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Postings To CO From Other Modules: Unit Contents

Posting From Other Modules

Sales Order / Procurement

(C) SAP AG TACO40 15-1

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Postings To CO From Other Modules: Unit Objectives

Name the typical feeder systems that post data to CO.

Explain the process of sales and the process of goods receipt

At the conclusion of this UNIT, you will be able to:


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Postings To CO From Other Modules:BusinessScenario

Your review now takes you to an analysis of how the transaction data finds its way into CO. This is done in conjunction with the auditors from the CPA firm who are attempting to document the data flow.

As you learned at the beginning of your assignment, FI is a primary source of data postings to CO. But as you dig deeper, you find that other application components are major contributors as well, such as MM, Asset Accounting, and HR.

You are also responsible for evaluating the use of real and statistical controlling objects in the transaction postings, based on information requirements. And you are required to explain to the auditors the use of commitments as a cost control tool.

Actual cost and revenue entry enables you to monitor and trace costs and revenues incurred by your company as they occur. This allows you to identify variances to plan costs and revenues quickly and take appropriate action.

The control of actual costs and revenues is supported by delivered and user-definable reports. Reporting covers periodic actual cost/revenue statements, plan/actual comparisons, and comparison reports based on periodic actual/actual comparisons (for example, you can compare the actual costs of the previous period with the actual costs of the current period).

Actual cost/revenue entry involves transferring the primary costs recorded in Financial Accounting (FI) to the Controlling (CO) application component. In the CO component, this transfer occurs real-time from the components FI, MM, SD, and AM, whereby a cost accounting object (such as a cost center, a profitability segment or an internal order) is recorded during account assignment.


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Posting Logic

G/L Account (P&L)420000

Amount

Controlling ObjectCost Element(420000)

CO Document # 1000000009

FI Document # 1200000089

G/L Account (Bal. Sheet)113100

Amount

Amount

FI Data Entry:Line item 001- G/L Account 420000

(P&L)- Amount- Controlling ObjectLine item 002- G/L Account 113100

(Bal. Sheet)- Amount

When an FI document is created that posts to an expense (or revenue) account having a corresponding cost element, and a valid controlling object (such as a cost center) is identified for the expense line item, a controlling document is also created.

This CO document has its own unique number and contains the following details: controlling object posted to the cost element used the amount

In the above example, the FI document debited a P&L account and credited a Balance Sheet account. The CO document debited the controlling object (using the corresponding primary cost element of the same number). Note that there is no corresponding credit entry in the CO document.

When a primary cost is initially posted into CO, it is treated as a one-sided journal entry, unlike a traditional balanced financial accounting journal entry. (Note that as any subsequent cost movements occur within CO, the transactions creating these cost flows are balanced entries. When a cost is moved from one controlling object to another, such as from one cost center to another, the sending object is credited, and the receiving object is debited for the same amount.)


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Posting to a Cost Center

FIFI

COCO

Income statement account Balance sheet account

Cost origin: Cost center XY

Cost Center XYCost Center XY

Debit under a costelement- Real costs

Debit under a costelement- Real costs

Optional:Further Cost ObjectsOptional:Further Cost Objects

Debit under a cost element, statistical:- Statistical order- Statistical project- Profit center- . . .

Debit under a cost element, statistical:- Statistical order- Statistical project- Profit center- . . .

optional

additional

~~ ~~

In this simple example, the cost center is entered in the FI document as the account assignment object. The cost center is a real CO object, and in this example, since the cost center is the only real account assignment object in the FI document, the cost posting is a real posting.

If the cost center has a profit center assigned in its master record, a statistical posting is also made to that profit center.


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Management of Resources/Processes

SUPPLIERSSUPPLIERS

PERSONNELPERSONNEL

FIXEDFIXEDASSETSASSETS

CUSTOMERSCUSTOMERS

ProcurementProcurement ProductionProduction SalesSales

G / L

COTR

InventoryInventory

Financial Accounting monitors the firm's resources used to perform its value adding processes. It also monitors the level of these resources in order to maintain stable and optimum balances. Too little or too much of any one resource results in an opportunity cost to the firm.

Therefore it is important for those working in the financial modules to have an understanding of the flow to the processes and the flow of documents that will result from those processes since they will be responsible for reporting the results and communicating with vendors and suppliers.


