Maini - Blueprint - Fi - 100 - Main Document - Ver - 3.0 PDF

Unisoft Infotech Pvt Ltd.
mySAP ECC Ver 6.0 Implementation
At
Maini Precision Products Pvt. Ltd.
Business Blue Print

Finance & Asset Accounting
Prepared by
R.Ramakrishnaraj
Business Process Blueprint
Sign Off Document

Project Name Lotus Document Version No 3.0
Process Owner Mr. karthik krishnan Document Version Date 18/03/09
Key User Mrs. Mary Joyce Martis
Consultant R.Ramakrishnaraj Preparation Date 18/03/09
Reviewed By Deepak Goenka Review Date 18/03/09
Document Tracking
Revision Version date Revised by Change Description
1.0 08/01/09 Srinivasa Rao.U First release
2.0 03/02/09 Deepak Goenka Second Release
3.0 18/03/09 R.Ramakrishnaraj Third Release
Name
The following acknowledges the acceptance of Business Blueprint of mySAP ECC 6.0
Implementation Project developed in agreement between Unisoft Infotech Pvt Ltd and
Maini Precision Products Pvt Ltd.
Reference
This acceptance is in accordance with the terms and conditions expressed in Unisoft
Proposal to Maini Precision Products Private Limited.
Work Accepted
Business Blue Print Document for Project Systems with the file name:
MAINI_BLUEPRINT_FI_100_MAIN DOCUMENT_VER_3.0.DOC
Finance & Asset Accounting Version 3.0

Confidential Page 2 of 69
Acceptance
In witness thereof, the parties, in signing this acceptance, have agreed that Unisoft
Infotech has successfully completed the Business Blueprint and has met all the
deliverables as mentioned in the contract.
Name Title, Department Date Signature
Mr. karthik krishnan Process Owner
Mrs.Mary Joyce Martis Key User- FI
Mr. R.Ramakrishnaraj Application Consultant
Mr. Anandapadmanaban.N Project Manager

1 Introduction...............................................................................................................................................8
1.1 Purpose of this document ..................................................................................................................8
1.2 Who should read this document ........................................................................................................8
1.3 Document Derivation .........................................................................................................................8
2 Organisation Structure ............................................................................................................................9

2.1 Plant / Profit Centres........................................................................................................................10
2.2 AS-IS Process Vs TO BE SAP Process ..........................................................................................11
3 FI Business Process Master List ..........................................................................................................12

3.1 General Ledger: Standard Transactions ........................................................................................12
3.2 Accounts Payable ..........................................................................................................................122
3.3 Accounts Receivable .....................................................................................................................122
3.4 Bank Accounting ............................................................................................................................133
3.5 Asset Accounting .............................................................................................................................13
3.6 Taxation (CIN - Country India Version) .........................................................................................133
3.6.1 Cenvat……………………………………………………………………………………………….............13
3.6.2 VAT/ Sales Taxes……………………………………………………………………………………………13
3.6.3 Service Tax…..…………………………….…………………………………………………………………14
3.6.4 Custom Duty & CVD……… …………………………………………………………………………………14
3.6.5 Withholding Tax (TDS & TCS)…………..…………………………………………………………………..14
4 SAP Overview .......................................................................................................................................155

4.1 Client ..............................................................................................................................................155
4.2 Company........................................................................................................................................155
4.3 Company Code ................................................................................................................................15
4.4 Controlling Area ...............................................................................................................................15
4.5 Fiscal Year and posting periods ......................................................................................................16
4.6 Documents & Document Types .....................................................................................................166
4.6.1 Document Number Ranges……………………………………………………………….………………18
4.7 Account Groups .............................................................................................................................199
4.8 Financial Statements .....................................................................................................................199
4.8.1 Trail Balance………………………………………………………………………………………………….19
4.8.2 Balance Sheet and Profit & Loss Account………………………………………………………………….19

4.9 Sub-ledgers & sub-modules in Financial Accounting ......................................................................20
4.10 Special Organizational Considerations............................................................................................20
5 General Ledger Processes Mapping ..................................................................................................211

5.1 General Ledger Postings ...............................................................................................................211

5.2 Cash Management.......................................................................................................................232
5.3 Closing Operation in SAP ……………………………………………………………......23
6 Accounts Payable.................................................................................................................................244
6.1 Vendor Master Records ...................................................................................................................255
6.1.1 Vendor Structure…...………………………………………………………………………………………..25
6.1.2 Vendor Account Group………………………………………………………………………………..…….25

6.2 Vendor Bill Booking ..........................................................................................................................266
6.2.1 Vendor -Automatic Accounting Document………………………………………………………………..26
6.2.2 Receipt of Material from Vendor against PO……………………………………………………………..26
6.2.3 Vendor Invoice against PO for services………………………………………………………………………….27
6.2.4 Vendor Invoice Verification…………………………………………………………………………………………….27
6.2.5 Vendor Invoice Reversing ………………………………………………………………………………………………29

6.3 Vendor Invoice With out PO……………………………………………………………………………………………30
6.4 Vendor Down payment process.......................................................................................................30
6.5 Vendor Payments ............................................................................................................................33
6.5.1 Payment by Cheque………………………………………………………………………………………..31
6.5.2 EDI Payment Method..……………………………………………………………………………………..35
6.5.3 Methods of Payment to Vendor…………………………………………………………………………...36

6.6 Employee vendors ........................................................................................................................377
6.7 Vendors Account
Clearing………………………………………………………………………………...377
6.8 Vendors Correspondence..............................................................................................................377
6.9 Special organization consideration……………………………………………………………………….….37
7 Accounts Receivables .........................................................................................................................388

7.1 Customer Master Records.............................................................................................................388
7.1.1 Customer Master Structure……………………………………………………………………………….38
7.1.2 Account Group……………………………………………………………………………………………..38
7.1.3 Customer -One Time Accounts…………………………………………………………………………….39

7.1.4 Customer Reconciliation Account………………………………………………………………………....39
7.1.5 Customer Number Range Interval ………………………………………………………………………..39
7.1.6 Debtor – Creditor Adjustment………………………………………………………………………………..39

7.2 Debtor Ageing Analysis Report........................................................................................................40

7.3 Debtor Account Balance ..................................................................................................................40

7.4 Debtor Receivable ...........................................................................................................................40
7.4.1 Domestic Customers – As-Is……………………………………………………………………………..40
7.4.2 Foreign Customers (Forward Contracts) – As-Is………………………………………………………..40
7.4.3 Accounts Receivables – Domestic – To-Be …………………………………………………………….41
7.4.4 Foreign Customer Realization Process – To-Be…………………………………………………………42

7.5 Bills crystallization..........................................................................................................................444
7.6 Customer down Payments.............................................................................................................444
7.7 Customer Credit / Debit Memo ......................................................................................................455
7.8 Customer Account Analysis...........................................................................................................455
7.9 Customer Account Clearing...........................................................................................................455
8 Bank Accounting ..........................................................................................................................465

8.1 Outgoing Payments. .......................................................................................................................46
8.1.1 Cheque Management..……………………………………………………………………………………..46

8.1.2 Cheque Management Process Flow Diagram….…………………………………………………..……46
8.2 Bank Reconciliation .........................................................................................................................47
8.2.1 Cheque Received from customer…………………………………………………………………………47
8.2.2 Cheques issued to vendors………………………………………………………………………………..47
8.2.3 Direct Debit in Bank ………………………………………………………………………………………..48
8.2.4 Direct Credit in Bank………………………………………………………………………………………..48
9 Asset Accounting .........................................................................................................................499

9.1 Asset Master Records ...................................................................................................................499
9.1.1 Asset Class…………………………………………………………………………………………………. 49

9.1.2 Account Determination………………………………………………………………………………………50
9.2 Asset Acquisition .............................................................................................................................51
9.3 Asset Maintenance ..........................................................................................................................51
9.3.1 Prerequisites………………………………………………………………………………………………...52
9.4 Assets under Construction.............................................................................................................522
9.5 Asset Capitalization process diagram (Project System)..................................................................53
9.6 Asset Posting .................................................................................................................................543
9.6.1 Asset document postings -Transaction Type ………………………………………………………….54

9.6.2 Asset Retirement…………………………………………………………………………………………..54

9.7 Asset Retirement /Revenue Accounted Diagram ..........................................................................555
9.8 Asset Transfer..................................................................................................................................55
9.8.1 Asset Retirement…………………………………………………………………………………………..56
9.8.2 Split in Asset…………………………………………………………………………………………………56

9.9 Post capitalization ..........................................................................................................................566
9.10 Asset Accounting Information System ...........................................................................................566
9.11 Asset Accounting Closing Operations ...........................................................................................566
9.12 Depreciation...................................................................................................................................577
10 Export Incentives....................................................................................................................................59
10.1 EPCG: Export Processing Capital Goods .......................................................................................59
10.2 DEPB Scheme: Duty Entitlement Pass Book .................................................................................59
10.2.1 Utilization of DEPB scheme benefit……………………………………………………………………….60

10.3 Advance License ...........................................................................................................................611
10.4 Rebate of Duties paid ......................................................................................................................61
11 Logistics Provision for Export Sales (Goods in Transit) ...................................................................61
12 Accounting of Taxes...........................................................................................................................61
12.1 Excise hierarchy...............................................................................................................................61
12.1.1 Plant ………………………………………………………………………………………………………….61
12.1.2 Excise Registration………………………………………………………………………………………….62

12.2 Purchasing Process – Excise ..........................................................................................................62
12.3 Sales Process – Excise .................................................................................................................633
12.4 Excise Duty Periodic Processing .....................................................................................................63
13 Withholding Tax (TDS) Overview:.......................................................................................................645

13.1 Withholding Tax Types ....................................................................................................................65
13.2 Recipient Types ...............................................................................................................................65
13.3 Maintain Vendor Master - Withholding Tax Accounting ..................................................................65
13.4 TDS on Procurement of External Services......................................................................................65
14 Tentative List of Forms and Reports..................................................................................................688

As per separate list ................................................................................. Error! Bookmark not defined.8
15 Annexure .................................................................................................................................................69
16 Legend.…………………………………………………………………………………………………………...69

Introduction
1.1 Purpose of this document
This document is the Business Blueprint for delivering the SAP project at Maini Precision
Products Pvt. Ltd. Bangalore, herein after referred to as MPP. It outlines the business
requirements, ‘AS-IS’ analysis, ‘TO-BE’ processes and design considerations for the project.
This document, however, will not cover the technical details of the actual customizing and
other issues which will be covered under a separate document, the Configuration and
Technical Guide.
1.2 Who should read this document
This document is meant for Business process owners, IT Manager and Key User champions
who will have to have a good understanding of SAP system. This document explains all the
specifications that are broadly captured for successfully delivering the SAP project. This is a
controlled document and its circulation is left to the discretion of Unisoft Infotech and MPP
project sponsors.
1.3 Document Derivation
MPP implementation core committee

MPP key user discussions
MPP Requirement discussions with Process owners
It is the intent of this document to capture the entire design to support the requirements
specified in the requirement document.

