ERP Systems - Chapter 5: Financial Management PDF

ERP Systems Chapter 5: Financial Management based on Module for Financial Accounting (FI) Prof. Dr. Juergen Weiner  ERP Systems ERP-Modules 1. FI – Financial Management 2....

ERP Systems Chapter 5: Financial Management based on Module for Financial Accounting (FI) Prof. Dr. Juergen Weiner  ERP Systems ERP-Modules 1. FI – Financial Management 2. CO – Controlling / Management Accounting SD 3. SD – Sales and Distribution FI WM 4. MM – Materials Management MM EAM CO QM 5. PP – Production Planning PP CS 6. WM – Warehouse Management PS 7. QM – Quality Management HR 8. EAM – Enterprise Asset Management 9. CS – Customer Service 10. PS – Project System 11. HR – Human Resource Core Processes Extended Processes SS2024 ERP Systems - Chapter 5: Financial Management 2  ERP Systems Primary vs. Secondary Processes Primary Processes Order-to-Cash Procure-to-Pay Plan-to-Produce Secondary Processes Financials Human Resources IT Management SS2024 ERP Systems - Chapter 5: Financial Management 3  ERP Systems Primary vs. Secondary Processes Primary Processes Order-to-Cash Procure-to-Pay Plan-to-Produce Secondary Processes Financials Human Resources IT Management SS2024 ERP Systems - Chapter 5: Financial Management 4  Financial Management Learning Objectives By the end of the chapter, students learn to differentiate between financial and management accounting understand the organizational data relevant for process summarize the master data which is most important for the process explain a standard financial accounting process post financial accounting relevant processes in the system SS2024 ERP Systems - Chapter 5: Financial Management 5  Financial Management Table of Contents 1. Fundamentals 2. Process Overview 3. Organizational Data 4. Master Data 5. Process Flow in Detail 6. Summary SS2024 ERP Systems - Chapter 5: Financial Management 6  Financial Management Table of Contents 1. Fundamentals 2. Process Overview 3. Organizational Data 4. Master Data 5. Process Flow in Detail 6. Summary SS2024 ERP Systems - Chapter 5: Financial Management 7  Fundamentals Primary vs. Secondary Processes Primary Processes Procure-to-Pay Plan-to-Produce Order-to-Cash Secondary Processes Financials Human Resources IT Management SS2024 ERP Systems - Chapter 5: Financial Management 8  Fundamentals Primary vs. Secondary Processes Primary Processes Procure-to-Pay Plan-to-Produce Order-to-Cash Secondary Processes Financials Human Resources IT Management SS2024 ERP Systems - Chapter 5: Financial Management 9  Fundamentals Financial vs. Management Accounting Financials can be subdivided in two major parts: Financial Accounting (FI) and Management Accounting (CO) Financial Accounting has the task to meet legal requirements. The main tasks are as follows: FI Post all financial transactions, revenues, and expenses Keep them unchanged in the system for reporting purposes Allow the setting up of a profit and loss statement and a balance sheet to fulfill the legal requirements of a country or of a financial reporting standard Management Accounting provides information that management can use to make decisions: CO It facilitates the coordination, supervision and optimization of all processes within a company This involves recording both the consumption of production factors and the services provided by an organization SS2024 ERP Systems - Chapter 5: Financial Management 10  Fundamentals Financial Accounting Purpose: Financial Accounting is the reporting of the financial position and performance of an organization through financial statements issued to external users on a periodic basis Because the Financial Accounting module provides a single version of the financial truth, it enables global companies to operate as one company Built-in functionality allows companies to speed the time needed to generate financials statements by streamlining consolidation across legal entities, business units, charts of accounts, and currencies, while complying with law and regulations related to financial matters Stakeholders External decision-makers, such as stockholder, tax authorities, regulations, financial analyst, creditors, and the general inverting public, are the target audience for financial statements Every type of organizations should produce financial statements at least yearly. Since publicity held companies must comply with Securities and Exchange Commission (SEC) regulations they must file not only yearly reports, but also quarterly 10Q reports, which include financial statement and relevant notes to the financial statement Source: Bradford, Marianne | Modern ERP | p. 138 SS2024 ERP Systems - Chapter 5: