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SAP R/3Business Blueprint
Chapter 8
External Accounting
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External Accounting Reflects the changing relationship
between companies and outside
vendors or suppliers
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Issues for the
presentation Vendor handling
Customer processing
OTA vendor processing
Creditor subsidiary/Head Office processing
General ledger processing
Special-purpose ledger handling Consolidation
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Vendor handling The R/3 accounts payable manages the
accounting data of all of a companys
vendors. A vendor is companys business partner
who has outstanding payables for receivedgoods or services.
Key areas of accounts payable are: Integration of information
Cash management
Payment procedures
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Vendor handling - II Vendor Master Record Processing
Vendor Invoice Processing
Down Payment Release
Automatic Payment
Manual Payment
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Vendor handling III
Vendor master record processing
The basic data object is the vendor master
record, and contains the link to the general
ledger, information on each vendor and thepurchasing and accounting functions in the
R/3 system
The master record consist of:
General data
Company code data
Purchasing organization data
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Vendor handling IV
Vendor master record processing
General data Basic information such as company address,
phone, etc Company code data
Individual account information concerning thevendor
The smallest org. unit for which a set of accountscan be drawn up for reporting purposes
Purchasing organization data Information on request for quotation, purchase
orders and invoice verification
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Vendor handling V
Vendor master record processing
A new master record is made for eachindividual account group
Two types exist: Internal: Created by the system itself
External: Determined by the user
All information for master records is entered
through a customized UI A master record must be created in order to
process transactions
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Vendor handling VI
Vendor invoice processing
Involves data entry
Invoices may or may not have a
vendor master record
If an invoice arrives from a vendor
without a master record, it must be
created before invoice data can beentered.
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Vendor handling VII
Down payment release
The payment program generates downpayments to vendors
The first step is to generate a request fordown payment and a due date, stored as adocument
The system automatically creates the actual
down payment, and pays the invoiceamount
The system also reports the amountsaccurately in a balance sheet.
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Vendor handling VIII
Automatic payment
Automatic payment is carried out in three
steps:
Create payment proposal Based on specifications in the customer master record
Process payment proposal
Editing, processing, triggering of payment
Post payment documents Generation of payments with matching documents.
Payable items are cleared and linked to the payments
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Vendor handling IX
Manual payment
An additional option for processing
payments
The following information must always beentered manually:
The general ledger account number for the bank
The payment amount
Any charges/fee
The document number
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Customer processing Describes how financial transactions are
managed for standard customers
Two general functions: Provides basic data for effective credit
management
Supports all traditional accounts receivable
techniques
The master record plays a central role here
as well
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Customer processing - II The master record has a three part
structure:
General customer data
Address, phone, etc
Company code
Form of payment, etc Sales data
Shipping, etc
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Customer processing - III Companies want to get their money quickly,
customer processing is therefore considered
as a key process Faster payments lead to a more effective
process and greater savings
Customer remainders may be sent
(dunning) Customer processing is integrated with
other functions, such as sales logistics andbudgeting
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OTA vendor processing Some suppliers deliver goods or services
only once, and these are called one-time
accounts (OTA) They are treated differently, with a more
simplified approach to master data
processing
They have a common master data record
One-step invoice processing
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Creditor subsidiary/
Head-office processing Designed for vendors with head offices
and subsidiaries who are customary
suppliers for services or goods Invoices made to the branch accounts
automatically update the head officeaccount
A separate set of master data aremade but they are linked together
Modifications can be made as needed
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General ledger
processing A financial accounting ledger that
provides clear structures for the
organization and documentation ofaccounting, and highly automated
processes for day-, month- and year-
end closings Consists of company code, business
area and a chart of accounts
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General ledger
processing - II Company code
Business area
Is used to analyse balance sheet items and profitand loss statements
Chart of accountsA classification system and evaluation tool that
records values or value flows
Has three functions: Corporate chart of accounts
Local chart of accounts
Operational chart of accounts
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General ledger
processing - III The general ledger account postings
are well organized and integrated with
other areas
It also contains a calendar that permits
fiscal year flexibility, such as year-
round closing capabilities
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Special purpose ledger
handling Provides an evaluation system for
more specific areas.
Gives numerous options for analyses
and reports that supplement traditional
accounting applications
Key areas are: Integration, planningand reporting
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Consolidation Is the process of collecting and
reconciling the financial statements of
companies into a single consolidatedfinancial statement that portrays the
financial circumstances as a whole
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Consolidation - II Deals with the way companies summarize
financial information from different
subsidiaries and joint ventures in variouscurrencies and countries
Especially applicable to diversified
multinational companies
Supports a general understanding of how a
business is working