2 Organisation Structure

2.1 Segments / Profit Centres:
Organizational unit of external accounting that corresponds to a specific business segment

or area of responsibility in a company. Movements in value entered in Financial Accounting
are assigned to business areas.

2.2 AS-IS Process Vs TO BE SAP Process:

AS IS AS IS Sub Process TO BE
Payment to suppliers/service
1 Accounts Payable providers FI Accounts Payable Module
Printing of Cheques,List and
advices FI Accounts Payable Module
Creation of supplier codes FI Accounts Payable Module
salary payement to employees FI Accounts Payable Module
Creation of supplier codes MM Module
2 Accounts Receivable Accounts Receivable Module
Down Payments from
Local Sales-Local Sales Realization, Debit Customers
3 Cash Transactions Std SAP Process Cash Journal
Import Transactions Std SAP Process Journal Entry
4 Bank Reconciliation Statement Std SAP Process BRS - Manual
5 Bank Stock Statement Report/Forms
6 Debtors Aging Statement Report/Forms
7 Bank Realization Certificate Report/Forms
8 TDS/TCS/TDS-Salary Report/Forms
9 FBT Report/Forms
10 DEPB Schemes Report/Forms
11 EPCG Schemes Report/Forms
12 Advance License Report/Forms
13 Forward Contracts Report/Forms
14 PCFC Process Report/Forms
15 Bankers Invoice Loan Process Report/Forms
16 ASN Realization Report/Forms
17 ASN Crystallization Report/Forms
18 ASN Returns Report/Forms
19 Discounting Bill outstanding and liability Report/Forms
20 Packing Credit –RPC & PCFC outstanding. Report/Forms
21 Fund Flow Report/Forms
22 ASN-Invoice Dues Report/Forms
23 Excise, VAT Std SAP Process
24 Sales Tax Reports
25 Income Tax Form 16 & Form 16A
26 PSMS Process PSMS Process-Banking
27 Export Sales-Realisation, Debit Notes ASN Realisation
Cheque, -APP, Bank Transfer
28 Cheque Prepation & Cheque Printing. Interface
29 Balance sheet, P & L & Trial Balance Balance, P & L, Trial Balance
30 Cash Flow Cash Flow & Funds Flow
31 Logistics Payments Std SAP Process
32 Forward Cover Flow Chart Forward Cover
Bill Discounting-Banker
33 Bill Discounting Process. Invocie
34 Logistic bills provisions with export invo Logistic bills provisions with

export invo-JVs Provisions

35 Interest prepaid workings Interest Calculation
Interface with Saral Hr
36 Salary provisions Package
Asset Purchases, Asset Under
37 Assets Construction, Asset Sale
3 FI Business Process Master List

The Financial Accounting (FI) application component fulfils all the external reporting
requirements that must be met by the organization whether national or international. The
financial accounting department in MPP Ltd, Bangalore is the pivotal department, which
caters to the entire external requirement. The SAP FI application provides the following
features, which shall be used in MPP, Bangalore:
3.1 General Ledger: Standard Transactions
The central task of G/L accounting is to provide a comprehensive picture for external
accounting and accounts. Recording all business transactions (primary postings as well as
settlements from internal accounting) in a software system that is fully integrated with all
the other operational areas of MPP ensures that the accounting data is always complete
and accurate.
3.2 Accounts Payable
The Accounts Payable application component records and manages accounting

data for all vendors with respect to MPP as a whole. It is also an integral part of
the purchasing system. Deliveries and invoices are managed according to
vendors. The system automatically triggers postings in response to the
operative transactions in MM.
3.3 Accounts Receivable
The Accounts Receivable application component records and manages accounting data of
all customers with respect to MPP. It is also an integral part of sales management. All
postings in Accounts Receivable are also recorded directly in the General Ledger. Different
G/L accounts are updated depending on the transactions involved (for example,
receivables, down payments, and bills of exchange).

3.4 Bank Accounting
This component is used to handle accounting transactions that MPP processes with its
banks. It includes the management of bank master data; cash balance management
(check), and the creation and processing of incoming and outgoing payments.
3.5 Asset Accounting
The Asset Accounting component is used for managing and supervising fixed assets with
the SAP System. In SAP Financial Accounting, it serves as a subsidiary ledger to the FI
General Ledger, providing detailed information on transactions involving fixed assets with
respect to MPP.
3.6 Taxation (CIN - Country India Version)

Most of the country-specific functions for India relate to Financials and Logistics. The main
areas are as follows:
• CENVAT (Excise) duty

• VAT and Central Sales Tax
• Service Tax
• Customs Duty & CVD (Countervailing Duty).
• Maintenance and printing of statutory excise registers
• Withholding tax (also known as TDS & TCS)
The above features are required in MPP with respect to Excise duty, Withholding tax (TDS),
Sales Tax / VAT, Customs Duty and maintaining the Excise registers like RG-1, RG -23A,
RG-23C, PLA etc.
3.6.1 CENVAT
At MPP, we will calculate CENVAT & VAT using a tax procedure.
Excisable transactions are posted using the Materials Management (MM) and Sales and
Distribution (SD) components. The system calculates the CENVAT in these components
and creates the appropriate line items in Financial Accounting (FI).
Bon 2.0
3.6.2 VAT / Sales Tax
There are two types of sales tax:

• Interstate sales are subject to Central Sales Tax (CST). The tax rate is the
same throughout the country. System of Tracking of C forms receivable and
selection of maximum tax rate in case of not receiving C forms.

• Intra state sales are subject to Value Added Tax (VAT).
The SAP System handles these using tax codes.
3.6.3 Service Tax
Service Tax on Sales & Purchases with provision for availing Credit, including cross
utilization with CENVAT.
3.6.4 Customs Duty & CVD
For Import of Goods (including Capex) Customs Duty & CVD are calculated in MM based
on tax codes and finance documents are created in FI.
3.6.5 Withholding tax (TDS & TCS)
Country Version India uses the standard functions for calculating and collecting withholding
taxes. Withholding Tax come with additional functions for tax remittance, journal vouchers,
creating withholding tax certificates, and preparing returns which will be used at MPP.
For Scrap Sales, Tax Collected At Source (TCS) is collected.

4 SAP Overview
4.1 Client
A commercially, organizationally, and technically self-contained unit within an SAP System.
Clients have their own master records and set of tables.
The definition of the client organizational unit is obligatory.
The client is the highest level in the SAP System hierarchy.
In our case MPP is one Client.
4.2 Company
The smallest organizational unit for which individual financial statements are created
according to the relevant legal requirements. A company can include one or more
company codes.
In our case MPP is the Company.
4.3 Company Code
An independent Legal Entity.
Smallest organizational unit of external accounting for which a complete, self-contained set
of accounts can be created. This includes the entry of all transactions that must be posted
and the creation of all items for legal individual financial statements, such as the balance
sheet and the profit and loss statement.
In our case we are having one company code namely 1000 & 2000
4.4 Controlling Area

An organizational unit within a company, used to represent a closed system for cost
accounting purposes.
A controlling area may include single or multiple company codes that may use different
currencies. These company codes must use the same operative chart of accounts.
All internal allocations refer exclusively to objects in the same controlling area.
At MPP we have one Controlling Area

4.5 Fiscal Year and posting periods
MPP follows the financial period of April to March every year.
The fiscal year variant determines the company code fiscal year. The fiscal year will
consist of 12 normal periods and 4 special periods as per the SAP standard. The proposed
periods will be from April to March every year.
• Special posting periods are used to enter transactions relating to closing

operations. When posting to special periods, the posting date will fall within the
last regular posting period (March).
• You have to enter the special periods in the document header in the Period field,
since the special periods cannot be determined automatically by the system.
Authorized users will be able to open and close the posting periods and generate reports
by selecting a period range. This process will have to be done on monthly basis. Once a
period is closed, no entries can be posted in the system in the closed period.
The daily transactions will be handled through the concept of document types.
4.6 Documents & Document Types
The following documents are used currently:

• Cash Voucher
• Bank Payment Voucher
• Purchase Voucher for purchase bills (With GRN/ Without GRN)
• Service Vouchers for sub-contractor and service bills
• Journal Voucher (Standard Transactions)
• Sales Voucher for Sales Bills
• Miscellaneous Voucher
• Fund Transfer
• Debit Voucher
• Credit Voucher
As such, a document types represent each transaction.
Document type is a key that is used to classify accounting documents and distinguish
between business transactions to be posted. The document type is entered in the
document header and applies to the whole document.
The document type has the following functions:
• Differentiating between business transactions. The document type tells you

instantly what sort of business transaction is in question i.e. customer invoice,
vendor payment etc.

