Ganesh Ravula What is ERP ?

Page 1

ravula29@yahoo.co.uk

ERP (enterprise resource planning) is an industry term for the broad set of activities supported by multi-module application software that help a manufacturer or other business manage the important parts of its business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. Enterprise Resource Planning - an industry term for the broad set of activities supported by multi-module application software that helps a manufacturer or other business manage the important parts of its business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business. Typically, an ERP system uses or is integrated with a relational database system. The deployment of an ERP system can involve considerable business process analysis, employee retraining, and new work procedures. A business strategy that integrates manufacturing, financial and distribution functions to dynamically balance and optimize the enterprise's resources. An integrated application software suite that balances manufacturing, distribution and financial business functions. ERP is the technological evolution of manufacturing requirements planning (MRP) II through the introduction of relational database management systems (RDBMSs), computer-aided software engineering (CASE), fourth-generation language (4GL) development tools and client/server architecture. When fully implemented, ERP can enable enterprises to optimize their business processes and allows for necessary management analysis and appropriate decision making in a quick and efficient manner. As more-robust technology is implemented, ERP improves an enterprise's ability to react to market changes. Enterprise Resource Planning The terms ERP and Enterprise Resource Planning have become somewhat over generalized. Previously it stood for a single software product that combined the planning functionality of finance, order fulfillment, and manufacturing across the enterprise. A few companies still classify their product offering as ERP. However, as ERP implementations proved costly and difficult, due in part to their monolithic and inflexible nature, many new entrants and competitors offered 'suites' of applications which did more functions but in discretely implementable steps. For marketing purposes, vendors have repositioned these suites of products as both ERP for the general product line and other catchwords (CRM, SCM, Manufacturing, Financial, HR) for specific modules or suites. The result has been a loss of meaning for ERP. Enterprise Resource Planning. It is a software solution that integrates information & processes, enabling data entered once into the system to be shared throughout an organization.

Page 1 of 14

Ganesh Ravula ERP = Enterprise Resource Planning.

Page 2

ravula29@yahoo.co.uk

Enterprise resource planning software is an integrated software package that unites several of the most important demands needed to run an enterprise, like: -administration -customer resource management -finances -human resources -logistics (transport, distribution, ...) -planning -production -sales and in case of a multinational company this possibly also on a worldwide scale (so in order to let people communicate on a global scale over the 5 continents) using e.g. -distributed computing (whereby two or more computers (mainframe, workstation, desktop, ...) on possibly one or more operating systems (S390, Unix, Linux, Microsoft Windows, ...), and using several computer languages (e.g. C++, Java, .NET, ...) are connected and working together) -multilingual (possibilities for versions in English, French, German, Norwegia, Swedish, Japanese, Chinese, ...) This enterprise resource planning software is developed currently mainly by: -Baan (the Netherlands) -Oracle (USA) -Peoplesoft (USA) -SAP (Germany) -Siebel (USA)