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Document Flow Within R/3

Accountingdocument

Profit Center DocumentProfit Center Document

Consolidation DocumentConsolidation Document

Cost Accounting DocumentCost Accounting Document

Purchase order1

2

Goods receipt

Original Document

Additional Accounting Documents

A business event is tracked in R/3 through the use of documents. Documents are linked to provide complete information about an event to the end user.


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SD Document Flow in the R/3 SystemInvoiceDeliveryOrder

Document flow of a sales orderDocument flow of a sales order

Order 900Order 900. Delivery 80000459. Delivery 80000459. . WMS transfer order 1000000062. . WMS transfer order 1000000062. . GD goods issue: delivery 49001828. . GD goods issue: delivery 49001828. . Invoice 90000333. . Invoice 90000333. . . Accounting document 100000276. . . Accounting document 100000276

Sales documents represent transactions in the system. The transactions form a chain of related documents. The entire chain of documents creates a document flow. The system copies data from one document into another to reduce

manual data entry and make problem solving easier.

Accountingdocument

Since the customer order management (COM) process has many steps, there is a feature in SD called document flow that allows you to view all documents associated with the sales order in one location.

Document flow highlights the seamless integration that occurs in R/3. This slide highlights one example in SD. Many times activity in one application will cause entries in another application. Most FI entries are generated based on activity in other applications like MM or SD.

You can view each document in the flow by selecting the DISPLAY DOCUMENT pushbutton for the sales order.

For SD documents, the data is entered into the order then automatically copied to the delivery then to the billing and finally the accounting document. Since the documents are copied, it is imperative that master records have accurate data.

Document flow is available when viewing the order, delivery, billing and accounting documents. Document flow from the billing document combines all the delivery documents under the delivery

document.


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Business Process in COM Cycle

Pre-Sales ActivitiesPre-Sales Activities

Sales Order ProcessingSales Order Processing

Inventory SourcingInventory Sourcing

DeliveryDeliveryPaymentPayment

BillingBilling

Invoice

The customer order management Process or sales order process consists of 6 stepsPre-sales Activities - Sales Inquiry or QuoteSales Order ProcessingInventory SourcingDeliveryBillingCustomer Payment

Pre-sales activities may include mailing lists, telephone call records,inquiries or quotations. Some customers may decide not to track the pre-sales activities in R/3 which means the first step may be omitted. If you use pre-sales activities, the data can originally be entered in the sales inquiry then copied to the quote and finally copied to the sales order.

SAP strives to have data only entered once. For the COM cycle, the sales order data is copied into the delivery which is then copied to the billing document and finally some data is copied to the accounting entry.


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Creating a Sales Order

Create a Sales Order Ides receives an order Ides receives an order from Custfrom Cust--99, Motomart 99, Motomart

Pick 10 helmets, Ship from Pick 10 helmets, Ship from point 1000point 1000Pick & Ship the Order

Create Billing Document Invoice Customer and Invoice Customer and review A/R balancesreview A/R balances


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Sales Order Processing Customers place orders with a customer service

representative.

Standard orders normally contain: Customer and material information Pricing conditions for each item Schedule lines and delivery information Billing information

Typically the sales process begins when a customer service representative receives an order over the telephone from a customer.

Basically, the only required information to place a sales order is the customer, material and quantity. Other information can be required based on customizing. The sales order stores a wealth of information most of which is found or derived from the customer and material master record.

When the order is created, the system checks to ensure that the order quantity is available for delivery on the required delivery date in the appropriate plant. This is referred to as Inventory Sourcing.

Based on customizing in SD, pricing is determined in the order and can be modified in many cases. Billing information such as billing schedule is copied to the order from the customer master.


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Delivery

..........................

..........................

..........................

. . . . . . .

. . . . . . .

Warehouse

Packing

Shipping papers Goods issue

Salesorder

Picking

Update stock Post general ledger

Delivery

Create delivery

..........................

..........................

..........................

. . . . . . .

. . . . . . .

..........................

..........................

..........................

. . . . . . .

. . . . . . .

Deliveries usually create three documents: delivery note, picking list and post a goods issue document.

The delivery note is created showing all materials in the order that are eligible for delivery on a given date.

The picking list is created for the warehouse showing all deliverable materials and quantities along with the warehouse storage location. The picking quantity must match the delivery quantity even in cases where the order is not fully delivered.

Based on the picking quantity, the post goods issue document is created. This is the first accounting entry made and recognizes the release in inventory. Typically the debit is to cost of goods sold and the credit is to inventory. The journal entry automatically posts to accounting based on automatic account assignments.

