and Accounts Payable > Vendor Accounts >
Master data > Preparation for creating vendor master data > Create number ranges for vendor account
Transaction Code: - XKN1
Step 1:- Enter TCode SPRO in the command field and press enter

Step 2:- Select SAP Reference IMG

Step 3:- Follow IMG Menu path to Create Number Ranges for Vendor Account

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Step 4:- Select Change interval for creating number ranges for Vendor accounts

Step 5 :- Select Insert Interval

Step 6:- Update the following information and Enter

1. NO: - Enter NO that you want to identify the vendor accounts number range
2. From Number: - Enter from number of vendor number range
3. To number: - Enter to number of vendor number range
4 .Ext:- Select EXT box if you want External numbering

Step 7:- Select Save and ignore the warning message press enter.

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ASSIGN NUMBER RANGES TO VENDOR ACCOUNT GROUPS

This tutorial guides you Assign Number Ranges to Vendor Account Groups in SAP FI
Steps for Assign Number Ranges to Vendor Account Groups
IMG Menu path :- Implementation Guide for R/3 Customizing (IMG) -> Financial Accounting -> Accounts Receivable and
Accounts Payable -> Vendor Accounts -> Master Data -> Assign Number Ranges to Vendor Account Groups
Transaction Code: - XKN1
Step 1:- Enter transaction Code SPRO in the SAP command field and press enter

Step 2:- Select SAP Reference IMG

Step 3:- Follow the IMG menu path

Step 4:- Select Position

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Update vendor account group that you to assign number ranges and press enter

Step 5:- Update Number range key in the number range field

Step 6:- Click on save icon to save configured setting

Thus Number range is successfully assigned to vendor account groups

HOW TO CREATE VENDOR CODE IN SAP XK01

The following tutorial guides you how to create vendor code in SAP step by step with screen shots.
SAP Menu Path: - SAP Menu >> Logistics >> Material Management >> Purchasing >> Master Data >> Vendor >> Central
Transaction code: XK01
Enter transaction code XK01 in the sap command field and press enter

Enter the following data

1. Company code: - Enter company code
2. Purchasing Organization: - Enter Purchasing Organization
3. Account group: Enter account group

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Press enter to input the details of the vendor

Title: - Select Company, Dr., Mr., Ms.
Name: Enter the name of the vendor
Search: - enter the search term
Street Address: - Enter the street #, postal code city, Country, Region, City
Language: - Enter the language

Enter the VAT Reg No of the vendor

Enter the bank details of the vendor

Account data: - Enter the appropriate Reconciliation accounts, sort key

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Payment transactions:1. Enter the appropriate payment terms

2. Select the Chk double inv.
3. Enter the appropriate payment methods such as cheque payment, Bank transfer, Online transfer

Purchasing Organization Data:1. Enter the order currency, terms of payment and incoterms.
2. Enter the appropriate schema group, vendor
3. Select GR-based Inv. Verification if invoice verification is done after GR
4. Select Srv. Based inv. verf if invoice verification after service entry
5. Enter the partners for the appropriate partner functions
Press save icon to save the vendor master and vendor code in SAP is automatically generated. The vendor code is
generated for respective purchasing organization and company code.

PROCUREMENT PROCESS CYCLE | PROCURE TO PAY PROCESS

Procurement Process: - Every organization that operates a business has to purchase materials such as raw materials,
services etc. The procurement process has become part of todays efficient business operation. The Company can
procure those materials as in-house production or external procurement.
Procurement Process Cycle
Procurement Process consists of the following processes
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1. Material requirement planning

6. Goods Receipt
2. Vendor Selection
7. Goods Receipt Invoice
3. Request for Quotation
8. Invoice Verification
4. Purchase Requisition
9. Payment to Vendors
5. Purchase Order
1. Material requirement planning (MRP):Materials requirements planning (MRP) refers to the technique of using a projected manufacturing production
schedule to figure out what supplied materials you will need, and when you will need them. Materials requirements
planning (MRP) type controls the MRP procedure, pricing and material valuation. Material requirement planning carried
out by MRP controller in production department.
2. Vendor selection:Vendor selection is one of the important steps in procurement process. With the help of obtained quotations from
sources and by comparing them, vendors are selected
3. Request for Quotation:Requesting potential vendors to submit a quotation for a material or services. Quotation contains the vendors terms
and conditions and constitutes the basis for vendor selection
4. Purchase Requisition:A purchase requisition is an internal request to purchasing. You ask the buyer to provide a certain quantity of a material
or service on a certain date. A purchase requisition can be created automatically by Material Requirement Planning
(MRP) or manually created. PR converts to RFQ, PO or outline agreement. Purchase Requisition forms include the
following information
Material Qty, description of goods & service and total value.
Department Account number.
Signature by an Authorized Department.
Attached Quote from the vendor.
Delivery instructions.
Attach Quote from the suggested vendor.
5. Purchase Order:Purchase Order (PO) is a formal request to a vendor to supply certain materials or services under the certain conditions.
A Purchase Order (PO) can be created with reference, or without reference to a purchase requisition, a request for
quotation, or another purchase order.
POs usually specify terms of payment, incoterms, delivery date, specifications, material qty, price and reference or part
numbers.
Types of purchase orders in procurement process: - Standard PO, Planned PO, Contract PO.
6. Goods Receipt:Goods Receipts (GR) is created to reflect the Goods Receipts for the specified material ordered from a vendor using
Purchase Order process. After receiving the goods the company can record the following information, this information
can be used for accounting, stock check and rotation, to return any goods if there is a problem
What goods were delivered,
Which vendor delivered the goods?
Who, how, when goods were delivered and received the goods.
7. Goods Receipt Invoice (GRIN):Goods receipt process is one of the important processes in procurement process cycle. It is matching the goods that a
company receives with the company PO (purchase order). It involves checking the goods are not damaged and fit for
use, verifying the price, quantity, and payment terms. Goods movement are entered in to the system with reference of
Purchase order and goods receipt material documents are posted, automatically appropriate general ledgers are posted
and stock accounts are updated.
8. Invoice Verification:After GRIN process, next process is invoice verification. It plays an important role in procurement process and Materials
Management Module which performs the following tasks
A Vendor Invoice can be created with reference to a Purchase Order, a Goods Receipt, a Delivery Note.
Invoice is verified in-terms of prices, quantity,
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 Necessary approvals by project managers