Financial Management 11  Process Overview GL – General Ledger Modern ERP systems accumulate transactional data from all the other modules and summarize the results in the GL The GL, is very important because it shows the debit and credit entries to each account and the balances as a result of the posting of transactions In ERP systems, transactions are a type of activity or event that creates accounting entities impacting the GL Financial Accounting is subject to legal requirements of a country, and, in addition, to requirements of certain financial reporting standards The central task of General Ledger Accounting is to provide a comprehensive picture of external accounting and financial records The General Ledger (G/L) serves as a complete record of all business transactions. The G/L is managed at the company code level. All accounting-relevant transactions made in other components, e.g. Logistics (LO) or Human Resources (HR), are posted in real time to FI by means of automatic account determination. The aim of recording business transactions is to create a balance sheet and profit and loss (P&L) statement The important tasks of Financial Accounting (FI) are the recording of monetary and value flows, and inventory evaluation SS2024 ERP Systems - Chapter 5: Financial Management 12  Fundamentals GAAP vs. IFRS GAAP – Generally Accepted Accounting Principles IFRS – International Financial Reporting Standards In the United States, financial statements must conform If a company operates outside the U.S., it most likely complies with to generally accepted accounting principles govern how public companies prepare and disclose their financial These are the standards that U.S.-based companies statements follow in recording financial transactions This accounting framework is used in more than 120 countries GAAP Statement Description IFRS Equivalent Summarizes the income and expenses during an accounting Statement of profit and loss another Income statement period (monthly, quarterly, yearly) to derive net income or loss comprehensive income Details the changes in owners’ equity during the accounting Statement of retained earnings Statement of changes in equity period due to net income or net loss and payment of dividends Lists the balance of assets, liabilities, and stockholders’ equity Balance Sheet Statement of financial position at the end of the accounting period Presents cash receipts and cash payments during the Statement of cash flows Statement of cash flows accounting period SS2024 ERP Systems - Chapter 5: Financial Management 13  Fundamentals T-Account Accounts Name A T-Account is a graphic representation of a general ledger account Debit Credit The name of the account is placed above the "T" (sometimes along with the account number) Debit entries are depicted to the left of the "T" and credits are shown to the right of the "T" The grand total balance for each "T" account appears at the bottom of the account A number of T-Accounts are typically clustered together to show all of the accounts affected by an accounting transaction The T-Account is a fundamental training tool in double entry accounting, showing how one side of an accounting transaction is reflected in another account. It is also quite useful for clarifying the more complex transactions. This approach is not used in single entry accounting, where only one account is impacted by each transaction SS2024 ERP Systems - Chapter 5: Financial Management 14  Fundamentals Chart of Accounts Accounts Account Groups Financial Accounting begins with a well-designed chart of Debit 100000 Credit accounts (COA), which is a classification and listing of every Debit 100020 Credit general ledger account that the company uses to record its Group 1: transaction Debit 100040 Credit Asset Accounts The general ledger (GL) is the single most important integration element in financial accounting, as the accounts Debit 200000 Credit contained in it are used to prepare financial statements and support internal decisions-making Debit 200020 Credit Group 2: Material Accounts Debit 200040 Credit The types of GL accounts are master data in an ERP system Entering the GL accounts and assigning them to a COA is mandatory before the ERP system can process any Debit 300000 Credit accounting transaction Debit 300020 Credit Group 3: Account groups allow you to define groups of similar Debit 300040 Credit Bank Accounts G/L accounts. For example, you could have bank accounts, postal giro accounts, and petty cash in an account group called Liquid Assets …. …. SS2024 ERP Systems - Chapter 5: Financial Management 15  Fundamentals Chart of Accounts Charts of accounts can have