Business processesfi

Business Blue PrintFinancial Accounting

ASAP Business Blueprint

Financial Accounting

Business Processes

XYZ Industries Limited

Created by: Date of creation: 5/23/03

Changed by:

Date of the last changes:

_______________ ______________________ ______________________

Sign Off Date Signature Customer Signature Consulting


Table of ContentsA. Business Processes...................................................................................................................3

1. Financial Accounting..........................................................................................................31.1. Basic Settings..................................................................................................................31.2. General Ledger Accounting.............................................................................................51.3. Accounts Payable............................................................................................................61.4. Accounts Receivable.......................................................................................................91.5. Bank Accounting..............................................................................................................112. Asset Accounting................................................................................................................132.1. Handling Fixed Assets.....................................................................................................13

BusinessProcessesFI.doc2


A. Business Processes1. Financial Accounting

1.1. Basic Settings

CI template:

1. Requirement & Expectations

1. Required accounting in April to March year as per the Income Tax Act.2. Tax report for the reporting to the sales tax authorities.3. Tax deducted at source recording and compliance to the statutory requirements.

2. General Explanations

Refer to the attachment

Attachments:

\\Erp15\module-wise\FI\7_FI_01(GL-Fiscal year).doc

\\Erp15\module-wise\FI\9_FI_01(Witholding Tax).doc

\\Erp15\module-wise\FI\11_FI_01(GL-Taxes ).doc

3. Explanations of Functions and Events

Refer to the attachment as in point 2.

4. Business Model



Refer to the attachment as in point 2.

5. Special Organizational Considerations

.

6. Changes to existing Organization

.

7. Description of Improvements

1. Financial Accounting is done in an integrated scenario. 2. Same data base is used for the accounting to the different fiscal years. No duplication of efforts.Centralized database and hence information can be accessed from any location where SAP is installed.3. Tax on sales/purchase is calculated automatically by the system, no separate entry has to be made.4. Tax deducted at source is calculated automatically by the system. TDS Annual return and certificates are generated by the system.5.Control on Accounting Entries through Posting Periods

8. Description of Functional Deficits

None

9. Approaches to covering Functional Deficits

Not Applicable

10.Notes on further Improvements

.

11.System Configuration Considerations

.

12.Authorization and User Roles

To be defined during realisation phase



1.2. General Ledger Accounting

CI template:


1. Balance Sheet / Profit & Loss Account complying with the requirements of The Companies Act 1956, The Income Tax Act 1961.2.Compliance with the Accounting Standard –2 of ICAI for the valuation of Inventories.


As per the attachment

Attachments:

\\Erp15\module-wise\FI\Organization Structure FI.doc

\\Erp15\module-wise\FI\10_FI_01(Closing Operations).doc


As per the attachment in point 2.

4. Business Model



Nil


.




1. Balance Sheet / Profit & Loss Account is available on line in the system.2. Inventory is available online while WIP is calculated automatically through the system following the period end closing operations.


None


Not Applicable


1. FI-SL is not in the present scope of the implementation. For the Income tax Balance sheet having a different fiscal year it is a must.2.Budgeting and availability control for the expenses are out of the present scope of Implementation.Required the Funds Management Module for the same.


.


To be finalised in realisation phase.

1.3. Accounts Payable

CI template:


1. Proper material control with Purchase history.2. Quantitative details of the materials procured.3. Import control register (Giving the breakup of total component of cost for each consignment separately)4. MIS regarding position of import L/C limit. 5. In sub-contracting quantitative details of the materials party wise / material wise and history of the contract.


As per the attachment.

Attachments:



\\Erp15\module-wise\FI\1_FI_01(AP-Domestic).doc

\\Erp15\module-wise\FI\2_FI_01(AP-Imports).doc

\\Erp15\module-wise\FI\3_FI_01(AP-Subcontracting).doc

\\Erp15\module-wise\FI\4_FI_01(AP-Returns).doc

\\Erp15\module-wise\FI\8_FI_01(AP-SPL GL Transactions).doc



4. Business Model



.