• Controlling the posting to account types (vendor, customer, or G/L accounts). The
document type determines which account types that particular document can be
posted to.
• Assigning document numbers. Each document type will be assigned a number

range key containing the number range within which the documents of that type
will be generated. The original documents from one number range should be
stored together. In this way, the document type controls document storage.
The following document types will be used for MPP:
GL General Ledger
SA G/L account document - For Posting GL entries
AB Accounting document - Reversal of GL documents
CA/CB/CC Cash Journal Doc - Cash Journal Postings (for the 3 Petty Cash Books)
I
AA Asset Accounting
AA Asset posting - For all postings into AA
AF Dep. Postings - For all depreciation postings
AR Accounts Receivables
DA Customer document - Customer transfers (Adj. Adv. Payments)
DG Customer credit memo - postings of customer credit memos
DR Customer invoice - Customer invoice postings from FI
DZ Customer payment - Customer payment postings from FI
AP Accounts Payables
KA Vendor document - Vendor transfers (Adj. Adv. Payments)
KG Vendor credit memo - Postings of vendor credit memos
KR Vendor invoice - Vendor invoice postings from FI
KZ Vendor payment - Vendor payment postings from FI
Logistics
SD Sales and Distribution
PR Price change
RA Sub. cred. Memo settlement
RN Net invoice receipt
RV Billing doc. transfer
MM Materials Management
WA Goods issue
WE Goods receipt
WI Inventory document
WL Goods issue/delivery
WN Net goods receipt
RE Invoice receipt

There will be different document types for cash and bank vouchers.
MPP requires separate alphanumerical number ranges for each document type. As such
there is no separate legal requirement to provide numbers externally for every document
they enter, at MPP the number ranges will be provided internally and they will be re-
initialized every year.
4.6.1 Document Number Ranges
Internal Document number ranges for different document types will be maintained. The
document number range has to be defined for the year in which it is used. Document
number ranges will be defined:
• Per fiscal year: At the beginning of each fiscal year the document numbering starts
again at the lower limit. This helps to avoid reaching the upper limit of a range.

4.7 Account Groups
An object that attributes and determines the creation of master records. The account group
determines:
• GL Account groups:- It is already defined at MPP and the same will be used
• The data that is relevant for the master record
• A number range from which codes are selected for the master records
An account group must be assigned to each master record.
The Account Groups used for MPP Limited for GL master data are as follows:
Sl. No. Groups No. Range

1 Liabilities 10000000-19999999
2 Assets 20000000-29999999
3 Expenses 30000000-39999999
4 Revenue 40000000-49999999
4.8 Financial Statements
4.8.1 Trial Balance
Trial Balance report can be taken in sap standard. The report which includes Opening
Balance, special period postings (13-16), debit items, credit items fields during the year
which includes the special period posting for finalization of the Account Adjustment entries
& closing balance of the all GL accounts.
4.8.2 Balance Sheet and Profit & Loss Account
The Balance sheet & Profit & Loss can be taken as per companies Act, 1956 for the
company as a whole according to the schedules of the company’s requirement.
Balance Sheet and Profit & Loss can also be generated for each Profit Center.

4.9 Sub-ledgers & sub-modules in Financial Accounting
Every posting that is made in the sub-ledger generates a corresponding posting to the
assigned G/L accounts. This ensures that the sub-ledgers are always reconciled with the
general ledger.
The Financial Accounting application component comprises the following sub-modules

(components):
• General Ledger (FI-GL)

• Cash Accounting (FI-CA)
• Accounts Payable (FI-AP)
• Accounts Receivable (FI-AR)
• Bank Accounting (FI-BL)
• Asset Accounting (FI-AA)
4.10 Special Organizational Considerations

Opening and closing of fiscal periods every month should be properly taken care of.
At the time of posting SAP system decides the nature of document based on document
type, so it must be checked properly whether the correct document type is defaulted at the
time of posting, otherwise number range will be missing and it will be difficult to reconcile
later.
In case of manual FI postings - tax codes should be properly picked up at the time of
posting, otherwise the calculations will be wrong.

5 General Ledger Processes Mapping
MPP Process Flow Diagram

General Ledger
Event
Posting (FI) Displaying Displaying Reversal Clearing

and Change
Proces Proces
Proces s
s s
Decisio Decisio
Decisio n
n n
General Ledger
Displaying a
Document
Displaying the Displaying and
Compact Changing Line Reversing a
Document Items Document
Posting G/L Journal
Account Display
Document Balances
Displaying the
Document
Journal
Displaying G/L
Balances (List)
Processing a
Recurring Entry Account Account
Account Manager
Original Maintenance: Maintenance:

Document Automatic Manual
Clearing
List of
Recurring Entry
Original
Documents
Carrying Out
Recurring
Entries
G/L = General Ledger
5.1 General Ledger Postings
The functionality with respect to limiting the authorizations while posting will be achieved by
the standard SAP functionality ‘Parking and releasing the documents’. As per the
requirement the concerned person will be given authorization for parking and his superior
for releasing/posting.
The requirement of accrual / deferral document will be handled by the SAP standard
practice of configuring a reversal reason for accrual / deferral documents and using the
posting screens provided for posting accrual /deferral documents.
To meet the requirement of posting the same type of documents every month we shall use
the concept of recurring documents and sample documents. For the cases where amount

and date is fixed we shall configure a recurring document and make use of it every month.
It will be sufficient if a batch input session is run for all such type of documents. Whenever
a batch session is run it will automatically update the GL balances. For cases where
amount is not fixed we shall configure a sample document template and save it in the
system so that when the document is to be posted that template can be called and amount
can be changed at that time. Post dated Cheque will be configured using a special GL
indicator.
5.2 Cash Management (Cash Journal)
At MPP presently there are 3 petty cash books. The company requires separate number
range for each petty cash book. At the time of transaction posting the authorization person
name shall also be updated
In SAP posting of cash journal entries are processed using a unique cash journal
identification code. One cash journal code will be defined to the area where cash is
maintained, instead of having cash ledgers for each area. This eliminates the number of
cash ledgers maintained and with single cash ledger the area will be differentiated by
cash journal code. Three separate Petty Cash accounts will be maintained with 3 different
number ranges with different document types.

Process Cash Management Status Analysis and Cash Concentration
Event
Manual Payment Bank Cash Financial

Planning Run Statement Concentration Overview
Accounts
Accountant Payable
Clear Open
vendor/creditor
Invoice
Bank
Post Manual
Bank Statement
Display
Post Memo Archive Memo Financial
Execute Cash Overview and
Record Record Concentration Liquidity
Forecast
Create
Concentration
Proposal
Treasurer
Generate
Payment
Requests
Clear
Payment
Requests

5.3 Closing operations in SAP
It is possible to take out P&L statement or Balance sheet as the case may be, as and when
required using SAP system. It is also possible in SAP that when we define reconciliation
accounts for customers /vendors / assets inherently it is linked with the General ledger and
all the postings will be done automatically to the reconciliation accounts and there by to the
general ledger directly, no manual intervention is required after implementing SAP.
After doing the period closing operations it is possible to produce internal P&L statement
and Balance sheet on profit center. At any given moment it is possible to produce the
required financial statements from SAP by transferring the closing balances properly. With
respect to assets it is possible to maintain the assets as per block of assets methodology
by grouping the assets in SAP. All additions / deletions / transfers can be applied on a
group as a whole and displayed as a report, where as, as per companies act 1956
depreciation should be calculated on individual asset.
Depreciation reserve will be captured. Option will be provided for changing the depreciation
from WDV to Straight Line method.
There is an SAP standard functionality to define the retained earnings account as P&L
statement type.
The Retained earnings account will be defined for the purpose of Indian companies act,
and all P&L G/L accounts relating to Indian companies act have to be defined as this type
of PL statement account type and at period end closing all the groupings should be taken
to Financial Statement version as per Indian companies act.

6 Accounts Payable

Accounts Payable
Event
Master Down Document Clearing

Records Payment Entry
Accounts Payable Accountant 1
Creating a Posting Down Review and

Post Vendor Release
Vendor Master Payment Invoices Blocked
Record Request Invoices
Down
Paymen
ts
Exist?
Yes
No
Down Payment
Clearing
Vendor Posting a
Credit Credit Memo
Memos with Reference
Exist? to Invoice
Yes
Creation of Payment Media

Select Invoices Using Payment Media
Workbench (Altern. 1)
Accounts Payable
to be Paid
Accountant 2
Creation of Payment Media

Using Classical Payment
Review and Medium Program (Altern. 2)
Block Invoices
Posting Down for Payment as
Payment Using Needed Post Manual Outgoing
the Payment Payment
Program
Choose
Payme Manual
nt Bank
Method Statement
Processin
g

6.1 Vendor Master Records
Vendor master records will be maintained centrally in the Finance area. Purchasing area
employees will be responsible for creating the purchasing views of a vendor master
record, or at least providing the information required in these views to Finance personnel
so they can create the views.
Vendor Master
Records
General Data Company Code Purchasing

Segment Segment Segment
Vendor Master Records contain the data that controls how business transaction are
recorded and processed by the system.
6.1.1 Vendor Structure
Vendor Master Records are divided into three segments:
• General Data Segment: This is at the client level. Example – Vendor Name,
Vendor Address
• Company Code Segment: This contains accounting information. Example – Sort
key, Field Status Group, Currency, Payment methods, Customer Bank
information.
• Purchasing Segment: This contains purchase information.
All the outside agencies to which payments will be made including Government
Authorities will be treated as vendors. Even the employees will be created as
vendors in the SAP system.
6.1.2 Vendor Account Group

Account Group determines the fields for the data entry when we create or change a Master
record in company code specific area. It also determines the number range interval.