three different functions: Operating chart of accounts − The operating chart of accounts contains the G/L accounts that you use for daily posting in your company code − Financial Accounting and Controlling both use this chart of accounts − You need to assign an operating chart of accounts to a company code Group chart of accounts − The group chart of accounts contains the G/L accounts that are used by the entire corporate group − This enables group reporting − Assigning a group chart of accounts to an operating chart of accounts is optional Country-specific chart of accounts − A country-specific chart of accounts contains the G/L accounts needed to meet a specific country's legal reporting requirements − Assigning a country-specific chart of accounts to a company code is optional SS2024 ERP Systems - Chapter 5: Financial Management 16  Fundamentals Subledgers You can use subledgers for customers, suppliers and so on. Every posting that is made in the subledgers generates a corresponding posting to the assigned Reconciliation G/L accounts – this ensures that the subledgers are always reconciled with the G/L Examples: Accounts payable (AP) records all business transactions relating to suppliers. It takes much of its data from the procure-to-pay business process Accounts receivable (AR) records transactions and manages accounting data of all customers. It takes much of its data from the order-to-cash business process Asset Accounting (AA) deals with both current assets and non-current assets (fixed assets). Bank Ledger (FI-BL) supports the booking of cash flows Material Ledger(ML) used to manage your inventory in multiple currencies and/ or perform multiple inventory valuation. It allows the client to manage its inventory in three currencies SS2024 ERP Systems - Chapter 5: Financial Management 17  Fundamentals Accounts Receivable Accounts Receivable Sub-Ledger (FI-AR) Information with respect to customers who purchase the enterprise’s goods and services such as sales and payments made Substantive and important integration between Sales and Distribution (SD) and Financial Accounting (FI) Billings in SD generate FI journal entries for sales activities Customer 189 Customer 195 Debit Credit Debit Credit Accounts Receivable 100 300 (General Ledger) Debit Credit 650 Customer 135 Customer 147 Debit Credit Debit Credit 100 150 SS2024 ERP Systems - Chapter 5: Financial Management 18  Fundamentals Accounts Payable Accounts Payable Sub-Ledger (FI-AR) Information with respect to vendors who sold the enterprise’s goods and services Substantive and important integration between Material Management (MM) and Financial Accounting (FI) Invoices in MM generate FI journal entries for procurement activities Vendor 225 Vendor 317 Debit Credit Debit Credit Accounts Payable 200 250 (General Ledger) Debit Credit 850 Vendor 285 Vendor 335 Debit Credit Debit Credit 100 300 SS2024 ERP Systems - Chapter 5: Financial Management 19  Fundamentals General Ledger and Sublegders General Ledger Accounting Balance Sheet (BS) Reconciliation Reconciliation Account Account Balance Sheet Accounts Balance Sheet Accounts Reconciliation Account Profit and Loss Statement (P&L) P&L Sheet Accounts Customer Assets Vendor Accounts Asset Accounts Receivable Accounting …. Payable SS2024 ERP Systems - Chapter 5: Financial Management 20  Fundamentals Balance Sheet Structure – Simplified Assets Balance Sheet Liability & Equity Fixed Assets 1.500 Equity 800 a. Buildings 1.000 a. Share Capital 600 b. Machines 500 b. Retained Earning 200 Current Assets 700 Liability 1.400 a. Inventory 400 a. Long Term Loan 1.050 b. Accounts Receivable 200 b. Short Term Loan 50 c. Cash 100 c. Accounts Payable 300 Total Assets 2.200 Total Liabilities & Equity 2.200 What do I have? To whom does it belong? SS2024 ERP Systems - Chapter 5: Financial Management 21  Fundamentals General Ledger and Sublegders Fixed Assets Balance Sheet ASSETS LIABILITIES & EQUITY Fixed Assets Equity Capital Inventory Bank Material Loans Receivables Liabilities Customers Vendors Bank Bank accounts Profit and Loss Expenditure Income SS2024 ERP Systems - Chapter 5: Financial Management 22  Fundamentals Profit & Lost Statement Structure – Simplified The income statement is a table listing all the company's income and expenses to deduct the result for a given fiscal year. The income statement is part of the company's financial statements, together with the balance sheet, cash flow statement and notes. Revenue Sales 11,000 Deductions 750 Total Revenue 10,250 Operating Expenses Cost of Good Sold 4,500 Operational Expenses 3,750 Total Expenses 8,250 Net Income before Taxes 2,000 Taxes 750 Net Income 1,250 SS2024 ERP Systems - Chapter 5: Financial Management 23  Financial Management Table of Contents 1. Fundamentals 2. Process Overview 3. Organizational Data 4. Master Data 5. Process Flow in Detail 6. Summary SS2024 ERP Systems - Chapter 5: Financial Management 24  Process Overview Accounting Cycle 1. Transaction occurs The accounting cycle refers to the collective process of recording and processing the accounting transactions of 2. 