Page 2 of 14

Ganesh Ravula ERP History 1960s

Page 3

ravula29@yahoo.co.uk

1970s 1972 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1987 1988 1990

1991

Enterprise Resource Planning (ERP) is born in the early 1960s from a joint effort between J.I. Case, the manufacturer of tractors and other construction machinery, and partner IBM. Material Requirements Planning or MRP is the initial effort. This application software serves as the method for planning and scheduling materials for complex manufactured products. Initial MRP solutions are big, clumsy and expensive. They require a large technical staff to support the mainframe computers on which they run. Five engineers in Mannheim, Germany begin the company, SAP (Systemanalyse und Programmentwicklung). The purpose in creating SAP is to produce and market standard software for integrated business solutions. Richard Lawson, Bill Lawson, and business partner, John Cerullo begin Lawson Software. The founders see the need for pre-packaged enterprise technology solutions as an alternative to customized business software applications. In the manufacturing industry, MRP (Material Requirements Planning) becomes the fundamental concept used in production management and control. Jack Thompson, Dan Gregory, and Ed McVaney form JD Edwards. Each founder takes part of their name to create the company moniker. Larry Ellison begins Oracle Corporation. Jan Baan begins The Baan Corporation to provide financial and administrative consulting services. Oracle offers the first commercial SQL relational database management system. JD Edwards begins focusing on the IBM System/38 in the early 1980s. MRP (Manufacturing Resources Planning) evolves into MRP-II as a more accessible extension to shop floor and distribution management activities. Baan begins to use Unix as their main operating system. Baan delivers its first software product. JD Edwards focuses on the IBM System/38. Oracle offers both a VAX mode database as well as a database written entirely in C (for portability). Baan shifts the focus of their development to manufacturing. JD Edwards is recognized as an industry-leading supplier of applications software for the highly successful IBM AS/400 computer, a direct descendant of the System/38. PeopleSoft is founded by Dave Duffield and Ken Morris in 1987. PeopleSoft's Human Resource Management System (HRMS) is developed. Baan software is rolled out to 35 countries through indirect sales channels. The term ERP (Enterprise Resource Planning) is coined in the early 1990's when MRPII is extended to cover areas like Engineering, Finance, Human Resources, and Project Management. PeopleSoft sets up offices in Canada. This leads the way to their presence in Europe, Asia, Africa, Central and South America, and the Pacific Rim.

Page 3 of 14

Ganesh Ravula 1995 1999

Page 4

ravula29@yahoo.co.uk

Baan grows to more than 1,800 customers worldwide and over 1,000 employees. JD Edwards has more than 4,700 customers with sites in over 100 countries. Oracle has 41,000 customers worldwide (16,000 U.S.). PeopleSoft software is used by more than 50 percent of the human resources market. SAP is the world's largest inter-enterprise software company and the world's fourth largest independent software supplier overall. SAP employs over 20,500 people in more than 50 countries. To date, more than 2,800 of Baan's enterprise systems have been implemented at approximately 4,800 sites around the world. 2000 and Most ERP systems are enhancing their products to become "Internet Beyond Enabled'' so that customers worldwide can have direct access to the supplier's ERP system. Advantages of ERP : It integrates all functions at different locations so there is no redundancy of job. Faster Transactions and information availability. Less dependency on Manpower. Best Business practices.

What is SAP?

Page 4 of 14

Ganesh Ravula

Page 5

ravula29@yahoo.co.uk

SAP is the abbreviation of Systeme, Anwendungen, Produkte in der Datenverarbeitung (System Application Product) and is a company created by the 5 SAP founders : * Claus Wellenreuther * Dietmar Hopp * Hans-Werner Hector * Hasso Plattner * Klaus Tschira who all five worked for IBM before as managers, then went on to create their own company in Waldorf (Germany) in 1972. The SAP Company focuses on the creation of enterprise resource planning (=ERP) software, in which it currently is the market leader. R/3 stands for Tier 3 which has front end as GUI, Middle-end as Application Server and Backend as Database.

History of SAP
In 1972, five systems analysts began working nights and weekends to create standard software with realtime data processing. Twenty-five years later their vision is a reality: SAP is the worlds market and technology leader in business application software. On April 1, 1972 five former IBM employees founded SAP as System analyse und Programmentwicklung (Systems Analysis and Program Development) in Mannheim, Germany. Their vision was to develop and market standard enterprise software which would integrate all business processes. The idea came to them through their work as systems consultants for IBM when they noticed that client after client was developing the same, or very similar, computer programs. The second part of their vision was that data should be processed interactively in realtime, and the computer screen should become the focal point of data processing.

From a start-up software vendor to global market leader Over the course of twenty-five years, their vision has transformed SAP from a small regional enterprise into a world-class international company. Today, the SAP Group is the global market leader in enterprise resource planning software, and has subsidiaries, affiliates and branch offices in nearly every industrial nation in the world. Important milestones in the company's corporate history include its conversion to a GmbH (a closely-held corporation) in 1977, the opening of the company's headquarters in Walldorf, and its conversion into a publicly-held corporation whose shares are listed on several stock markets. By changing its structure to a publicly-held corporation, SAP significantly strengthened its capital base and laid the foundations for its employees to enjoy more of a share in the company's success. In the end, it is SAPs employees currently more than 9,000 of them - whose knowhow, motivation and performance have nurtured the companys progress. And it is their commitment and innovative drive which will pace the companys future success and keep it ahead of the competition.