6.1.3 Vendor - One Time Accounts

These Accounts are created for those vendors with whom we rarely have transaction. In
contrast to the normal Vendor, no data specific for a single vendor is stored in one time
Vendor master record. The system automatically proposes the master record screen at the
time of the posting of the document.
6.1.4 Vendor -Reconciliation Account

It ensures a real time integration of a sub ledger account with the General Ledger Account.
As a result no entry can be posted to the General ledger Account directly, thus ensuring
that the balance as per the Accounts Payable always matches with the Control Account in
General Ledger. Example Domestic Payables
The user can Create, Change, Display and Block Vendor Master Records.
6.2 Vendor Bill Booking

Bill Booking and Passing activity is sub-divided into following categories:
• Raw Material and consumables (With GRN)

• Expense Bills (Without GRN)
• Works Contract -GRN
6.2.1 Vendor -Automatic Accounting Document

Posting of Invoices is affected in the SAP system in two ways; supplies against Purchase
Order-GRN and Supplies without Purchase Order, direct purchase and Expenditure Bills
and Project Purchases –Non GRN.
6.2.2 Receipt of Material from Vendor against PO

In SAP, goods receipt transaction against a PO will be posted automatically to the
Financial Accounts from the Material Management Module. The same is explained in
detailed Purchase Process Blueprint.
The Accounting entries in such case will get passed in the books of account at two stages
as under:
On Receipt of Goods
Inventory Account Dr.

Freight Clearing Account Dr.
To GR/IR Clearing Account Cr.
RG 23 A / RG 23 C Part II Account Dr.

To CENVAT Clearing Account Cr.

6.2.3 Vendor Invoice against PO for services
In SAP, service received against a PO will be posted automatically to the Financial

Accounts from the Material Management Module. For this the respective department with
reference to the PO will fill a service entry sheet and an accounting entry will be
automatically transferred from MM to FI.
6.2.4 Vendor Invoice Verification
The Invoice Verification component is part of the materials system. It provides the link
between the Material Management component and the Financial Accounting, Costing and
Asset Accounting components.
Invoice Verification component in Material Management serves the following purposes:
• It completes the material procurement process-, which starts with purchase

requisition, continues with purchasing, goods receipt and ends with invoice receipt.
• It allows invoices that do not originate in Material Management also to be processed

(Invoices for Services, Expenses etc.)
Procedure for invoice verification has been covered in the MM blue print. The flow chart for
invoice verification is shown below:
The entries passed at the time of Invoice Verification are:
GR/IR Clearing Account Dr.

CENVAT Clearing Account Dr.
VAT Input Account Dr.
To Vendor Account Cr.
(Amount payable to the supplier)
Invoice verification is done after receipt of Invoice from the supplier either by the Finance
dept. or by the Purchase dept. depending upon the responsibility allotted.
Since GR/IR Clearing Account is managed on Open Management basis, after the Invoice
Verification the open GR/IR items will be cleared and balance open items will be reflect
those cases for which Invoice Verification is still pending.
Debit Notes on Vendors:

Rejection against GRN
Rejections against a GRN will be sent to the vendor on excise invoice. On

generating the invoice the system will automatically post the following entries in FI:

GR/IR Clearing Account Dr.

CENVAT Clearing Account Dr.
To Inventory Account Cr.
To RG 23 A / RG 23 C Part II Account Cr.
To VAT input Account Cr.
Line Rejection
In case of line rejection the item rejected will have to be located against the
respective GRN and the same will have to be sent back to the vendor against an
excise invoice. For this, a different document type will be maintained in MM / SD.
For non-excisable items debit note may be passed (Credit Memo) in FI.

6.2.5 Vendor Invoice Reversing

• It is possible for a user to make an input error. As a result, the document created will
contain incorrect information. In order to provide an audit of the correction, the user
must first reverse the document in error, and then capture the document correctly.
• The system provides a function to reverse G/L, A/R and A/P documents both
individually or in mass.
• When reversing a document, a reversal reason code must be entered to explain the
reversal. The reason code also controls if the reversal date is allowed to be different
from the original posting date.
Documents with cleared items cannot be reversed. The document must first be reset.

6.3 Vendor-Invoice without PO

It is also possible to post invoices from FI (f-43) without the necessity of purchase
order. This can be used to fulfill the requirement of postings like miscellaneous
payments, employee related payments, travel agent payments, hotel bills,
consultancy payments or any other service bills where material receipt is not
involved.
If the vendor is subject to withholding tax, the tax type / tax code (TDS) entered in
the vendor master will be defaulted from the master. The tax amount will be
calculated on the basis of this tax type / code. Enter the G/L Account to be debited
and the amount. There is a facility in SAP to check the accounting entry before it is
posted. For this the user needs to simulate the transaction.

6.4 Vendor Down payment process
• Down payment functionality is available for making advance payments to vendors.

• A request for making the down payment is received from the Purchase Dept against
the purchase order reference. The advance Payments covers the Logistic payment
advance for domestic & foreign Imported RM/CG (EPCG). Based on this request a
down payment is made by the Finance dept.
• A down payment transaction is posted to a Special G/L A/c named Down Payment
Account and the same is grouped under the Current Assets as Advance Paid to
Vendors.
• However, whenever the Vendor’s Account is viewed, the same would always appear
in Account, although it is being grouped under Current Assets. All future invoice
transactions made to that vendor account would include a prompt from the system
reminding the operator that there is an outstanding down payment open for this vendor.
This will continue to happen until the down payment is cleared with an invoice during
account maintenance.
• The down payment amount is posted to a separate General Ledger Account (Down
Payments Accounts) upon initial entry using a special G/L indicator. When the down
payment is cleared against an invoice the amount is removed from the separate
reconciliation account, is offset against the invoice and is posted to the regular vendor
reconciliation account.
• The reconciliation account for vendor down payments must be reviewed periodically to
ensure all down payments are eventually cleared.
• Down payments are posted to a separate General Ledger Account (Down payments
Account). A special General Ledger indicator is used for this purpose. The user can
clear the Down payment account at the time of the purchase invoice or at the time of
actual payments.


6.5 Vendor Payments
By using the SAP standard functionality all the cheque payments can be managed. The
typical procedure under SAP with respect to cheque will be
a) Defining the cheque lots for each and every house bank of MPP
b) Entering the vendor invoice
c) Entering the vendor payment by clearing the open item created by invoice.
d) Attach cheque to the payment document no generated in step (C)
e) Check the cheque register to see the Cheque update.
6.5.1 Payment by Cheque
• The payment is made for a single vendor at a time.

• After entering the company code, vendor, amount and bank the user can
view the open invoices for which payment is to be made.
• User can select the invoices, which are to be paid and post the payment
voucher.
• Manually prepare the check or print the check.
. Cheques are prepared through system with Individual Cheque and if payment to
multiple vendors – then it is through Automatic Payment Program.


6.5.2 EDI Payment Method

Another method of payment to multiple vendors is EDI transfer (Electronic Data Interface).
Under this system electronic transfer of payment through banks to vendors bank
accounts directly. Through this method Payment credited to vendor’s bank account directly
and message given though email to vendors about the proceeds credited to bank
account directly. The EDI payment process initially started with APP payment program.
The process of Diagram as follows under.
Payment
Advice Verified Upload the File to
by Internal HSBC Converter,
Auditor give password and
ENTER
Saved the
file in
Temporary
Running the Running
Folder in Open & print
APP Customization
form out the file
Assign Screen with
Payment Identification of in word
Method APP & Saved the format
C: Cheque Screen
T: Transfer

6.5.3 Methods of Payment to Vendor
The payments to vendors can be made in the system under the following methods:
• Manual Outgoing payment
Using the above methods, the open items will be cleared on payment.
Payment against the open items can be cleared as under:
• Full Payment – Invoices will be cleared

• Part Payment – Invoices will not be cleared until rest amount is paid.
• Residual Payments – It is again a part payment of invoice with the exception that
the system will clear the full invoice and creates a new open item against a new
document number.

6.6 Employee Vendors:
In SAP we would create Employees as Vendors & Cost Center for Payment of Salary &
Capturing of costs. For the Salary Processing, there would be Integration between SAP FI
& Saral HR Tool. In Saral HR tool provision need to be created for cost center & Vendor
No against the HR Records. The data from Saral would be downloaded in .xls/.txt format
along with the SAP Vendor No & Cost Center.
Then this would be uploaded in SAP in the form of FI Journal Entries with the help of data
upload program.
6.7 Vendor – Account Clearing
All the vendor accounts will be cleared either on one to one basis (FIFO methodology is
also available). Bank Charges can be entered with the payment – which automatically
posts to the Bank Charges account. A payment difference tolerance will be available for
users with authorization (end users will have a zero tolerance).
6.8 Vendors Correspondence

MPP is sending all the balance confirmations, debit notes and payment advices to vendors
periodically. This is possible by using the SAP standard functionality.
6.9 Special organization consideration
Classification of vendors as per normal vendors and Employee vendors has to be handled
by using account groups. Different vendor account groups have to be created, and care
must be taken at the time of creating the vendor to group them under the account groups
created.
After implementation of SAP as all the systems viz., MM, FI are integrated invoices
recorded in stores can be seen in FI and any down payments made will be reflected in the
vendor sub ledger. So care must be taken at the time of entering invoices and down
payments. A document once posted from any module will have consequences on every
other module and it will be a lengthy procedure if anything to be reversed after entered.
For correspondence with vendors there are SAP script forms provided and whenever
company wants to send the letters that must be properly checked with the correspondence
forms configured and those forms should be generated from the system to have the record
of correspondence sent.