7. Transaction a company Financial recorded in Statement ERP- The accounting cycle is performed during each period, system and at the end of the period, the ERP system compiles the company’s financial statement Accounting 6. Adjusted Cycle 3. The time period principle in accounting states that a Transaction Trial posted to company should prepare its financial statements on a Balance G/L account periodic basis (monthly, quarterly, and/or yearly) The accounting cycle is basically the same for every organization 5. 4. Adjusting End of and Closing Period Trial Events Balance Source: Bradford, Marianne | Modern ERP | p. 141 SS2024 ERP Systems - Chapter 5: Financial Management 25  Process Overview Accounting Cycle – Step 1: Transaction occurs 1. Supplier delivers goods to the company Transaction occurs Supplier sent an invoice to the company 2. Company delivers goods to the customer 7. Transaction Financial recorded in Company sent an invoice to the customer Statement ERP- system Customer sent malfunctions product back Goods issue to an production order Accounting 6. Adjusted Cycle 3. … Transaction Trial posted to Balance G/L account 5. 4. Adjusting End of and Closing Period Trial Events Balance Source: Bradford, Marianne | Modern ERP | p. 141 SS2024 ERP Systems - Chapter 5: Financial Management 26  Process Overview Accounting Cycle – Step 2: Transaction recorded in the ERP-system 1. Transaction First, a user enters a transaction in the system occurs The transaction will contain key facts about a 2. transaction, such as the parties involved, date, purpose, 7. Transaction Financial recorded in items bought or sold, unit of measure, currency, amount Statement ERP- of transaction, etc. system ERP systems also keep track of which user entered a Accounting transaction Cycle 3. 6. Adjusted Transaction Many ERP systems will not allow editing of a Trial Balance posted to transactions but will allow the transaction to be revised G/L account (with approval) This internal control guards against fraudulent financial 5. 4. reporting Adjusting End of and Closing Period Trial Events Balance Source: Bradford, Marianne | Modern ERP | p. 141 SS2024 ERP Systems - Chapter 5: Financial Management 27  Process Overview Accounting Cycle – Step 3: Transaction posted to G/L account 1. If a transaction in the system has financial implications Transaction occurs in addition a financial accounting posting is done 2. For example, a customer is typically invoiced using the 7. Transaction Sales module of an ERP system or a customer Financial recorded in Statement ERP- relationship management (CRM) system system The invoice triggers an accounting transaction that automatically posts to the GL to show an accounts Accounting 6. Adjusted Cycle 3. receivable from the customer and sales revenue as the Transaction Trial posted to offset Balance G/L account Other ERP modules, such as the Purchasing module, also create accounting entries – when inventory is received, an accounting transaction will post to the GL to 5. 4. Adjusting End of show the cost of the inventory and an accounts payable and Closing Period Trial to the supplier as an offset Events Balance Source: Bradford, Marianne | Modern ERP | p. 141 SS2024 ERP Systems - Chapter 5: Financial Management 28  Process Overview Accounting Cycle – Step 4: End of Period Trial Balance 1. The ERP system will generate a trial balance at the end Transaction occurs of the period, which is a listing of all the end of period GL balances 2. 7. Transaction ERP systems enforce correct postings of entries so that Financial recorded in Statement ERP- a debit is always offset by a credit system This correct method of postings entries is referred to in accounting as the double-entry system of accounting Accounting 6. Adjusted Cycle 3. To elaborate, for every accounting transaction, amounts Transaction Trial posted to must be recorded in a minimum of two GL accounts, and Balance G/L account the debits equal the credits The end of period trial balance is a requisite step 5. 