Page 5 of 14

Ganesh Ravula

Page 6

ravula29@yahoo.co.uk

Over one million R/3 users Products have played the central role in SAP's success story. In this area, two milestones stand out: first, the development and 1979 market release of the R/2 software system for mainframes, and, second, the R/3 client/server software system introduced in 1992. Since its debut, the R/3 System use has grown explosively and now accounts for the lion's share of SAP product sales. At present, more than one million end users around the world work with the R/3 System. The development of SAP products has continually benefited from major advances in the hardware sector. Back in 1972, the limited storage capacity of computers posed one of the biggest challenges. In those days, mainframes only had 500 kilobytes of storage capacity. Slow data input and output meant that only partial applications with a limited data volume were feasible. It was against this technological background that SAP signed its first customer, the German ICI subsidiary in stringen. With the successful implementation of its initial project, SAP had nine employees and, at the end of its first fiscal year, posted a profit on revenues of DM 620,000. In the second year of operation, two local businesses the tobacco and cigarette manufacturer Roth-Hndle and the pharmaceutical company Knoll - selected the newly developed SAP Financial Accounting (RF) System. This system quickly earned a reputation as an excellent standard package and installations expanded to 40 customers. But product development did not slow on this success, and a second standard product, the Materials Management (RM) System, with modules for purchasing, inventory management and invoice verification, soon followed. The benefits of SAP's integration philosophy showed through, with data from Materials Management flowing straight into Financial Accounting.

SAP moves to Walldorf In its fifth year of operations, SAP became a GmbH (a closely-held corporation) and took on a new name: Systeme, Anwendungen, Produkte in der Datenverarbeitung ("Systems, Applications, Products in Data Processing"). Revenues were now close to DM 4 million, and the number of employees had grown to 25. In 1977, SAP moved its offices and headquarters to Walldorf. In the same year, it signed its first two foreign customers, two companies from Austria. Just one year later, the customer base had grown to 100 and the number of employees stood at 50. SAP had also introduced another central module of the SAP System Asset Accounting (RA). At the same time, through the development of a French version of the accounting module, SAP made additional steps toward the international markets. By the end of the 1970s, new generations of powerful computers provided the framework for a comprehensive software system, and a major step in the development of SAP software - the R/2 System was taken in 1978. In the same year, as sales headed toward the DM 10 million milestone, SAP began operation of its own computer center in Walldorf which, when completed in 1980, united development teams under one roof. That year SAPs software became even more attractive with the addition of order history to the product range. At the end of 1980, 50 of the 100 largest industrial companies in Germany were SAP customers.

R/2 System goes international SAPs close relationships with customers led to continuous enhancements in the existing program modules, while important new additions were made, such as the Cost Accounting (RK) System. The R/2 System was now ready for the international market. New computers with drastically improved price/performance ratios helped expand the customer base, and SAP raised its profile still further by appearing at the Systems trade fair in Munich - the company's first-ever presence at an industry trade show.

