Organizational Structures in SAP

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Organizational Structures in SAP

• Thanks to
• The Rushmore Group, LLC
• info_at_rushmore-group.com
• and SAP
• for assistance with preparing these slides.

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Organisational Structures in SAP
SAP Enterprise System

• The Stool
• Components
• Organizational Data
• Master Data
• Rules
• Transactions

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Organizational Data
SAP Enterprise System

• A hierarchy in which the organizational units in
  an enterprise are arranged according to tasks and
  functions
• Are static data and are rarely changed
• Once you have decided on an organizational
  structure it is not easy to change it
• The definition of organization units is a
  fundamental step, it is a critical factor in how
  the company will be structured

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Master Data
SAP Enterprise System

• Master data is relatively fixed
• Material master data
• Vendor master data
• Purchasing information record
• General Ledger master data
• Before making the master data configurations, you
  must have completely defined the organizational
  structures

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Rules
SAP Enterprise System

• Defines the parameters for Master Data and
  Transactions
• Determines functionality for Master Data and
  Transactions
• Relatively fixed
• Changes as policy changes

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Transaction Data
SAP Enterprise System

• Includes internal and external exchanges that
  describe business activities
• Unlike master data, aggregate transactional data
  is dynamic - it constantly changes, usually many
  times per day

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Financial Accounting (FI)

• - Organizational Structures -

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Organizational Data
SAP Enterprise System

• A hierarchy in which the organizational units in
  an enterprise are arranged according to tasks and
  functions.
• Are static data and are rarely changed
• Once you have decided on an organizational
  structure it is not easy to change it
• The definition of organization units is a
  fundamental step, it is a critical factor in how
  the company will be structured

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Unit 3, Part 3 Overview
Financial Accounting (FI)
Integration

• Organizational Structures
• Client
• Company
• Chart of accounts
• Company code
• Credit control area
• Account groups
• Field status variant
• Fiscal year variant
• Tax version

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Financial Accounting (FI)
Client

• Client  Definition
• A commercially, organizationally, and technically
  self-contained unit within an SAP System.
• Highest hierarchical level in an SAP environment
• A complete database containing all the tables
  necessary for creating a fully integrated
  information system
• Master records are created at the client level

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Financial Accounting (FI)

• The definition of the client organizational unit
  is obligatory.
• Specifications that you make, or data entered at
  this level are valid for all company codes and
  for all other organizational structures.
• All the entries are saved per client. Data
  processing and analysis is carried out per
  client.
• This means that you cannot include customer
  accounts from different clients in one dunning
  run.

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Financial Accounting (FI)

• Access authorization is assigned per client. You
  must create a user master record for each user in
  the client where he or she wishes to work.
• The SAP System is delivered with the clients 000
  and 001 - these clients already contain default
  settings.

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Company
Financial Accounting (FI)

• Consolidated financial statements are created at
  the company level
• A company can include one or more company codes
• All company codes must use the same chart of
  accounts and fiscal year
• Company is not required in the definition of an
  enterprise (optional)

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Financial Accounting (FI)
Client
Company
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Chart of Accounts
Financial Accounting (FI)

• A listing of the accounts (assets, liabilities,
  equity, revenues, and expenses) that are
  contained in the General Ledger
• A chart of accounts must be assigned to every
  company code in order to create the General
  Ledger for that company
• Several company codes can use the same chart of
  accounts

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Financial Accounting (FI)
United States Chart of Accounts
Canadian Chart of Accounts
Company Code 110
Company Code 117
Company Code 010
Company Code 038
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Financial Accounting (FI)
Client
Company
Chart of Accounts
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Company Code
Financial Accounting (FI)

• A legally independent entity
• The smallest organizational unit for which
  accounting can be carried out
• Business transactions are processed at this level
• Accounts are managed at this level
• Legal financial statements, such as the balance
  sheet and the income statement, are generated at
  this level using the General Ledger balances

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Financial Accounting (FI)
Client
Company
Chart of Accounts
Company Code
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Fiscal Year Variant
Financial Accounting (FI)