7 Accounts Receivables
7.1 Customer Master Records
Customer Master
Records
Company Code
General Data Segment Sales Segment
Segment
Customer Master Records contains data that controls how business transaction are
recorded and processed by the system.
7.1.1 Customer Master Structure
Customer Master Records are divided into three segments
• General Data Segment: This is at the client level. Example – Customer Name,
Customer Address, TIN No, etc.
• Company Code Segment: This contains accounting information. Example – Sort key,
Currency, Payment methods, Customer Bank information.
• Sales Segment: This contains Sales information. Example: Sales Organization. Credit
control area / limits, Profit centre etc
7.1.2 Account Group

Account Group determines the fields for the data entry when we create or change a
Master record in company code specific area. It also determines the number range
interval. The following Account Groups will be maintained
• Sold-to-party
• Ship-to-party
• Payer
• One time Customer

• Bill-to-party
7.1.3 Customer -One Time Accounts
These Accounts are created for those customers with whom we rarely have transaction. In
contrast to the normal Customer, no data specific for a single customer is stored in one
time Customer master record. The system automatically proposes the master record
screen at the time of the posting of the document.
7.1.4 Customer Reconciliation Account
It ensures a real time integration of a sub ledger account with the General Ledger Account.
As a result no entry can be posted to the General ledger Account directly, thus ensuring
that the balance as per the Accounts Receivable always matches with the Control Account
in General Ledger. E.g. Domestic Receivables.
7.1.5 Customer Number Range Interval
A number identifies every customer master record. The number will be generated by the
system internally or the user can create master by external number. The number range
interval has to be assigned to each customer group.
The key user can Create, Change, Display and Block Customer Master Records.
7.1.6 Debtor – Creditor Adjustment
There are some customers who are also the vendors of the company. In such cases the
balances in the creditors account is adjusted to the extent of balance lying in debtor’s
account. The flow for the same is as under:
If the customer is also a vendor, or vice versa, the payment and the dunning program can
clear open items against each other. Open items of the assigned account can also be
displayed on the line item display and the open item selection screen.
To use this clearing, the following steps must be taken:
• The vendor account number must be entered into the customer account and the
customer account number must be entered into the vendor account.
• Each company code can decide separately whether it wants to clear a customer with a
vendor. If clearing is to be used, the field “ Clrg with vend.” in the customer account
must be marked and vice versa.
• At the time of payment system will show open items in Accounts Payable as well as
Accounts receivable for clearing against payment.
• Information System

7.2 Debtor Ageing Analysis Report
Report in the financial Information system provides Ageing analysis with duration of
maximum 3 years.
7.3 Debtor Account Balance
The account Balance displays the following
• The opening Balance

• The total of all transactions for each posting period, broken down to Debit and Credit
posting.
7.4 Debtor Receivable
The company made sale to in two types of customers.

• Domestic Customers
• Foreign Customers
7.4.1 Domestic Customers – As-Is
For Domestic Customers the invoices send to collection as normal business process to
Bank. After realization the proceeds credited to company’s term loan account or current
accounts of the Company
7.4.2 Foreign Customers (Forward Contracts) – As-Is
AS-IS
1st Stage
MPP’s foreign sales process start with Forward Contract with bankers for specified time
duration against projections of sales order planning. At the end of the Forward contract
period, the Banker cancels the forward contract for the unutilized portion, and the
difference (Loss) is debited to the MPP term loan account.
2nd Stage:
MPP receives the sales order from foreign customers according to the INCOTERMS.
Based on the sales order, the MPP takes PCFC loan (presently 81% max & duration of
180 days max.). If the bank is not having forex funds at the time, MPP takes Rupee loan
against the sales order or PCFC loan with spot rate (LIBOR+0.XX %).

3rd Stage
MPP raises multiple Bankers’ Invoices in India against one foreign sales order
denominated in Foreign Currency. The Banker’s Invoice is the official Invoice for all
statutory purposes in India.
4th Stage
MPP discounts (BCD) the Banker Invoice either with the same PCFC loan bank and clears
the PCFC loan or discounts with other banks and clears the PCFC loan of the first bank.
5th Stage
The goods reach the Company’s warehouse (foreign). As per the customers planned
schedule, the material is delivered by the warehouse (MPP own warehouse) raising
multiple ASN invoices.
6th Stage
The customer receipts against the ASN directly credited to the Company’s bank accounts
with cross currency receipts. Banker’s Invoice Loan is cleared manually.
At year end – Bankers Invoice and ASNs are reconciled and all Bankers Invoice are
reversed.
7.4.3 Accounts Receivables – Domestic – To-Be

To-Be

Accounts Receivable
Event
Master Down Document Clearing

Records Payment Entry Reporting
Proces Proces Proces Proces Displaying a

s s s s Customer
Decisio Decisio Decisio Decisio Accounting
n n n n Document
Displaying and
Changing
Customer Line
Post Customer Items
Posting Down Invoices
Creating a Automatic
Payment
Accounts Receivable
Customer Clearing
Request
Master Record Displaying
One-Time- Customer
Accounts Balances
Postings
Posting a Down Manual

Creating One Clearing
Time Account Payment
Manually Posting a
Credit Memo
with Reference
to Invoice
Manual Bank
Proces Statement
s Processing
Decisio
n
Reprocessing
an Account
Posting Posting Statement
Payments Payments
Using the Using the
Payment Manual
Program Payment
7.4.4 Foreign Customer Realization Process – To-Be
For foreign Customers realization, the process of raising the Bankers Invoices & ASN
Invoices detailed report can be viewed in SD Module.
1St Stage:
Forward contract Provision
When the forward contract agreement with bankers is made, the banker will give a number
for each forward contract. The Forward Contract No, amount and due date will be updated
in SAP. This will not have any effect in the financial account. Based on the update made in
SAP, reports can be generated. The unused amount of the forward contract shall be taken
into the SAP by passing JV entries as per debit note issued by the Banker.

2nd Stage:
The Export Sales Order, received from the customer shall be submitted to the banker to
get the PCFC (Forward Contract Rate/Spot Rate) loan.
The PCFC transaction shall be posted in the books of account as normal Bank loan. The
Interest, Bank and processing charges is deducted at the time of releasing PCFC by the
Banker; the net amount of PCFC loan shall have the entry as follows
Term Loan Dr
Bank Charges Dr
Bank Int Dr
To Gross amount of PCFC Loan account Cr
At the time of PCFC document posting through JV, the account information has to cover
forward contract, sales order and due date (Max. 180 days) of the PCFC loan.
3rd Stage:
Multiple bankers’ invoice against the sales order and some times a direct sales invoice
(direct sales to foreign customers) will be raised. Even in cases of direct sales – a Banker’s
Invoice will be generated.
When the banker’s Invoice is raised for stock transfer from plant to warehouse – there is no
financial implications. The Banker’s Invoice will be considered for Customs & other
statutory purposes.
If there is any adjustment due to earlier Banker’s Invoice, a Surcharges or Discount (with
maximum of 10% of the value of the goods) is adjusted in the Banker’s Invoice.
The Banker’s Invoice is discounted with the bankers (180 days Max and Grace period of
30 days from the due date as per RBI guidelines) in foreign currency.
The rate of discount is the forward contract rate, for full or partial amount of the banker’s
Invoice and this is used to clear the PCFC loan.
The Banker will deduct the Interest, processing charges of BCD loan and net amount of the
BCD proceeds are transferred to PCFC loan account. The Interest amount accounted as
per the Banker’s advice in the financial books against the Sales order.
If the Banker does not have Forex funds at the time of BCD loan, then the company takes
INR loan against the Banker’s Invoice.
When the Company takes partial bill discounting against the Banker’s Invoice, the
remaining portion of the amount is accounted in the books as Bills for Collection.

4th Stage:
MPP raises the ASN (updated in Finance – including Sales Revenue & AR) at foreign
warehouse at the same rate or this may be different (if the Customer’s rate has been
revised).
The Customer makes payment against the ASN to MPP’s bank account. On receiving the
information from the Bank, the receipt is entered in SAP and the ASN is cleared.
A customized report provides information on the link between the Bankers’s Invoice and
the ASNs. The BCD loan is to be cleared based on this report.
5th Stage.
All ASN invoices are raised at notional rates or banker invoice rate. At the time of
realization of ASNs, based on the custom report – the BCD loan is cleared on FIFO basis.
If there is any difference in forex rates at the time ASN collection accounted as Foreign
Exchange gain/loss account.
7.5 Bills crystallization

Sometimes the ASN is not realized with the due date or there is a Sales return, BCD loan
is still cleared based on the custom report by returning the loan.
When the crystallized amount is received from the customer, the proceeds are accounting
in the Bank.
7.6 Customer down Payments

SAP gives a facility to work with customer down payments. If the customer pays by
cheques / DD / cash as a down payment it can be captured in a separate GL account
‘Advance from customers’ and can be adjusted against the invoice after goods are
dispatched.
The process will be as follows
• Customer places order with Sales.
• The customer makes a payment by cheque, cash, DD, LC and unadjusted credits.
• Sales person processes the incoming payment in SAP as a down payment credit to
the customer, estimating the bank charges if necessary
• A sale creates an order in SAP.
• The pricing is checked.

• Credit check will be performed.
• Releases the delivery block (if any created because of credit check) so that dispatch
department can process the delivery.
• MPP delivers with freight paid by the customer or the customer can nominate their
forwarder.
• Dispatch department creates the delivery, posts goods issue and invoices the
customer
• Then the sales person / finance clears the invoice and down payment
7.7 Customer Credit / Debit Memo

• Credit Memo / Debit Memo will usually flow from SD Module only for price
differences/ goods returns etc. The flow chart showing the flow for rejections
received from customers and the accounting entries posted in FI is shown below:
• In case a credit / debit memo has to be posted from FI, the same will be raised on
customers against Debit / Credit Notes received from them (these are for non-
excisable items).
7.8 Customer Account Analysis
By using the standard SAP functionality profit centers can be selected on the selection
screen based on which, system fetches the records with respect to the particular customer.
Details of letter of credit and bank guarantees given by customers can be seen.
Advances from customers can be seen
V
7.9 Customer Account Clearing
All the customer accounts will be cleared either on one to one basis (FIFO method also
available).
While seeing the customer account all accounts based on document type will be displayed,
which will be cleared by selecting them. Here we can see the credit notes given, overdue
balances by sorting the fields and select line items based on the sorting.