Page 6 of 14

Ganesh Ravula

Page 7

ravula29@yahoo.co.uk

In 1982, SAP celebrated its tenth anniversary, with sales soaring 48% to over DM 24 million. By the end of the year, 236 companies in Germany, Austria and Switzerland were working with the SAP standard programs. Sales continued to climb in the following year, increasing by 45%. In 1984 SAP took additional steps into the international arena with the founding of SAP (International) AG in Switzerland, whose focus was to increase sales of the R/2 System in international markets. Development teams began work on two new applications, Personnel Management and Plant Maintenance, while the Production Planning and Control System was installed at its first pilot customers. 1985 was characterized by further expansion. The Walldorf headquarters had grown to 10,000 square meters of space, while at the Swiss subsidiary a new headquarters was occupied. SAP systems were now in use in most European countries, and SAP began to penetrate markets outside Europe - with customers in South Africa, Kuwait, Trinidad, Canada and the US. The DM 100 million sales mark exceeded SAP continued to pursue international growth with the founding in 1986 of SAPs Austrian subsidiary SAP sterreich Ges.m.b.H. in Vienna. At the parent company, SAP GmbH, the capital stock was increased from DM 500,000 to DM 5 million. The largest single hardware investment to date was made in Walldorf with the installation of an IBM mainframe costing DM 7 million. The year's sales topped DM 100 million, and SAP exhibited at CeBIT, the world's largest IT trade fair, for the first time. The 15th year of the company's history was again characterized by powerful growth. Branch offices were opened in Munich and Hamburg, and subsidiaries established in four European countries - the Netherlands, France, Spain and the UK. Staff grew to 750, and sales more than doubled to DM 245 million, with 850 companies now using SAP's software systems. In 1987, SAP announced its strategy for a new generation of software, and the R/3 System was born.

SAP goes public SAP continued to grow in 1988 with the international sales network strengthened by the establishment of subsidiaries in Denmark, Sweden, Italy and the US. Other events included: the founding of SAP Consulting GmbH as a joint project between SAP and the consulting firm Arthur Andersen; the opening of an International Training Center in Walldorf; and the welcoming of Dow Chemical as SAPs 1,000th customer. However, the most significant events of the year were the increase of SAPs capital stock from DM 5 million to DM 60 million, the subsequent conversion of SAP GmbH into a stock corporation, SAP AG, and the flotation of SAP shares on the stock market. SAP shares were quoted on the securities exchanges in Frankfurt and Stuttgart. During the next year, 1989, SAP shares began trading on the Zurich stock exchange. SAP expanded its alliance and strategic cooperation approaches by taking a majority investment in TOS GmbH in Freiberg. Through the "International User Conference" in Lausanne, Switzerland, and the first "SAPPHIRE" user conference in North America, SAP demonstrated its solid commitment to direct international customer contact. This crucial commitment was to become more and more important to SAPs success in the coming years.

Over 1,000 employees SAP (International) soon grew to twelve subsidiaries, including Canada, Singapore and Australia. SAP's growing profile in 1989 was evidenced by a number of events: the large number of participants attending the first Annual Stockholders' Meeting, the strong employee growth to more than 1,000, and the expansion of the customer base. Recognizing this success manager magazin

Page 7 of 14

Ganesh Ravula

Page 8

ravula29@yahoo.co.uk

named SAP "Company of the Year" a distinction SAP would receive twice more in the next few years. In 1990, SAP's capital stock was expanded to DM 85 million with the issue of preference shares. SAP strengthened its commitment to small- and medium-sized businesses by an investment in the software company Steeb and the acquisition of software vendor CAS. In the same year, SAP and Siemens Nixdorf founded SRS GmbH in Dresden, gaining a firm foothold in the East German market. Sales grew strongly to over DM 500 million, and the number of staff grew to 1,700.

SAP develops Russian R/2 version Strong growth continued unabated in 1991. The acquisition of Steeb GmbH was completed and its activities were merged with CAS to form STEEB-CAS GmbH, creating a high-caliber software company with an attractive product offering for the small- and medium-sized company market. With SAPs Eastern European business developing quickly, SAP collaborated with a local Russian software company to develop an R/2 version in Russian. The first Japanese installation of SAP software was successfully completed. At the end of the fiscal year, the SAP Group boasted 2,225 customers in 31 countries and sales of more than DM 700 million an increase of over 40 percent. The company had more than 2,500 employees. In its twentieth year, SAP opened a new Development and Sales Center in Walldorf. The twoyear project cost roughly DM 140 million and represented the company's largest single investment to date. In preparation for additional development, SAPs share capital was expanded by DM 15 million to DM 100 million through the issue of 300,000 preference shares. SAP was now firmly established as a global company, with South Africa, Malaysia and Japan the newest additions to its 15 subsidiary companies. By 1992, almost half of the DM 831 million in product revenues were being generated outside Germany, and the availability of the software in 14 different languages was adding significantly to its attractiveness.