• Specifies the accounting fiscal year for
  reporting purposes
• Special periods are created to aid in the
  quarterly or year-end adjusting process completed
  prior to preparing financial statements
• A single fiscal year variant is assigned to each
  company code

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Financial Accounting (FI)
Client
Company
Chart of Accounts
Fiscal Year Variant
Company Code
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Credit Control Area
Financial Accounting (FI)

• An organizational unit or area of responsibility
  created to control customer credit limits
• A company code is assigned to one and only one
  credit control area
• Multiple company codes can be assigned to one
  credit control area

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Financial Accounting (FI)
Client
Company
Chart of Accounts
Fiscal Year Variant
Credit Control Area
Company Code
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Consolidation and Business Areas
Financial Accounting (FI)

• Company
• A company is an organizational unit in Accounting
  which represents a business organization
  according to the requirements of commercial law
  in a particular country.
• Business Areas
• A unit in an enterprise that groups product and
  market combinations as homogeneously as possible
  for the purpose of developing unified business
  policy.

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Financial Accounting (FI)
Client
GM Corp. Chart of Accts
General Motors
Corporate Fiscal Year Var.
GMCorporate Credit CA
Consolidation of Company Codes
Business Areas
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Plant
Materials Management (MM)
Integration

• Lowest valuation area
• Organizational level where Material Requirements
  (MRP) runs
• Generally used to describe a production site, a
  distribution center or centralized warehouse
• May be a physical or logical unit

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Valuation Area
Materials Management (MM)
Integration

• The valuation area determines at which level a
  material is valuated (inventory value is
  established)
• SAP R/3 allows valuation at the company code or
  plant level, but recommends valuation area be set
  at the plant level

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Storage Location
Materials Management (MM)

• Subdivision of a plant
• Where materials are managed (inventory
  management)
• Raw Materials
• Maintenance, Repair, and Other (MRO)
• Finished Product
• May be a physical or logical unit

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Organizational Relationships
Materials Management (MM)

• Plant/Storage Location

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Purchasing Organization
Materials Management (MM)
Integration

• Organizational unit responsible for the
  procurement of materials and services.
• SAP requires that purchasing organizations be
  assigned at the plant level
• A purchasing organization can be assigned to more
  than one plant
• A purchasing organization can be assigned to a
  company code

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Organizational Relationships
Materials Management (MM)

• Plant/Purchasing Organization (1)

One plant multiple purchasing organizations
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Materials Management (MM)
Organizational Relationships(continued)

• Plant/Purchasing Organization (2)

Each plant has its own purchasing organization
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Materials Management (MM)
Organizational Relationships(continued)

• Plant/Purchasing Organization (3)

Plant P001
Plant P002
Purchasing Organization P001
One purchasing organization for multiple plants
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Materials Management (MM)
Organizational Relationships(continued)

• Plant/Purchasing Organization (4)

One purchasing organization for multiple company
codes
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Purchasing Group
Materials Management (MM)

• Responsible for specified purchasing activities
• Often used to identify individual buyers
• Used for reporting

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Materials Management (MM)
Organizational Relationships

• Purchasing Organization/Purchasing Group

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Organizational Structure
Materials Management (MM)
Can you think of any other possible
configurations? Consider some of the
relationships in previous slides.
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Warehouse Management
Materials Management (MM)
Integration

• Not required for the purchasing functionality of
  SAP R/3
• A separate module in the SAP R/3 environment
• Many functions and elements can be performed
  outside of the module

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Warehouse Management Elements
Materials Management (MM)
Integration

• Receiving, identifying and sorting goods
• Placing goods into storage bins
• Taking inventory
• Monitoring and inspecting goods in storage
• Preplanning distribution of materials
• Picking and accumulating orders
• Packaging, loading and shipping goods

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Warehouse Management Relationships
Materials Management (MM)
Integration
Comp Code
Inventory Management (MM)
Plant
Storage Loc.
Warehouse
Aisle
Storage Rack
Warehouse Management (WM)
Quantity
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Sales Organization
Sales and Distribution (SD)