8 Bank Accounting
The cash journal is a sub ledger of Bank Accounting provided in SAP (also mentioned
above under GL accounting). It is used to manage a company's cash transactions. The
system automatically calculates and displays the opening and closing balances, and the
receipts and payments totals. MPP can also carry out postings to G/L accounts, as well as
vendor and customer accounts. We can also print pre-numbered cheques and cash
receipts.
Any cumulative statement can also be taken out from cash journal, as required by MPP at
any point of time.
All the entries of bank guarantees can be done by creating a special GL indicator and
make statistical posting into the concerned GL account. If the BG goes for realization the
postings have to be reversed manually and the real postings have to be done.
The statement from the bank can be uploaded into the system by using the following
method:
• Using the international standard format – SWIFT MT940 (if the Bank is able to
provide data in this format.
• Using a pre-defined format on excel – with a customized program to upload the
Bank Statement
8.1 Outgoing Payments
All the outgoing cash postings will be made to the cash journal, and the cheques will be
recorded in the cheques issue register by assigning them to the outgoing payment.
8.1.1 Cheque Management
By using the SAP standard functionality we can create Cheques lots and assign numbers
to them based on the numbers given to company from the bank. Once the cheques are
created and assigned with MPP bank the cheque numbers will comes serially.
All the branches that receive cheques deposit the same in the Depot Bank Account
(Canara Bank, HSBC & SBI Branch Accounts) by the end of the day balance in the
account will be transferred to head office bank account.

There are screens provided to void the cheques in cases of any printing mistakes, cancel
the payments once made, and also the cancel the cheques sent. Cheque register is
available for all cheques issued, cheques voided, cancelled etc.
Getting the BRS by using bank-clearing accounts is better explained in detail in the
process mapping explained below.
8.1.2 Cheque Management Process Flow Diagram
The function of cheque management will enable printing of cheque through SAP. Cheque
series will be defined for a combination of a Company code and Bank Account. Cheque
numbering will be sequential order.
Petty Cash
(Contra) Bank to
Bank &
Credits
Saved &
Print the
Payment Update Cash
Journal
Internal
Auditor
Scrap Receipts
/Other Receipts
8.2 Bank Reconciliation
Adding the balances in the Bank sub accounts will help in preparing the Bank reconciliation
statement.
The following scenarios would explain the reconciliation process:
Cheque received from customer

Cheque issued to vendors
Cheque received from Other than Customers
Direct Debits in Bank Statement
Direct Credits in Bank Statement
Fund Transfer between Bank Accounts (Contra Entries)
8.2.1 Cheque Received from customer

• Accounting entry at the time of cheque deposit entry

Bank Cheque deposit account Debit

To Customer Credit
• Accounting entry after cheque has been cleared in the Bank statement
Main Bank account Debit

Bank Cheque deposit account Credit
The clearing criteria for updating the bank main account and bank sub account will be
amount and document number, which will be captured in the allocation field of the bank
sub account. The items, which have not been cleared in the bank statement, will remain
open in the bank sub account and will form part of the bank
Reconciliation statement.
8.2.2 Cheques issued to vendors
• Accounting entry at the time of cheque issue
Vendor account Debit

To Bank cheque payment account Credit
• Accounting entry after cheque has been presented in the Bank
Bank cheque payment account Debit

To Main Bank account Credit
The clearing criteria used for updating vendor account and Bank cheque payment account
will be amount and cheque number. The cheques presented to the bank and are cleared
are transferred to the bank main account. The remaining cheque issued will form part of
the bank reconciliation statement.
8.2.3 Direct Debit in Bank
Direct debit instructions will be given to the bank for example, LC payments or certain bank
charges are directly debited in the Bank Statement. In this case accounting entry is passed
only after the entry is passed in the bank statement.
Vendor / Expense Account Debit

Bank clearing account Credit
8.2.4 Direct Credit in Bank
Customer receipts are sometimes directly credited in Bank. E.g. export receipts. In this
scenario accounting entry is passed only at the time of bank statement entry.

• The following accounting entry is passed
Bank clearing account Debit

Customer account Credit
Main Bank A/c Debit

Bank Clearing A/c Credit
9 Asset Accounting
9.1 Asset Master Records
9.1.1 Asset Class

SAP provides defining of different assets based on the asset class. Asset Class is the main
criterion for classifying fixed assets according to legal and management requirements.
Hence, first asset class has to be defined before creating the master records under various
asset classes.

Asset Class may be defined as follows:

• Free Hold Land
• Factory Building
• Admin- Building
• Plant and Machinery
• Computers
• Factory Equipments
• Factory Equipments (below Rs.5000/-)
• Office Equipments
• Office Equipments (below Rs.5000/-)
• Furniture and Fixtures
• Furniture and Fixtures (below Rs.5000)
• Office Vehicles
• Commercial Vehicles
• Asset under Construction (W.I.P).
Asset classes are assigned to a chart of Depreciation. Once the asset classes are defined,
different asset master records will be created under the asset classes. Each class will be
assigned a number range to give a different number to each of the asset
The asset class provides default values to all asset master records in the class. In this way,
the asset class functions as a sample master record, and make it possible to create new
asset master records simply and without errors.
The functions of the asset class are

• G/L Account Determination
• Depreciation Account
• Number Range for assignment of asset main numbers
• Assignment of sub-numbers to the main numbers. This number along with the main
asset number uniquely identifies a fixed asset.
• Using the sub-number, you can:
• Provide for separate management of later acquisitions to the main assets.
• Represent complex fixed assets with their component parts. In contrast to the main
asset number, the asset sub-number must be numerical.
• Screen Layout for Asset Master
9.1.2 Account Determination
Acquisition and Production Costs (APC) of assets are posted based on the account
determination in the Asset class. The Account determination in the asset class is an
automatic function that determines the general ledger accounts for posting in Financial
Accounting. The depreciation values are posted to the balance sheet accounts and income
statement accounts based on the depreciation area in the asset class.
The user can change, display and block asset master records.

Time dependent data in the master data provides history.
9.2 Asset Acquisition
All Asset purchases would be routed through Materials Management in the form of a
Purchase order. The Finance Section will create the Asset Master record before Purchase
Order is raised through MM Module. Assets shall be sub-divided into “Asset Classes”
based on a logical grouping of Assets of similar kind. Assets purchased in MPP in the
nature of Office Equipment, Computer Equipment, Furniture and Fixtures and Vehicles will
be capitalized directly without routing it through Capital Work in Progress (CWIP) to make it
capitalized on a stand-alone basis. The Diagram as follows.

Asset Accounting – Asset Acquisition
Event
162
Asset Acquired Overview
Asset Accountant
Acquisitio
n with Acquisition with
Accounts No Automatic
Payables Offsetting Entry
Yes
Acquisition
Integrated with
Accounts Payable
Accounting
9.3 Asset Maintenance
An Asset Master record will be created first in the Fixed Asset module on internal
approval for Purchase.

The fixed asset data records for master data are structured according to area of use
and purpose. Master data maintenance is organized according to this structure and
allows for individual adaptation.
In order to make it easier for the user to create, maintain, and evaluate master data,
the different items of information are structured according to area of use and
functions in the system. The asset master record consists of two parts that are
described below.
9.3.1 Prerequisites
This part of the master record contains concrete information about the fixed asset.
The following field groups exist:
• General information (description, quantity, and so on)

• Account assignment
• Posting information (for example, capitalization date)
• Time-dependent assignments (for example, cost center)
• Information for plant maintenance
• Information on the origins of the asset
• Physical inventory data
• User fields/evaluation groups
• Insurance data
A Purchase Order will be raised for the Asset number.
During the Process of Goods Receipt the value will be posted to the asset; this will be a
CWIP Asset or Direct Asset. In case the receipt is for a direct asset, the capitalization date
will be captured from the date of Goods Received Note. The capitalized asset is
depreciated from the capitalization date updated.
In case of Assets having multiple components, which are parts of the same asset will be
capitalized as a Sub Assets along with the Main Asset. The Sub Asset will get depreciated
along with the Main Asset. Asset calculations, depreciation information and other details
are stored in the system at the sub-asset level. This will help to track down the Assets,
which are attached to the Main Assets. Therefore it is possible to retire/sell/discard assets
at the Asset Sub-number level.
9.4 Assets under Construction
Assets under construction (AUC) are a special form of tangible assets. They are usually
displayed as a separate balance sheet item and therefore need a separate account
determination and asset classes. During the phase in which an asset is under

construction, all actual postings are assigned to the AuC. Once the asset is completed, a
transfer is made to a master record that has to be created in the completed fixed assets.
You can manage assets under construction in the system as individual master records,
just as you do completed assets.
You can also use collective management of several assets under construction on one
master record. You can distribute to the proper assets when the asset under construction
is completed by using either:
• Line item settlement (see below) or
• Summary Settlements or simple transfer to other asset master records
When assets under construction are managed by line item, you can enter settlement rules
for every line item assigned to the AuC and accordingly transfer the amount lying in the
AuC to the respective completed asset.
In the case of summary management, the entire expenses incurred are transferred once or
several times to the asset(s) in the completed tangible fixed assets at the date of
capitalization.
9.5 Asset Capitalization process diagram (Project System)
Sub Asset Update

Assign Deprn Keys Main Asset
Master EPCG
1000001-0
1000001-1
WDV
AUC Capitaliz Settlement &

ation Distribution
date
WBS Project Planning

Releasing
Network/Activity

9.6 Asset Posting
During the asset posting, the system determines the General Ledger Accounts based on
four things:
Company code chart of accounts
Depreciation Area
Account allocation key
Transaction type
9.6.1 Asset document postings -Transaction Type
Transaction types are used for every asset postings. Transaction type identifies the
acquisition, retirement and transfer of assets. Transaction types specifies
Accounts in an account allocation
Depreciation Area
Value fields
The SAP standard document types will be used viz., ‘AA’ (for asset posting), ‘AF’ (for
depreciation posting).
Asset Acquisition: This is explained in detail in Material Management Blueprint. The

following information is automatically updated in the asset master record at the time of the
first acquisition posting.
• Date of Capitalization
• Acquisition period
• Depreciation start date
• Insurance, FC, Tax Renewal Dates
9.6.2 Asset Retirement
Fixed asset retirement is the removal of an asset or part of an asset from the asset
portfolio.
This removal of a complex fixed asset (or part of a complex fixed asset) is posted from a
bookkeeping perspective as an asset retirement. In Asset Accounting, you can post both
the sale of an asset and the resulting revenue in one single step. At the same time, you
can decide whether to integrate the posting with Accounts Receivable Accounting or to
post to a clearing account.
Depending on organizational considerations or the business transaction that leads to the

retirement, you can distinguish the following types of retirement:
• An asset is sold, resulting in revenue. The sale is posted with a customer.