4. towards preparing the financial statements Adjusting End of and Closing Period Trial Events Balance Source: Bradford, Marianne | Modern ERP | p. 141 SS2024 ERP Systems - Chapter 5: Financial Management 29  Process Overview Accounting Cycle – Step 5: Adjusting and Closing Events 1. Accountants also prepare adjusting entries, such as Transaction occurs accruing revenue earned, but not received in cash 2. Afterwards the ERP system will generate an adjusted 7. Transaction trial balance Financial recorded in Statement ERP- The ERP system will also create closing entries that system result in the net income (or net loss) to post to the retained earnings component of stockholders’ equity Accounting Cycle 3. 6. Adjusted Transaction Trial posted to Balance G/L account 5. 4. Adjusting End of and Closing Period Trial Events Balance Source: Bradford, Marianne | Modern ERP | p. 141 SS2024 ERP Systems - Chapter 5: Financial Management 30  Process Overview Accounting Cycle – Step 6: Adjusting and Closing Events 1. After the adjusting entries the ERP system will generate Transaction occurs an adjusted trial balance 2. 7. Transaction Financial recorded in Statement ERP- system Accounting Cycle 3. 6. Adjusted Transaction Trial posted to Balance G/L account 5. 4. Adjusting End of and Closing Period Trial Events Balance Source: Bradford, Marianne | Modern ERP | p. 141 SS2024 ERP Systems - Chapter 5: Financial Management 31  Process Overview Accounting Cycle – Step 7: Financial Statement 1. The ERP system will also create closing entries that Transaction occurs result in the net income (or net loss) to post to the retained earnings component of stockholders’ equity 2. 7. Transaction Financial recorded in Statement ERP- system Accounting Cycle 3. 6. Adjusted Transaction Trial posted to Balance G/L account 5. 4. Adjusting End of and Closing Period Trial Events Balance Source: Bradford, Marianne | Modern ERP | p. 141 SS2024 ERP Systems - Chapter 5: Financial Management 32  Process Overview Example: SAP Financial Reports SAP Investor Relations SS2024 ERP Systems - Chapter 5: Financial Management 33  Process Overview Example: Financial Statement SS2024 ERP Systems - Chapter 5: Financial Management 34  Financial Management Table of Contents 1. Fundamentals 2. Process Overview 3. Organizational Data 4. Master Data 5. Process Flow in Detail 6. Summary SS2024 ERP Systems - Chapter 5: Financial Management 35  Organizational Data Client –Credit Control Area – Company Code Client Client Global Bike Credit Control Area (global) Credit Control Area GL00 Global Bike Inc. Global Bike Germany GmbH Company Code US00 DE00 USA Germany Client: − An independent environment in the system Credit Control Area − An organizational entity which grants and monitors a credit limit for customers − It can include one or more company codes Company Code: − Smallest organizational unit for which you can maintain a legal set of books SS2024 ERP Systems - Chapter 5: Financial Management 36  Organizational Data Chart of Accounts Chart of Accounts A chart of accounts is a structure containing the G/L accounts used by one or more company codes Client Client Global Bike For each G/L account, the chart of accounts shows the account number, the account name, and information that Global Chart of Account determines the function of the account and that controls how Charts of Account GL00 the account is created in the company code and in the controlling area Global Bike Inc. Global Bike Germany GmbH You need to assign a chart of accounts to each company Company Code US00 DE00 code. This chart of accounts is then the operating chart of accounts and is used for the daily postings in the company code If cost and revenue accounting is active, the chart of accounts is also used for postings in the controlling area SS2024 ERP Systems - Chapter 5: Financial Management 37  Organizational Data Business Area Business Area An organizational unit that represents a separate area of operations or responsibilities within an organization and to which value changes recorded in Financial Accounting can be allocated Financial statements can be created for business areas, and these statements can be used in external segment reporting (over and above company codes), based on the significant areas of operation of a company (for example, product lines, branches) If you have defined business areas, the transaction figures for the G/L accounts are managed separately for internal evaluation purposes SS2024 ERP Systems - Chapter 5: Financial Management 38  Organizational Data Overview Global Bike Structure for Financial Accounting Client Global Bike Company Code Global Bike Inc. Global Bike Germany GmbH Chart of Global Bike Accounts Chart of Accounts Business Area Bikes Credit Control Area Global Credit Control SS2024 ERP Systems - Chapter 5: Financial Management 39  Financial Management