Note, service based companies can bypass the delivery step and bill customers based on sales orders.


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Billing

Invoice

Billing supports: Creating invoices for deliveries and

services Creating credit and debit memos

on the basis of requests Canceling business transactions Transferring billing data to

financial accounting

The billing step has two primary functions: create the customer invoice and the accounting journal entry for revenue.

Canceling billing documents is usually done for error correction. Billing is generally the last SD step of the COM process. After the invoice is created, accounting

usually assumes responsibility for the receivable. The general ledger accounts are determined based on revenue account determination in SD.


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Interface to Accounting

When saving an invoice, the system automatically generates an accounting document, which updates the corresponding general ledger accounts.

Invoice

Amount: 100

Invoice

Amount: 100

Accounting

100Upon posting

Typically, the billing document will create the accounting journal entry recognizing revenue. The journal entry includes a debit to the customer and a credit to the revenue account. Note, the release of inventory and recognition of revenue take place in separate steps in SD. Companies coordinate these two steps to minimize accounting differences.

It is possible to have the billing step block the creation of the accounting entry.


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Payment

Final step of the COM cycle

Customer payment includes: posting payment against invoices

reconcile differences if necessary

When customers make payments the incoming payment is matched against the open invoices and cleared. Clearing means that an invoice has been completely matched with an incoming payment and moved to the cleared item section.

There are two common methods of handling payment differences: partial payments and residual items.

SAP offers several automated incoming payment options .


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Example - Selling Goods

PPPP

Production

COCO--PCPC

ProductCosting

COCO--PAPA

ProfitabilityAnalysis

Billing Document

Cost of Goods Sold

Production Variances

Sales order

Item 10

99 pumps

Sales order item:

The sales order item is related to products, which we product in a make to stock environment.The production process is controlled by a production lot, which delivers the finished goods to warehouse unrestricted stock, for sale at a later time.

In this case, the sales order item is not a cost object. The products are shipped to the customer without postings to CO. When the billing document is

created in SD, revenues and cost of goods sold postings are made to Financial Accounting and to CO-PA.

Since the sales order item is not a cost object in this scenario, the revenues will be transferred directly to profitability analysis (CO-PA) during the billing process. The cost of goods sold posting to CO-PA is based on a cost estimate created previously in Product Cost Planning. Production variances are transferred to PA during settlement of the production order.


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Materials Management Overview

SalesInternal and external accounting

MRP

Invoiceverification

Invoicereceipt

?

Inventorymanagement

Goodsreceipt

Goodsissue

Transferposting

Warehousemanagement

A

B

External procurementPurchasing

Internal procurementProduction

Goods can be obtained either externally or internally to satisfy MRP requirements. Either path results in a series of transactions affecting accounting.


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External Procurement Processing

1. Do we need goods/ service ?1. Do we need goods/ service ?2. Purchase request2. Purchase request

3. Delivery of material is recorded as a Goods receipt

3. Delivery of material is recorded as a Goods receipt

5. Payment5. Payment

4. Invoice verification4. Invoice verification

Invoice

Either the purchasingdepartment or R/3 system determines supply source

Accounts Payable

Purchasing department

Receiving dock

Purchasing department


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Material documentMaterial document

Accounting documentAccounting document

G/L accounts:Stock account Consumption account

...

G/L accounts:Stock account Consumption account

...

Goods receipt slipGoods receipt slip

R/Mail to the ordererR/Mail to the orderer

Quality management:Inspection lotQuality management:Inspection lot

Goods receipt

Stock quantityConsumption statistics ...

Stock quantityConsumption statistics ...

Purchasing data:Purchase order itemPurchase order history ...

Purchasing data:Purchase order itemPurchase order history ...

Warehousemanagement:Transfer requirement

Warehousemanagement:Transfer requirement

Point of consumption:Cost centerInternal order ...

Point of consumption:Cost centerInternal order ...

Effects of a Goods Receipt Posting


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Invoice Verification

Purchase Order

Open vendor items

Invoice verification

?=

VendorInvoice

Purchase order

Vendor

Goodsreceipt

Invoice Verification allows one way, two way and three way matching.


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Postings To CO From Other Modules: Unit Summary

Name the typical feeder systems that post data to CO.

Explain the process of sales and the process of goods receipt.

Having completed this UNIT, you should now be able to:


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