SAP Overview

Month DD YYYY

Update Presentation Name or Confidentiality Status Under Footer Menu

May 5, 2012

Tyco Flow Control Confidential Not For Publication or Distribution

FI Overview GL

AM
FI

AR AP
Special Ledger

CON

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Financial Accounting

G/L Reporting
Legal or external reporting
Balance sheet Income Statement Statement of Financial Position

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Financial Accounting
External Accounting
Financial Position Profit & Loss Balance Sheet

Bankers, Lenders

Stockholders

External Auditors IRS, Taxing Authority

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SEC

CO/EC Overview
COMPONENT VIEW ROLE

Cost Center Acctg - CO-CCA

Internal Orders CO-OPA Projects - PS Product Costing - CO-PC Activity Based Costing Profitability Analysis-CO-PA Profit Center Acctg-EC-PCA Executive Info. System-EC-EIS
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Costs
Costs Costs Costs Costs Profits Profits Any data
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Cost Tracking
Small Projects Large Projects Product Costing Cost Management Margin by multi-cuts Profit & Loss Repsons. Cross-module reports
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Controlling

CO Reporting
Internal management reporting Reports by cost centers or other cost objects and cost elements Cost centers Orders and Projects Budget/plan Actual vs. plan

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Controlling
Internal Accounting
Departmental Expense Report Salaries 10,000 Overhead 8,000 Other 5,000 Total 23,000

Executives

Controllers

Proprietary & Confidential

Department Managers

Senior Management
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FI and CO comparison
FI
Legal or external reporting Reports by accounts Balance Sheet Income Statement

CO
Internal management reporting Reports by cost centers and cost elements Cost Center Reports

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FI/CO Organizational Structures

Client Company Chart of Accounts Company Code Business Area Credit Control Area Controlling Area

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CLIENT

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Client
Highest hierarchical level in an SAP system A complete database containing all the tables necessary for creating a fully integrated system Master records are created at the client level

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CLIENT

COMPANY

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Company
Consolidated financial statements are created at the company level A company can include one or more company codes
All company codes must use the same chart of accounts and fiscal year

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CLIENT

COMPANY

CHART OF ACCOUNTS

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Chart of Accounts
A listing of the accounts A chart of accounts must be assigned to every company code Several company codes can use the same chart of accounts
A different chart of accounts can be used if a different grouping of the chart of accounts is required

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CLIENT US CHART OF ACCOUNTS

GERMAN CHART OF ACCOUNTS

Co code 1000
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Co code 2000

Co code 3000
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Co code 4000

Co code 5000
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CLIENT COMPANY CHART OF ACCOUNTS

COMPANY CODE

COMPANY CHART OF ACCOUNTS

COMPANY CODE

COMPANY CODE

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Company Code

A BALANCED SET OF BOOKS

A required structure A legally independent entity The smallest organizational unit for which accounting can be carried out

The level where business transactions are processed The level where accounts are managed The level where legal individual financial statements, such as the balance sheet and the profit and loss statement, are created

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CLIENT COMPANY CHART OF ACCOUNTS CREDIT CONTROL AREA COMPANY CODE COMPANY CODE COMPANY CHART OF ACCOUNTS CREDIT CONTROL AREA COMPANY CODE

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Credit Control Area

An organizational unit or area of responsibility created to control customer credit limits A company code is assigned to one and only one credit control area Multiple company codes can be assigned to one credit control area

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CLIENT

COMPANY CHART OF ACCOUNTS

COMPANY CHART OF ACCOUNTS

CONTROLLING AREA
COMPANY CODE COMPANY CODE

CONTROLLING AREA
COMPANY CODE

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Controlling Area
An organizational unit defining the company's cost/ managerial accounting operations A company code is assigned to one and only one controlling area A controlling area can have multiple company codes assigned to it
This allows cross company cost allocations and reporting

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Fiscal Year Variant

DECEMBER Determines the fiscal year Calendar year or non-calendar year Allows the use of special periods to aid year-end closing Is assigned to a company 7 code

FEBRUARY
JANUARY 1 2 3 4 5 6

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Accounts Receivable Accounting

Invoices and credit memos Down payments Credit control management Handling incoming payments Payment run (bank collection) Dunning Interest calculation Account clearing

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Accounts Receivable Accounting

Accounts Receivable
Invoice/ A/R Accounting Document

Incoming Orders

Delivery

Credit Control

Payment Transactions Cash Management Dunning Notice

Account: Customer 101

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Accounts Payable Accounting

Invoices and credit memos Down payments Automatic payment run (with creation of payment media) Outgoing payments and manual bank statement handling Outgoing payments via bank collection and manual bank statement handling Account clearing