.




1. Invoices posted are on the basis of the Goods received, which is in turn dependent on the purchase order for the terms and conditions of the purchase, thereby system allowing the procurement as per the purchase policies of the organisation.Invoice verification process is automated. There will be no requirement of linking the bills with the GRs and verification of the Bill with the Purchase order manually.

2.Accounting entries are generated automatically by the system on entering the MM enteries for the material accounting.FI entry is generated as soon as GRN is posted.3.In the sub-contracting process standardization of the process, in some units manual challans are made, in some computer print out of the manually keyed in items are taken, in SAP R/3 direct challans will be taken from the system, reconciliation too shall be done in the system.Paper being sent out for making labels will be fully accounted.4. Vendors sub-ledgers are always posted to General Ledger through the reconciliation accounts, no separate posting is required for the same.5.Copies of Purchase Orders, MRRs, Vouchers will not be required in Finance, leading to reduction in storage requirements and saving in cost of stationery.6. Advances made can be maintained in separate sub-ledgers through the special GL Transactions, which is integrated with the invoice verificaiton for the clearing of the advances on the posting of the invoice of the vendor. Advances paid / received are accounted separately and no need for posting separate entries for balance sheet grouping.7. Period prepaid and unpaid details such as Goods received but invoice not received, recurring payments such as rent would be automatically posted.8. Foreign Currency Valuation is automatic and not manual.9. Automtic payment of the vendors through system generated cheques.10. Sub contract accounting is through the system.


1. Travel request to be generated in the system and integrated for the approval and accounting of the advance amount.2. Report for Import control register (Giving the breakup of total component of cost for each consignment separately)


1.Use Travel management functionality with HR module where personnel database is maintained.2.ABAP report to be developed for the imports register giving cost of componenets separately for each consignment.


1.Travel Management and HR module are not in the present scope of the implementation.2. Budgeting and availability control for the raw material expenses etc.. are out of the present scope of Implementation. Required the Funds Management Module for the same.




.


To be decided in the realisation phase.

1.4. Accounts Receivable

CI template:


1. Deemed exports to be separated from the Direct Exports.2. Payment of Domestic / Ocean freight to be linked to the Sale Invoice.



Attachments:

\\Erp15\module-wise\FI\5_FI_01(AR-Accouts Receivable).doc



4. Business Model



None


.




1. Accounting entries are generated automatically by the system for the material accounting when the goods issue is posted in Sales & Distribution Module. The Bill made in the Sales & Distribution Module is passed to the FI Module automatically or through the Release To Account Procedure. 2. Customers sub-ledgers are always posted to General Ledger through the reconciliation accounts, no separate posting is required for the same.3. Advances received can be maintained in separate sub-ledgers through the special GL Transactions, which is also shown in the customer accounts and can be cleared with the Bills booked in the system. Advances paid / received are accounted separately and no need for posting separate entries for balance sheet grouping.4. Bills of exchange accounting for the exports.5. Cash Discount as per the payment terms and the Rebate Agreement as per the policy of the company can be maintained in the system.6. Interest on the late payments can be calculated through the system.7. Credit limits of the customers can be set and monitored through the system.


1.LC-Utilisation details for the customers.2.LC- related documents for LC being generated for the different banks against receivables from customers.3. Customers who have not paid by due net as per the payment terms to be blocked for the Sales order / Deliveries / Billing.


1.Extensive ABAP development as per the requirements for LC tracking, for the Total LC limit for a Bank, LC Limit per vendor, Amount of LC utilised, Amount of LC available for utilisation, Bills cleared via the LC. ORIVL- third party software.2.Extensive ABAP development using SAP Script & Layout forms, as per the Bank format for the applications. The Numbering to be generated by the system. ORIVL- third party software.3. ABAP development to block the customer for the sales order / delivery / Billing, for the payment not received by due net date as per the payment terms.


.


.




To be defined in Realisation Phase.