• An asset is sold, resulting in revenue. The sale is posted against a clearing

account.
• An asset had to be scrapped, with no revenue.
The system enables the user to post the entry to Accounts Receivable, the Revenue
posting and the asset retirement in a single step. The system automatically creates a Gain
or Loss posting, as well as a revenue clearing entry, in addition to the asset and the
accumulated depreciation correction posting. The system determines the reference period
for the asset retirement based on the asset value date and the period control of the
depreciation key.
9.7 Asset Retirement /Revenue Accounted Diagram

Asset Accounting – Retirements
Event
162
Asset to Be Retired Overview
Retiremen
t with Retirement Due to
Revenue No
Scrapping
Expected
Yes
Asset Accountant
Retiremen Retirement with

t with No Revenue without
Customer Customer
Yes
Retirement with
Revenue and
Customer
9.8 Asset Transfer

Asset transfer may be due to the following reasons:

9.8.1 Wrong Asset Class

In case, the asset was created under a wrong asset class then a new asset has to be
created in a New Asset Class and an “Intra Company Transfer” will to be executed. During
the Asset transfer, SAP transfers Acquisition Value, Accumulated Depreciation as of the
day of the Transfer from the Old Asset to the New Asset. Depreciation will be prospectively
calculated with the new rate.
9.8.2 Split in Asset
The assets need a split. A portion of the original asset will be transferred to a new asset
9.9 Post capitalization
Post-capitalization represents subsequent corrections to the Acquisition and Production

Costs (APC) (gross value) of a fixed asset. Any changes in the value after Capitalization of
asset will be rectified in Post Capitalization.
This transaction is also used for revaluation of foreign currency asset on loan or the
amount that is payable to the vendor.
9.10 Asset Accounting Information System
Asset History: Asset History Sheet provides the following information
• Acquisition and production cost at start of the fiscal year

• Depreciation at the start of the fiscal year
• Acquisition during the year
• Retirement during the year
• Transfer during the year
• Current Acquisition and Production cost
• Current Depreciation
9.11 Asset Accounting Closing Operations
The year-end closing program is used to close the fiscal year for one or more company
codes from an accounting perspective. Once the fiscal year is closed, you can no longer
post or change values within Asset accounting (for example, by recalculating depreciation).
At the time of closing the period system performs the following checks.
• The system found no errors during the calculation of depreciation (such as, incorrectly
defined calculation keys)

• The planned depreciation from the automatic posting area has been completely posted
to the general ledger.
• All in -complete assets (master records) have been completed construction.
The system lists any assets that do not meet the above requirements in the log of
the year-end closing. The log also shows the reason for the errors.
9.12 Depreciation
Different depreciation rates are configured using different depreciation keys and they will
be attached with the asset masters at the time of creating an asset master. Depreciation as
per the Companies Act, 1956 will be handled by creating ’Book Depreciation’ as
depreciation area.
A chart showing the structure of depreciation is shown below:
Written Down Value Method will be configured for the purpose of depreciation calculation.
The asset master record contains the depreciation terms. The system calculates the
depreciation based on the depreciation key. The system determines the depreciation start
date from the asset value date of the first acquisition posting.
Provision to calculate unplanned depreciation is available and will be provided. Unusual

influences, such as damage, which leads to a permanent decrease in the value of the
asset, are covered by unplanned depreciation.
The flow chart for processing depreciation in SAP is as under:


The depreciation posting cycle is determined by entering the length of time (in posting
periods) between two depreciation-posting runs. This means that a setting of 1 indicates
monthly posting, 3 means quarterly posting, 6 means semi-annual, and 12 means annual
(for a fiscal year version with 12 posting periods). When a depreciation-posting run is
started, one has to enter the period for which one wants it to be carried out. Monthly
postings to be carried out.
A batch input session will be run called ‘depreciation run’ for posting depreciation using
periodic execution functionality. The required posting documents are created once this is
run and the depreciation amount will be posted to the general ledger.
Adjustment postings can be made using Repeat or unplanned posting run.
10 Export Incentives
MPP’s majority of Sales is export against foreign sales orders. Presently MPP takes export
benefit under three schemes.
10.1 EPCG: Export Processing Capital Goods
MPP uses this facility when the Capital Goods are imported from foreign country especially
for manufacture of exported finished goods. At the time of import MPP pays 3% as
Customs Duty instead of the normal rate structure of approx. 30% according the rules &
regulations of Customs Act.
For using this confessional/rebate of duties, MPP submits, to the Customs Dept., Bank
Guarantee for a specified number of years.
There is an export obligation of 8 times the saving of duty under this scheme which has to
be fulfilled in a time frame of 8 years.
This will be handled through custom reports (at the time of creating Banker’s Invoice – it
has to be mentioned whether under EPCG or otherwise).
10.2 DEPB Scheme: Duty Entitlement Pass Book
MPP exports certain finished goods which are specified under the DEPB incentive scheme.
Specified materials have a specified rates according to the official Gazette of the JDFC
Dept.
At the time of raising Banker invoice, it will be mentioned whether covered DEPB scheme
or not.

After realization of the ASN using the custom reports it can be determined whether to apply
for DEPB or not. MPP applies to the Banker for Bank Realization Certificate in specified
format of Bankers. After receiving the BRCs, MPP submits it to JDFC to get the DEPB
incentive scheme benefit.
10.2.1 Utilization of DEPB scheme benefit.
At the time of receipt the DEPB scheme benefit the book entries as follows.
Export Incentive Scheme Dr (Asset)

To Export Incentive Scheme Provision Cr (Liability)
1) Process for - When utilizing for own use
When goods are imported
Customs Duty Payable Dr (Liability)

To DEPB Incentive Scheme Cr (Revenue)
To that extent of utilized the scheme the provision is reversed:
Export Incentive Scheme Provision Dr (Liability)

To Export Incentive Scheme Cr (Asset)
2) When selling the DEPG benefit in the market
Bank /Customer A/c Dr (Asset)

To Export Incentive Scheme Cr (Revenue)
Export Incentive Scheme Provision Dr (Liability)

To Export Incentive Scheme Cr (Asset)
The scheme benefit shall be utilized the MPP within 2 years of issue. If any amount is left
over unutilized, it is reversed.
The MIS information will be obtained with customized report.

10.3 Advance License
Sometimes MPP imports raw material for manufacture and subsequent of exclusively
export of goods under this scheme. The detail process covered in MM module.
Under this scheme the finished goods manufactured with specific Input/Output ratio
(Limited scrap ratio) shall be exported within stipulated period (2Years with paying some
extra applicable fee) according to the Customs Act. If any finished goods & the excess
scrap (O/I) through using of the imported raw material, sold in the domestic market, MPP
has to pay the duty, interest and penalty interest to the extent of sales of finished goods &
scrap sales. If there is any unutilized imported raw material, MPP has to workout the value
to pay the customs duty to dept. with applicable duty & Interest debited to P & L account.
At the time of raising the Banker’s Invoice it is mentioned whether covered under Advance
license or not.
10.4 Rebate of Duties paid
MPP purchases from overseas as well as the domestic market – the inputs for
manufacturing of goods which are mainly exported.
MPP pays CENVAT on its purchases (CENVAT when domestic purchase and CVD when
imported). The CENVAT can be utilized when there is a domestic Sales.
MPP has 80% of export sales and there is no CENVAT on Exports – hence CENVAT credit
amount is accumulated & unutilized.
11 Logistics Provision for Export Sales (Goods in Transit)

This will be a month end process. The export logistics provision will be accounted through
normal JVs (giving the reference of SO & Banker’s Invoices of every month). At the month
end the actual is accounted as expenses and the provision is reversed.
12 Accounting of Taxes
12.1 Excise hierarchy
12.1.1 Plant
• Location that stocks, manages, and valuates inventory.

• Can be a physical location (cost centers may or may not be associated to a plant i.e.
Administrative vs. manufacturing cost centers).