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Accounts Payable Accounting

Accounts Payable
Purchase Order

Goods Receipt

Invoice Receipt/ Invoice Verification

Cash Mgmt & Cash Mgmt & Forecast Date Forecast Date

Payment Transactions
Cash Management Payment Program

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Cash Journal Accounting

Cash payments Cash receipts Direct postings to tax accounts Postings to one-time accounts Document split postings in the cash journal Print receipts Print Cash Journal

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Components of Controlling
Cost Element Accounting Cost Center Accounting Internal Orders Activity-Based Costing ( ABC) Product Cost Controlling Profitability Analysis Profit Center Accounting

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Cost Element Accounting

It provides information which includes the costs and revenue for an organization. The cost elements are the basis for cost accounting and enables the User the ability to display costs for each of the accounts that have been assigned to the cost element. Examples of accounts that can be assigned are Cost Centers, Internal Orders, WBS(work breakdown structures).

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Cost Center Accounting

Cost Center is the area of responsibility where costs are incurred. The smallest area of responsibility within a companys overall organizational structure. Cost centers collect direct and indirect charges from financial postings or internal allocations. Only costs are collected in cost centers. Revenues are not collected. Must be assigned to a standard hierarchy structure. May define alternative hierarchy structures to support various reporting requirements. Each Cost Center is assigned to a Company Code, Profit Center.

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Cost Center Accounting

Benefits
Managers can set Budget /Cost Center targets Cost Center visibility of functional departments/areas of your business; Planning Availability of Cost allocation methods
Assessments/Distribution of costs to other cost objects.

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Internal Orders
Internal Orders provide a means of tracking costs of a specific job , service, or task They are used as a method to collect those costs and business transactions related to the task. This level of monitoring can be very detailed but allows management the ability to review Internal Order activity for betterdecision making purposes.

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Activity Based Costing

Activity-Based Costing allows a better definition of the source of costs to the process driving the cost. Activity-Based Costing enhances Cost Center Accounting in that it allows for a process-oriented and cross-functional view of your cost centers. It can also be used with Product Costing and Profitability Analysis.

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Product Cost Controlling

It allows management the ability to analyze their product costs and to make decisions on the optimal price(s) to market their products. It is within this module of CO (Controlling) that planned, actual and target values are analyzed. Sub Components: Product Cost Planning which includes Material Costing( Cost estimates with Quantity structure, Cost estimates without quantity structure, Master data for Mixed Cost Estimates, Production lot Cost Estimates) , Price Updates, and Reference and Simulation Costing. Cost Object Controlling includes Product Cost by Period, Product Cost by Order, Product Costs by Sales Orders, Intangible Goods and Services, and CRM Service Processes. Actual Costing/Material Ledger includes Periodic Material valuation, Actual Costing, and Price Changes.
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Profitability Analysis
Profitability Analysis allows Management the ability to review information with respect to the companys profit or contribution margin by business segment. Profitability Analysis can be obtained by the following methods: Account-Based Analysis which uses an account-based valuation approach. In this analysis, cost and revenue element accounts are used. These accounts can be reconciled with FI(Financial Accounting). Cost-Based Analysis uses a costing based valuation approach as defined by the User.

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Profit Center Accounting

Profit Center Accounting provides visibility of an organizations profit and losses by profit center. The methods which can be utilized for EC-PCA (Profit Center Accounting) are period accounting or by the cost-of-sales approach. Profit Centers can be set-up to identify product lines, divisions, geographical regions, offices, production sites or by functions. Profit Centers are used for Internal Control purposes enabling management the ability to review areas of responsibility within their organization. The difference between a Cost Center and a Profit Center is that the Cost Center represents individual costs incurred during a given period and Profit Centers contain the balances of costs and revenues.

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Asset Accounting
Purpose
The Asset Accounting (FI-AA) component is used for managing and supervising fixed assets with the SAP System. In Financial Accounting, it serves as a subsidiary ledger to the General Ledger, providing detailed information on transactions involving fixed assets.

Benefits
Entire lifetime of the asset from purchase order or the initial acquisition (possibly managed as an asset under construction) through its retirement. Calculate values for depreciation and interest Depreciation forecast
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Asset Accounting
Chart of Depreciation
Charts of depreciation are used in order to manage various legal requirements for the depreciation and valuation of assets. These charts of depreciation are usually country-specific and are defined independently of the other organizational units. Ex:A chart of depreciation can be used for all the company codes in a given country

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Chart of Depreciation

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Asset Accounting
Process Flows:
Acquisition from purchase with vendor Acquisition with Automatic Offsetting Entry Retirement with revenue Asset Sale without customer Post-Capitalization Write-Ups Settlement Assets Under Construction Down Payment Request for Assets under Construction Depreciation Posting Run Posting Acquisition and Production Costs Values Depreciation Simulation/Primary Cost Planning

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