After verifying all the data, the invoice is posted and the data is saved in the system. The system updates the invoice
data in Materials Management and Financial Accounting.
9. Payment to Vendors:The last step in procurement process cycle is payment to vendors. Vendors are get paid as per payment terms. In this
fast technology world, companies can pay through many methods to vendors. For example through Net banking, check
payment etc

TAX CHECK CALCULATION PROCEDURE SAP

Check Calculation Procedure SAP
The following tutorials guides you how to check calculation procedure in SAP step by step
IMG Path: - SPRO > IMG > Financial Accounting > Financial Accounting Global Settings > Tax on Sales/Purchases > Basic
Settings > Check Calculation Procedure
The standard system comes with two tax calculation procedures.
TAXINN Condition Based
TAXINJ Formula Based
TAXINN: - TAXINN supports only condition based excise determination
TAXINJ: - TAXINJ support the condition based and as well as formula based excise determination
The difference between TAXINN and TAXINJ procedure is, TAXINN is a condition based and we have to maintain
condition records for each condition type and TAXINJ is a formula based for which we maintain a tax code by using FTXP
Tax calculation procedure configuration process: - Tax procedure can be defined by coping existing procedure or by
defining new entries
Select Define procedure

Select TAXINJ and click on copy as icon,

Update your new tax procedure key and press enter
Then select copy all, all the entries from TAXINJ copied to new tax procedure TAXADE

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Select Tax procedure and double click on control data

Next control data overview screen, check all condition type, add new conditional as per company requirement

Click on save icon to save the configured data. Successfully you defined new procedure.
DEFINE NEW CONDITION TYPES FOR TAXES
Condition types for Taxes
Standard SAP provides you condition types which are defined in the SAP System. You can create new customized
condition types as per your business requirements.
SAP IMG Path: - SPRO > SAP Reference IMG (F5) > Financial Accounting > Financial Accounting Global Settings > Tax on
Sales/Purchases > Basic Settings > Check Calculation Procedure > Define Condition types
Transaction Code: OBYZ
Step 1: Click on condition type

Next change view condition: condition types overview screen, click on new entries to define new condition types

Step 2: Enter the following fields

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Maintain the condition class

Maintain the calculation type
Maintain access sequence for the tax condition type
Select the condition category
Select the group condition if it is applicable
Update the fields Changes which can be made

After maintain the data, click on save icon to save the configured data. Successfully you defined new condition types for
taxes.
Similarly create new condition types for CST, VAT, Service taxes, Excise duties etc. After creating new condition types,
assign to tax procedure.
Click on define procedures and in next screen select tax procedure and double click on control data.

Choose New entries and update the following fields.

1. Enter step number
2. Enter condition type key
3. Enter the from number (tax to be calculate from step#)
4. Select account key (input tax, output tax etc.)
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Choose save icon to save the configured data.

HOW TO ASSIGN COUNTRY TO CALCULATION PROCEDURE
The following tutorials guide you How to Assign Country to Calculation Procedure in SAP step by step
IMG Path: - SPRO > IMG > Financial Accounting > Financial Accounting Global Settings > Tax on Sales/Purchases > Basic
Settings > Assign Country to Calculation Procedure
Transaction code: - OBBG
After defining Calculation Procedure, next steps assigning country to calculation procedure
>> Select position and update country key

Update tax procedure key in the procedure field and press enter

Click on the save icon to save the data, successfully country assigned to calculation procedure.
HOW TO CREATE TAX CODES IN SAP FTXP
The following tutorials guides you how to create tax code step by step in SAP. We are creating output tax VAT 5%.
Create new tax code by using the following methods
SAP IMG Path: SPRO > SAP Reference IMG (F5) > Financial Accounting > Financial Accounting Global Settings > Tax on
sales/purchase
>
Calculation
>
Define
tax
codes
for
sales
and
purchases
Transaction Code: FTXP

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Step 1: A pop up screen will be open asking for country key that you are configuring for. Enter country key and press
enter to continue

Step 2: Enter new tax code in the tax code field and enter

Step 3: Update the following data.

1. Update the description of tax code
2. Enter tax type i.e. V is for Input Tax and A is for output tax

Step 4: Enter tax rate in the tax.percent.rate field

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Choose save icon to save the data. A message will be displayed as Tax code was created

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