• A Plant is assigned to a Company code. Purchasing organization and sales

organization are assigned to plants.
12.1.2 Excise Registration
• An entity that is entitled by law to produce any goods liable to excise with its Own
Excise Registration Number.
12.1.3 Excise Groups
• A unit within excise registration that is purely internal, which keeps records of all
transactions that have to be reported to the excise authorities.
Excise groups are assigned to Excise registration
12.2 Purchasing Process – Excise
1. Procurement of Stock Materials – RM Local / Return
• Capture Basic Excise Duty, Education Cess, Higher Education Cess, AED etc.,
• Capturing / Posting Excise Invoice
• Generate Excise Invoice
• Update the Registers RG23A Part I, RG23A Part II
• Printing RG23A PART I/PART II, CENVAT Register
2. Procurement of Capital Materials
• Capture Basic Excise Duty, Education Cess, Higher Education Cess, AED etc.,
• Capturing / Posting Excise Invoice
• Update the Registers RG23C Part I, RG23C Part II
• Only 50 % of CENVAT availed for the current year
• Balance 50% CENVAT to be transferred to RG23C subsequent fiscal year
• Printing RG23C PART I/PART II
3. Procurement of External Services
• Capturing the Service Tax– general / freight

• Allocation of service tax to Factory
• Capturing TDS against Payment (Outgoing Payment)
• Generate & Print TDS Certificate Vendor wise / Section wise
• Generate the TDS Annual Return Section wise

12.3 Sales Process – Excise
1. Process – Direct Sales Domestic (Factory to end customer)
• Capture Basic Excise Duty, Education Cess, Higher Education Cess

• Creating / Posting Excise Invoice/Printing Excise Invoice (Post to Finance)
• Update the RG1 Registers
• Generate Excise Invoice for Returns
• Update the RG23 Registers for Returns
2. Process – Direct Sales Export / deemed export / Transfer to

foreign warehouse
• Capture Basic Excise Duty, Education Cess, Higher Education Cess.
• Creating ARE-1 / ARE-3 documents (no Finance posting)
• Update the RG1 Registers
12.4 Excise Duty Periodic Processing

• TR6 Challan Posting with PLA Register Updating
• Utilization of CENVAT
• Monthly Return Under Rule 57AE
• Excise Register
• RG23A Part I
• RG23A Part II
• RG23C Part I
• RG23C Part II
• PLA
• RG1

13 Withholding Tax (TDS) Overview:
Income tax Annual

Returns
filling office
File
Annual
Vendor Returns
Services /
Supplies
Vendor
Deduct Tax
from Vendor or Issue TDS
Customer Certificates
Pay Tax to
Government
Bank

13.1 Withholding Tax Types
Deduction of TDS / service tax at the time of Liability posting
Deduction of TDS / service tax at the time of Payment
13.2 Recipient Types
Vendors for Tax Reporting are categorised into the following:
• Corporate (CO)
• Firm (FI)
• Individuals (ID)
13.3 Maintain Vendor Master - Withholding Tax Accounting
Withholding Tax Country - IN

Withholding Tax Type - Assign Withholding Tax Type
Withholding Tax Code - Assign Withholding Tax Code
Liable - Activate if the TDS Deductible
Recipient Type - Assign CO, FI & ID
13.4 TDS on Procurement of External Services
• MPP raises the Service Purchase Orders based on the requirement.
• A service entry sheet is filled after completion and acceptance of the service
based on the Service Purchase Order.
• On invoice verification TDS entry is posted in the system.
At the time of advance payment:
Vendor account Dr
To Bank Account Cr
To TDS Liability Account Cr
To Surcharge Liability Account Cr
To E Cess Liability Account. Cr

Or
At the time of Invoice:
Expenses Account Dr
To Vendor account Cr
To TDS Liability Account Cr
To Surcharge Liability Account Cr
To E Cess Liability Account. Cr
At the time of TDS payment to Government
TDS Liability Account Dr

Surcharge Liability Account Dr
E Cess Liability Account. Dr
To Bank Account. Cr
The withholding tax rates for MPP are as below:
W/tax
Section rate Name
With holding Tax rates for Invoice Posting for Companies

194C 2 TDS on Contractors CO
194C 10 Surcharge on TDS contractors CO
194C 2 E Cess On TDS & Surcharge of Contractors CO
194C 1 TDS on Sub Contractors CO

194C 10 Surcharge on TDS Sub contractors CO
194C 2 E Cess On TDS & Surcharge of Sub Contractors CO
194H 5 TDS on Commission & Brokerage CO

194H 10 Surcharge on TDS Commission & Brokerage CO
194H 2 E Cess on surcharge & TDS on Commission & Brokerage CO
194I 20 TDS on Rent – CO

194I 10 Surcharge on TDS Rent –CO
194I 2 E Cess on TDS & Surcharge of Rent –CO
194J 5 TDS On Professional charges CO

194J 10 Surcharge on TDS professional charges CO
194J 2 E Cess on TDS & Surcharge of Professional Charges CO

With holding Tax codes for Invoice Posting for Others
194C 2 TDS on Contractors OT

194C 10 Surcharge on TDS contractors OT
194C 2 E Cess On TDS & Surcharge of Contractors OT
194C 1 TDS on Sub Contractors OT

194C 10 Surcharge on TDS Sub contractors OT
194C 2 E Cess On TDS & Surcharge of Sub Contractors OT
194H 5 TDS on Commission & Brokerage OT

194H 10 Surcharge on TDS Commission & Brokerage OT
194H 2 E Cess on surcharge & TDS on Commission & Brokerage OT
194I 15 TDS on Rent – OT

194I 10 Surcharge on TDS Rent –OT
194I 2 E Cess on TDS & Surcharge of Rent –OT
194J 5 TDS On Professional charges OT

194J 10 Surcharge on TDS professional charges OT
194J 2 E Cess on TDS & Surcharge of Professional Charges OT

14 Tentative List of Forms and Reports
Stock Statement as per bank format

FBT
Forward Contract Monthly Report
Bills discounting Report
Bank Interest Actual Vs Computation
Prepaid Interest Report
ASN booking rate Vs Realisation Rate Report
Purchase Format 12% 4%
"C" Forms of Vendors
"C" Forms of Customers
TDS-Non Salaries & Salaries
TCS & TDS Challan
Vendor Payment Advice
Repayment &Interest Computation
ER 1 Reconciliation Plant Wise
Cash Flow
Cheque Printing-Hsbc
Cheque Printing-Canara Bank
Cheque Printing-ING Vysya
Cheque Printing-SBI Peenya
Cheque Printing- Canara Bank, Bommasandra
Cheque Printing- Canara Bank, Bommasandra - EOU
Cheque Printing- S B I Bank, E O U
VAT-100
Debit Note
Credit Note
Payment Voucher
Receipt Voucher
HSBC Bank Forms - EDI
Payment follow up - Open/Paid invoices - Customers

15 Annexure – Banker’s Invoice Customization Document

16 Legend


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Unisoft Infotech Pvt Ltd.

mySAP ECC Ver 6.0 Implementation

Maini Precision Products Pvt. Ltd.

Business Blue Print

Sign Off Document

Finance & Asset Accounting Version 3.0

Finance & Asset Accounting Version 3.0

2 Organisation Structure ............................................................................................................................9

3 FI Business Process Master List ..........................................................................................................12

4 SAP Overview .......................................................................................................................................155

4.8.2 Balance Sheet and Profit & Loss Account………………………………………………………………….19

5 General Ledger Processes Mapping ..................................................................................................211

Finance & Asset Accounting Version 3.0

5.2 Cash Management.......................................................................................................................232

5.3 Closing Operation in SAP ……………………………………………………………......23

6.1.1 Vendor Structure…...………………………………………………………………………………………..25

6.1.2 Vendor Account Group………………………………………………………………………………..…….25

6.2.2 Receipt of Material from Vendor against PO……………………………………………………………..26

6.2.3 Vendor Invoice against PO for services………………………………………………………………………….27

6.2.4 Vendor Invoice Verification…………………………………………………………………………………………….27

6.2.5 Vendor Invoice Reversing ………………………………………………………………………………………………29

6.5.1 Payment by Cheque………………………………………………………………………………………..31

6.5.2 EDI Payment Method..……………………………………………………………………………………..35

6.5.3 Methods of Payment to Vendor…………………………………………………………………………...36

6.9 Special organization consideration……………………………………………………………………….….37

7 Accounts Receivables .........................................................................................................................388

7.1.1 Customer Master Structure……………………………………………………………………………….38

7.1.2 Account Group……………………………………………………………………………………………..38

7.1.3 Customer -One Time Accounts…………………………………………………………………………….39

7.1.5 Customer Number Range Interval ………………………………………………………………………..39

7.1.6 Debtor – Creditor Adjustment………………………………………………………………………………..39

Finance & Asset Accounting Version 3.0

7.3 Debtor Account Balance ..................................................................................................................40

7.4.1 Domestic Customers – As-Is……………………………………………………………………………..40

7.4.2 Foreign Customers (Forward Contracts) – As-Is………………………………………………………..40

7.4.3 Accounts Receivables – Domestic – To-Be …………………………………………………………….41

7.4.4 Foreign Customer Realization Process – To-Be…………………………………………………………42

8 Bank Accounting ..........................................................................................................................465

8.1.1 Cheque Management..……………………………………………………………………………………..46

8.2.1 Cheque Received from customer…………………………………………………………………………47

8.2.2 Cheques issued to vendors………………………………………………………………………………..47

8.2.3 Direct Debit in Bank ………………………………………………………………………………………..48

8.2.4 Direct Credit in Bank………………………………………………………………………………………..48

9 Asset Accounting .........................................................................................................................499

9.1.1 Asset Class…………………………………………………………………………………………………. 49

9.6.1 Asset document postings -Transaction Type ………………………………………………………….54

Finance & Asset Accounting Version 3.0

9.6.2 Asset Retirement…………………………………………………………………………………………..54

9.8.1 Asset Retirement…………………………………………………………………………………………..56

9.8.2 Split in Asset…………………………………………………………………………………………………56

10.2.1 Utilization of DEPB scheme benefit……………………………………………………………………….60

11 Logistics Provision for Export Sales (Goods in Transit) ...................................................................61

12.1.1 Plant ………………………………………………………………………………………………………….61

12.1.2 Excise Registration………………………………………………………………………………………….62

13 Withholding Tax (TDS) Overview:.......................................................................................................645

14 Tentative List of Forms and Reports..................................................................................................688

Finance & Asset Accounting Version 3.0

1.2 Who should read this document

1.3 Document Derivation

MPP implementation core committee

Finance & Asset Accounting Version 3.0

Finance & Asset Accounting Version 3.0