• Sales Organization
• Sells and distributes products
• Negotiates terms of sales
• Responsible for these business transactions
• Critical organization element to the definition
  of business markets
• A sales transaction is linked to only one Sales
  Organization

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Sales Organization(continued)
Sales and Distribution (SD)
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Distribution Channel
Sales and Distribution (SD)

• Identifies how products and services reach the
  customer
• Can be assigned to one or more Sales Organizations

1
Distribution Channel
1
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Sales and Distribution (SD)
Distribution Channel(continued)
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Division
Sales and Distribution (SD)

• Often times used to define product line
  distribution
• Organization level to which customer specific
  information and requirements are maintained (e.g.
  pricing, partial delivery)
• Assigned to one or more Sales Organizations

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Division(continued)
Sales and Distribution (SD)
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Sales Area
Sales and Distribution (SD)

• Sales Area comprised of
• Sales Organization
• Distribution Channel
• Division
• Will be used to link together the organizational
  aspects of sales to customers
• Used for statistical analysis

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Sales Area(continued)
Sales and Distribution (SD)
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Sales Area(continued)
Sales and Distribution (SD)
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Internal Sales Organization
Sales and Distribution (SD)

• Typically defines a territory or market
• Linked to one or more Sales Areas
• Optional organization structure

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Sales Office
Sales and Distribution (SD)
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Sales Group
Sales and Distribution (SD)

• Sales Group
• Sub-division of a sales office, territory or
  market

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Sales Person
Integration
Sales and Distribution (SD)

• Sales Person
• Defined in Human Resources (HR) Personnel
  Admin.
• Specifically defines an individual rather than a
  position (sales rep.) in sales processing

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Internal Sales Organization
Sales and Distribution (SD)
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Shipping and Loading Points
Sales and Distribution (SD)

• Shipping Point
• Location that performs all delivery related
  activities
• Assigned a factory calendar
• A delivery can be processed from only one
  shipping point
• Loading Point
• A subdivision of the shipping point used for more
  specialized handling

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Shipping Organization
Sales and Distribution (SD)
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FI and CO

• Finance Controlling
• Key modules for SAP implementation

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Goals and Objectives
Financial Accounting (FI)

• Financial accounting is designed to collect all
  of the data needed to support the preparation of
  financial statements for external users

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Target Audience
Financial Accounting (FI)

• External
• Legal Authorities
• Banks
• Auditors
• Shareholders
• Insurance
• Taxing Authorities
• Media
• Financial Analysts

• Internal
• Executives
• Senior Management
• Accounts
• Administration Staff
• Employees

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Components of Financial Accounting
Financial Accounting (FI)
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Goals and Objectives
Controlling (CO)

• Managerial accounting is designed to collect data
  for the preparation and analysis of reports for
  use by internal users

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Target Audience
Controlling (CO)

• Executives
• Senior Management
• Department Managers
• Controllers
• Cost Accountants

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Components of Managerial Accounting
Controlling (CO)
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Comparison
Controlling (CO)
Financial Accounting (FI)

• Managerial Accounting
• Cost Center Accounting
• Profit Center Accounting
• Product Costing
• Profitability Analysis
• Different Valuations
• Flexibility

• Financial Accounting
• External Accounting
• Balance Sheet
• Profit Loss Statement
• Legal Requirements
• Standards

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Comparative Reporting
Controlling (CO)
Financial Accounting (FI)
Liquidity Calculation
Financial Accounting (FI)
BalanceSheet
Income Statement
External Reporting
CostCenterReports
Product CostsReports
Managerial Accounting (CO)
ProfitMargin
Profit Center Reports
Internal Reporting
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Interrelated andClosely Connected
Controlling (CO)
Financial Accounting (FI)
Income Statement Bal.
Sheet Financial Accounting
(FI) Transaction Document Amount G/L Account
Cost Center 1900012432 (CO) Transaction
Document Cost Center Cost Element 20000657
Bank
Supplies Exp.
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Controlling
Cost Center
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