Shipment of the client/server system R/3 With the R/3 System release in mid-1992, SAP began to penetrate the mid-size market, and into branches and subsidiaries of large companies. The release of the R/3 client/server system was the most significant event in SAPs history and started a record of growth that even SAPs most optimistic planners had not predicted. SAP took top position among German software vendors in 1993. On an international scale, the company moved to 7th place among software companies, establishing a clear lead in the global business applications software market. Sales surpassed the important DM 1 billion mark for the first time in 1993, and the global customer base stood at 3,500 companies. SAP made an investment in iXOS Software GmbH with the aim of developing and marketing graphical user interfaces and optical archiving of documents.

New development center in Foster City, California Releases 2.0 and 2.1 provided R/3 users with even more functionality. With the R/3 System already running on six hardware platforms, SAP and Microsoft signed an agreement to port R/3 to Windows NT. Other events included: the founding of SAPs 18th subsidiary in the Czech

Page 8 of 14

Ganesh Ravula

Page 9

ravula29@yahoo.co.uk

Republic, the establishment by SAP America of a development center in Foster City in Silicon Valley, California, and the introduction by SAP Japan of a Kanji version of R/3. 1994 was yet another record-breaking year with sales jumping 66% to over DM 1.8 billion. By the end of the year, SAP employed more than 5,000 staff worldwide, and 200 of the more than 4,000 customers were using the R/3 System in production operation. A Swiss customer was the first customer to go live with R/3 on Microsofts Windows NT a mere four months after the platform became available. Since its rollout in 1992, R/3 had now been installed more than 1,000 times. SAP development received ISO 9000 certification, and R/3 Release 2.2 was completed on schedule and included a wide range of enhancements in Logistics. SAP continued to expand its sales organization and strategic alliances. In Germany, SAP acquired a 52% stake in DACOS Software GmbH with the aim of developing an integrated software solution for the retail industry. The 19th subsidiary opened in Mexico City. The Annual Stockholders' Meeting agreed to a DM 400 million capital increase out of retained earnings, bringing total capital to DM 500 million. The resulting 1:4 stock split was positively received by the market and led to a significant increase in stock price levels.

Microsoft chooses R/3 More than 6,000 companies of all sizes were among SAP customers in 1995, some two-thirds of which solved their IT tasks using the R/3 System. During the year Microsoft joined IBM as an R/3 customer from the high-tech sector. In 1995, R/3 became the largest source of overall revenues, with a DM 1.7 billion share of total sales of DM 2.7 billion. Growth prospects were strengthened still further with the new R/3 Release 3.0, a functional and technical milestone in R/3 development. With this version the important areas of production planning and control were now comprehensively covered. Another technical addition was the availability of R/3 on the widely used IBM AS/400 platform. The indirect sales channel concept was introduced in Germany, with SAP forming partnerships with value-added resellers so as to better support small- and medium-sized businesses. A new Service and Support Center opened in Walldorf with room for some 750 employees. SAP now employed more than 7,000 staff.

Global profile: SAP represented in 40 countries In 1995, SAP further increased its international activities with new subsidiaries formed in China, Argentina, Brazil, Korea, Poland, Russia and Thailand. SAP was now represented in over 40 countries by subsidiaries, branch offices or partner companies. An industry solution for the process industry (eg., chemicals, pharmaceuticals, food and beverage industry, and semiconductors) was announced in the US. With 1,400 stockholders and guests, the number of attendees to the 1995 Annual Stockholders' Meeting was more than triple the 1994 figure, and the ASM approved changing the par value of SAP shares from DM 50 to DM 5. Shortly thereafter SAP entered the German stock index (DAX). Both events had a positive effect on share prices.