Table of Contents 1. Fundamentals 2. Process Overview 3. Organizational Data 4. Master Data 5. Process Flow in Detail 6. Summary SS2024 ERP Systems - Chapter 5: Financial Management 40  Master Data GL – Account Vendor Master necessary for subledger Accounts Payable Customer Master necessary for subledger Accounts Receivable SS2024 ERP Systems - Chapter 5: Financial Management 41  Master Data Create a GL Account Master – 1/6 SS2024 ERP Systems - Chapter 5: Financial Management 42  Master Data Create a GL Account Master – 2/6 SS2024 ERP Systems - Chapter 5: Financial Management 43  Master Data Create a GL Account Master – 3/6 Chart of Accounts Account Type Account Group SS2024 ERP Systems - Chapter 5: Financial Management 44  Master Data Create a GL Account Master – 4/6 G/L Account Types - G/L accounts are classified into the following types: Balance Sheet Account Account that is posted from business transactions. The balance of a balance sheet account is carried forward at fiscal year-end Nonoperating Expense or Income Income statement account that records expenses or gains from activities that are not part of the main purpose of the company, such as gains realized from financial investments by a manufacturing company Primary Costs or Revenue Income statement account that functions as a cost element for primary costs or revenue. Primary costs reflect operating expenses such as payroll, selling expenses, or administration costs Secondary Costs Income statement account that functions as a cost element for secondary costs. Secondary costs result from value flows within the organization, such as internal activity cost allocations, overhead allocations, and settlement transactions SS2024 ERP Systems - Chapter 5: Financial Management 45  Master Data Create a GL Account Master – 5/6 Company Code Multiple Entries are possible SS2024 ERP Systems - Chapter 5: Financial Management 46  Master Data Create a GL Account Master – 6/6 Company Code Multiple Entries are possible SS2024 ERP Systems - Chapter 5: Financial Management 47  Master Data Reconciliation Account – 1/2 Company Code Multiple Entries are possible SS2024 ERP Systems - Chapter 5: Financial Management 48  Master Data Reconciliation Account – 2/2 Company Code Multiple Entries are possible SS2024 ERP Systems - Chapter 5: Financial Management 49  Master Data Expense Account – 2/3 Company Code Multiple Entries are possible SS2024 ERP Systems - Chapter 5: Financial Management 50  Master Data Expense Account – 3/3 Company Code Multiple Entries are possible SS2024 ERP Systems - Chapter 5: Financial Management 51  Master Data Business Partners An organization (company, subsidiary), person or group of people or organizations in which your company has a business interest An business partner could have different partner roles like customer or vendor SAP Business Partner Business Partner Business Partner Type Role Name Addresse(s) Vendor … Tax ID Business Partner Bank data … Customer SS2024 ERP Systems - Chapter 5: Financial Management 52  Master Data Business Partner and Procurement Process In order to process Purchase Orders, Business Partner’s must be created in the Vendor Role The vendor master database contains information about the vendors that supply an enterprise. This information is stored in individual vendor master records A vendor master record contains the vendor's name and address, as well as data such as: The currency used Vendor for ordering from the vendor SS2024 ERP Systems - Chapter 5: Financial Management 53  Master Data Vendor Master Creation – 1/5 SS2024 ERP Systems - Chapter 5: Financial Management 54  Master Data Vendor Master Creation – 2/5 SS2024 ERP Systems - Chapter 5: Financial Management 55  Master Data Vendor Master Creation – 3/5 SS2024 ERP Systems - Chapter 5: Financial Management 56  Master Data Vendor Master Creation – 4/5 SS2024 ERP Systems - Chapter 5: Financial Management 57  Master Data Vendor Master Creation – 5/5 The vendor master database contains information about the vendors that supply an enterprise A vendor master record contains the vendor's name and address, as well as data such as: The currency used for ordering from the vendor Every posting that is made in the subledgers generates a corresponding posting to the assigned Reconciliation G/L accounts SS2024 ERP Systems - Chapter 5: Financial Management 58  Master Data HR – Master Data Area Management Working Level Source ARIS, Hochschule Harz | Enterprise Online Guide for SAP SS2024 ERP Systems - Chapter 5: Financial Management 59  Financial Management Table of Contents 1. Fundamentals 2. Process Overview 3. Organizational Data 4. Master Data 5. Process Flow