1.5. Bank Accounting

CI template:


1. Cheque issue Register a. A separate Register is required for the complete history of the cheques issued with the date of issue of the cheque, date of clearing, demand draft no if made against the cheque issued, amount, including the details of the cancelled cheques.

2. Interest charged by bank and its calculation through the system

3. Report giving date of deposit of Cheques & Drafts and its Clearing Dates.

4. Issue of cheques through System (MICR to be applied on Partial Basis)

5. Daily Funds Planning

6. Separate A/c. should be shown in Foreign Currency amount for the following type of accounts.

a. EEFCb. PCFCc. FCNR (B)d. EBRe. Foreign Currency Loans

7. Separate Accounts for the Commercial Papers.

8. Compliance of Accounting Standard-11. Accounting for the effects of changes in Foreign Exchange rates. As per Para 5 of the AS-11 A transaction in the foreign currency should be recorded in the reporting currency (local Currency) by applying to the foreign currency amount the exchange rate at the date of the transaction.

9. Separate details of Expenditure incurred in Foreign Currency, for the disclosure in final accounts a. Commission paid in Foreign Currencyb. Import Payments viz. Spares, Raw Material & others.c. Capital Goodsd. Interest Payment in Foreign Currency.

10.Pay in slip should be system generated and it is suggested that an individual unique reference number should be generated for each cheque deposit. Pay-in-slip should have fields such as cheque.no, Customer bank a/c no, Bank name, Date, Amount, Area/branch.





Attachments:

\\Erp15\module-wise\FI\12_FI_01(BL-Bank Accounting).doc



4. Business Model



.


.


1.Automated bank reconciliation.2. Automatic interest calculation by the system.3. Accounts can be maintained in multiple currencies as per the requirement


1.Cash Management system and daily fund Planning to arrive at total cash available and facilitate transfer from one account to another2. Cheque Issue / Deposit Register Out of SAP R/3 std for the Demand draft number against the cheques issued.3.Pay in slip to be generated from the system as per the Bank Pay in slip format.


1.Work around-All cash and bank balances will be downloaded to the excel to get the available funds.2.ABAP/4 Report to be developed.Standard cheque register does not have a field for the



DD's issued against the cheque.3.ABAP/4 - Layout form to be developed as per the Bank pay in slip.


MICR Cheque printing.MICR printer and software for Cheque printing required.Not a functional constraint.ABIL to get the permission and cheque format approval from banks, also required compatible printer alongwith its software.


.


To be decided in Realisation Phase.

2. Asset Accounting2.1. Handling Fixed Assets

CI template:


1. Assets to be captured with the details of , asset name, location of asset, Qty,Supplier name, LC number, PO number, Invoice number and GR number, Depreciation rate,Cost Center, Date of Capitalisation.2. Cost component wise break up required of the asset.3. Revaluation of assets to be done through the system.4. Foreign Currency revaluation for assets taken on loan against foreign currency.5. Multiple Depreciaton rate for the assets.6. Separate Depreciation Chart for the income tax purpose.7. Fixed Asset Code generation through the system.


As per attachment.

Attachments:

\\Erp15\module-wise\FI\6_FI_01(AA-Assets).doc





4. Business Model



Depreciaton calculation for the income tax purposes in a different fiscal year.


.


1. Fixed asset details are available on line.2.Depreciation is calculated by the system.3. Fixed Assets budgeting can be monitored through Internal orders.4. Cenvat requirements are complied for the 50% cenvat being taken in the year of the purchase and the balance 50% in the next year.5. Automatic accounting of the depreciaton and profit or loss on the sale/retirement of the asset.6.Asset accounting will be up-dated directly with MM/FI entry.7.Assets will be identified with, location in all cases.


1. Depriciation for the income tax in a different fiscal year.


1. The procedure and how to account the depreciation calculation for the income tax in a different fiscal year to be finalised during realisation.


.


.


To be defined in realisation phase.




Documents

Business processesfi