Page 9 of 14

Ganesh Ravula

Page 10

ravula29@yahoo.co.uk

Sales reach DM 3.7 billion in SAP's anniversary year SAP's success continued into its 25th year of operations, with sales exceeding DM 3.7 billion. Over the course of its 25-year history, SAP showed that business processes can be modeled in a standard way across and within industry sectors. When the IT industry developed a flexible and cost-effective client/server architecture, SAP provided its customers with the right product at the right time - the R/3 client/server system.

R/3 becomes Internet-enabled The success of R/3 has propelled SAP to the top of the global software market. IT is undergoing yet another revolution with the advent of the Internet, and SAP is again there with a solution: the latest version of R/3 provides the first comprehensive, Internet-enabled business application package. Release 4.0, which is already in development, further increases the attractiveness of the R/3 System by making it more user-friendly. Small and mid-sized businesses should especially welcome this development. The R/3 System is here to stay, and users can look forward to its continuing enhancement.

Advantages of SAP : It integrates all functions at different locations so there is no redundancy of job. Faster Transactions and information availability. Less dependency on Manpower. Best Business practices. Accelerated System Application Product (ASAP) Implementation of SAP in an organization may take approximately eight to twelve months. ASAP defines a roadmap to implement SAP effectively and cost efficiently. Phase 1 : Project Preparation Phase 2 : Business Blueprint Phase 3 : Realization Phase 4 : Final Preparation Phase 5 : Go Live & Support

Phase 1 : Project Preparation In this phase of the ASAP Roadmap, decision-makers define clear project objectives and an efficient decision-making process. Here project organization and roles are defined and implementation scope is finalized. Phase 2 : Business Blueprint Page 10 of 14

Ganesh Ravula

Page 11

ravula29@yahoo.co.uk

In this phase scope of the R/3 implementation is defined & Business Blueprint is created. Business Blueprint is a detailed documentation of companys requirements. Phase 3 : Realization The purpose of Phase 3 is to configure the R/3 System. The configuration is carried out is two steps; baseline configuration & Final configuration. Phase 4 : Final Preparation The purpose of this phase is to complete the final preparation of the R/3 system for going live. This includes testing, user training, system management and cutover activities, to finalize your readiness to go live. Phase 5: Go Live & Support During this phase, the first Early Watch session should be held, where experts from SAP analyze the systems technical infrastructure. The aim is to ensure the system functions as smooth as possible. Basic Steps of SAP FICO( Financial Accounting & Controlling ) There are two target groups that use information from financial Accounting : External Users : These users usually require published information in conformance with legal requirements. This data is managed in the application FI Financial Accounting. Internal Users : These users may come from any level in the organization. They need information about the internal operations of the organization. This data is stored in the application CO controlling.

General ledgers and Subledgers The General Ledger (G/L) contains records of all posting relevant business transactions in G/L Accounts. In order to get a better overview, the general ledger frequently contains only collective postings. In these cases the individual posting data is recorded in Subledgers, which then forward their data to the general ledger in summarized form. The Accounts Payable Accounting (AP) records all business transactions that affect the relationships to vendors. It gets a lot of its data from purchasing ( MM Materials Management ). The Accounts Receivable Accounting (AR) records all business transactions that affect the relationships to customers. It gets a lot of its data from Sales and Distribution (SD). The Asset Accounting (AA) records all transactions that are related to the management of assets. The Travel Management (TV) manages and calculates travels costs and supports travel planning and invoicing. Page 11 of 14