in Detail 6. Summary SS2024 ERP Systems - Chapter 5: Financial Management 60  Process Flow in Detail Process Overview of the Case Study In the FI case study we will not post an complete accounting cycle as outlined in the chapter “Fundamentals” Focus is on master data creation, daily financial postings and reviewing the financial statement Source ARIS, Hochschule Harz | Enterprise Online Guide for SAP SS2024 ERP Systems - Chapter 5: Financial Management 61  Process Flow in Detail Posting a GL Account Document You can easily create and post a G/L account document using the Fiori App Post General Journal Entries The entry screen of the Fiori App Post General Journal Entries is divided into multiple areas as shown in the figure Fiori App - Post General Journal Entries Header data: Header data applies to the whole document, such as posting date and document type Line Item information: Enter the line items of the document here Tax items: Enter tax items details, for example if the system should calculate the taxes automatically during simulation or posting, here SS2024 ERP Systems - Chapter 5: Financial Management 62  Process Flow in Detail Posting Example – Transfer of Funds SS2024 ERP Systems - Chapter 5: Financial Management 63  Process Flow in Detail Manage Journal Entries SS2024 ERP Systems - Chapter 5: Financial Management 64  Process Flow in Detail Display Journal Entries – In T-Account View SS2024 ERP Systems - Chapter 5: Financial Management 65  Process Flow in Detail Posting Example – Vendor/Supplier Invoice 1/2 Enter Invoice Enter Vendor Amount Enter Debit Account SS2024 ERP Systems - Chapter 5: Financial Management 66  Process Flow in Detail Posting Example – Vendor/Supplier Invoice 2/2 If Management Account (CO) is activated, an Cost Object must be entered ! SS2024 ERP Systems - Chapter 5: Financial Management 67  Process Flow in Detail Manage Journal Entries SS2024 ERP Systems - Chapter 5: Financial Management 68  Process Flow in Detail Display Journal Entries – In T-Account View SS2024 ERP Systems - Chapter 5: Financial Management 69  Process Flow in Detail Display Document Flow SS2024 ERP Systems - Chapter 5: Financial Management 70  Process Flow in Detail Display Document Flow – Accounts Payable SS2024 ERP Systems - Chapter 5: Financial Management 71  Process Flow in Detail Display Supplier Balances SS2024 ERP Systems - Chapter 5: Financial Management 72  Process Flow in Detail Display G/L Account Balances SS2024 ERP Systems - Chapter 5: Financial Management 73  Process Flow in Detail Payment – 1/3 Press clear to initiated the payment SS2024 ERP Systems - Chapter 5: Financial Management 74  Process Flow in Detail Payment – 2/3 Post the payment SS2024 ERP Systems - Chapter 5: Financial Management 75  Process Flow in Detail Payment – 3/3 SS2024 ERP Systems - Chapter 5: Financial Management 76  Process Flow in Detail Manage Journal Entries SS2024 ERP Systems - Chapter 5: Financial Management 77  Process Flow in Detail Display Journal Entries – In T-Account View SS2024 ERP Systems - Chapter 5: Financial Management 78  Process Flow in Detail Display Document Flow SS2024 ERP Systems - Chapter 5: Financial Management 79  Process Flow in Detail Display Document Flow – Accounts Payable SS2024 ERP Systems - Chapter 5: Financial Management 80  Process Flow in Detail Financial Statement – Assets Drilldown G/L Balances SS2024 ERP Systems - Chapter 5: Financial Management 81  Process Flow in Detail Financial Statement – Drilldown to G/L Balances Drilldown to Line Item SS2024 ERP Systems - Chapter 5: Financial Management 82  Process Flow in Detail Financial Statement – Drilldown to Line Item Drilldown to individual posting SS2024 ERP Systems - Chapter 5: Financial Management 83  Process Flow in Detail Financial Statement – Drilldown to Journal Entry Level (Individual Posting) SS2024 ERP Systems - Chapter 5: Financial Management 84  Process Flow in Detail Financial Statement – Profit & Loss Profit & Loss Statement SS2024 ERP Systems - Chapter 5: Financial Management 85  Financial Management Table of Contents 1. Fundamentals 2. Process Overview 3. Organizational Data 4. Master Data 5. Process Flow in Detail 6. Summary SS2024 ERP Systems - Chapter 5: Financial Management 86  Summary You learned to differentiate between financial and management accounting understand the organizational data relevant for process summarize the master data which is most important for the process explain a standard financial accounting process post financial accounting relevant processes in the system SS2024 ERP Systems - Chapter 5: Financial Management 87  Questions ?? SS2024 ERP Systems - Chapter 5: Financial Management 88