Ganesh Ravula

Page 12

ravula29@yahoo.co.uk

The Bank Ledger (BL) supports the posting of cash flow. All item postings posted to expense accounts automatically forward the expenses as costs to Controlling (CO). The balances of the G/L accounts serve to create balance sheets as well as profit and loss statements. Steps to Create a Company in FI 1. Company Code : is an independent accounting entity in R/3, for example a company within a corporate group. It is designated by a four-digit alphanumeric key. Balance sheets and profit & loss statements required by law are created at the company code level. 2. Business Area : A companys areas of responsibility or industries can be created as business areas in the R/3 system and offer an additional evaluation. It is optional. 3. Client : is the highest level in the R/3 system hierarchy. Specifications or data that is valid for all organizational units in all R/3 applications are entered at the client level, eliminating the need to enter this information more than once ex. Exchange rates. Path : I. SPRO-> Enterprise Structures->Definition->Financial Accounting -> (a). Define Company. (b). Define Credit Control Area (c). Edit, Copy, Delete & Check Data (d). Define Business Area (e). Define Consolidated Business Area II. SPRO-> Enterprise Structures->Assignment->Financial Accounting -> (a). Assign Company code to Company (b). Assign Company code to Credit Control Area (c). Assign Business Area to Consolidated Business Area 4. Variant Principle : is a three step method used in R/3 to assign special properties to one or more R/3 objects. The steps are : i. Define the variant ii. Populate the variant with values iii. Assign the variants to R/3 objects This principle is used for : Fiscal Year Posting Periods Field Status Path : I. SPRO-> Financial Accounting ->Financial Accounting Global Settings->Fiscal Year-> (a). Maintain Fiscal Year (OB29) Page 12 of 14

Ganesh Ravula

Page 13

ravula29@yahoo.co.uk

(b). Assign Company Code to Fiscal Year Variant II. SPRO-> Financial Accounting ->Financial Accounting Global Settings>Documents->Posting Periods-> (a). Define Variant for Posting Periods (b). Open and Close Posting Periods (c). Assign Variant to Company Code III. SPRO-> Financial Accounting ->Financial Accounting Global Settings>Documents->Document Number Ranges-> (a). Define Document Number Ranges IV. SPRO-> Financial Accounting ->Financial Accounting Global Settings>Documents->Line Items ->Controls-> (a). Maintain Field Status Variant (b). Assign Company Code to Field Status Variant (c). Define Tolerance Groups for Employees 5. Chart of Accounts : is a variant that contains the structure and the basic information about general ledger accounts. I. SPRO-> Financial Accounting ->General Accounting->Master Records-> Preparation-> (a). Edit Chart of Account List (OB13) (b). Assign Company Code to Chart of Accounts

Integration of FI with MM Plants, Purchasing organization, MM view of Vendor Master Record, purchasing order, goods receipt, goods receipt, inventory verification : 1. Plant : Multiple plants can be contained in a company code. They are assigned to the same company code. 2. Purchase : for the plant is completed by the purchases organization post the purchase in the company code of that country. 3. Vendor Master Record : The purchase organization purchases goods from supplier, who are paid by the Accounts Payable. The purchasing organization have to enter data specific to purchases in the Vendor Master Record. Path :

Page 13 of 14

Ganesh Ravula

Page 14

ravula29@yahoo.co.uk

1. SPRO-> Material Management ->Valuation & Account Assignment>Account Determination->Account Determination without wizard>Configure Automatic Posting->(OMWB) Select Cancel button Select Account Assignment Select anyone of the description and double click Give Chart of Accounts Select Accounts are determined based on Debit/Credit option Click on the Accounts button at the top Select Debit & Credit Posting Keys for posting keys and SAVE.

Integration of FI with SD a). Sales Organization, distribution channel, Division. b). SD view of the customer master record, sales shipping, billing. Sales Organization : one company code may have several sales organizations, each sales organization can use different distribution channels to sell goods. A Distribution channel can also be used by two different sales organizations. Sales Area must define sales area specific settings for a customer before it can start business with that customer, these could be specific condition and terms of payment. The sales order forms the basis of Sales process : Delivery document is created. FI : The goods to be delivered are posted as goods issued. A goods issued document is created in MM and an account document is created in FI. So that the goods issue is posted to the correct G/L account. A bills document is created in SD and a printed invoice is sent to the customer. At the same time document is created in FI so that the receivable and revenue can be posted to the correct accounts. Path : 1. SPRO->Sales and Distribution->Basic Functions->Account Assignment Costing->Revenue Recognition->Maintain Account Details->Assigning G/L Account->Customer group-> Give the sales general ledger account number and SAVE. (VKOA)

Page 14 of 14