Project report submitted in partial fulfillment of the requirement for

the award of the

Degree of

MASTER OF BUSINESS ADMINISTATION

Of

BANGALORE UNIVERSITY

By

Pachala Ramarao

15NPCMD077

Under the Guidance of

REVA INSTITUTE OF SCIENCE AND MANAGMENT

YALANKA, BANGALORE

2016-2017
 DECLARATION BY THE STUDENT

I hereby declare that Title of the project is the result of the project work carried out under the
guidance of (name of the guide) in partial fulfillment of the requirement of Masters Degree in
Business Administration by Bangalore University.

I also declare that this project is the outcome of my own efforts and that it has not been submitted
to any other university or Institute for the award of any other Degree or Diploma or Certificate.

Place: BANGALOR Name of the student: Pachala Ramarao

Date: Register Number: 15NPCMD077

 CERTIFICATE BY THE GUIDE

Certified that the project report entitled (TITLE OF THE PROJECT) is based on an
original study conducted by PACHALA RAMARAO under my guidance. This project report
has not formed a basis for the award of any other Degree/ Diploma of any University or
Institution.

PLACE: BANGALORE NAME AND SIGNATURE:

DATE:
 CERTIFICATE OF ORIGINALITY

This is to certify that the project entitle --------------------- is an original work of Mr.PACHALA
RAMARAO bearing Register Number 15NPCMD077 and is being submitted in partial
fulfillment for the award of the Masters Degree in Business Administration of Bangalore
University. The report has not been submitted earlier to this University / Institution for the
fulfillment of the requirement of any course of study

PLACE: BANGALORE SIGNATURE AND SEAL:

 DATE:CONTENT

1) INTRODUCTION

2) BASIC SETTINGS

3) MASTER DATA

4) DOCUMENT CONTROL

5) POSTING CONTROL

6) CLEARING

7) PARKING DOCUMENT

8) AUTOMATIC PAYMENT

9) DUNNING PROGRAM

10) CORRESPONDANCE

11) NEW G/L ACCOUNTING

12) RECEIVABLES AND PAYMENTS

13) ACCRUALS AND DEFERALS

14) ORGANISATIONAL STRUCTURE

15) MASTER DATA FOR ASSET CLASS

16) ASSET TRANSACTION

17) PERIODIC PROCESSING AND VALUATION

18) SPECIAL G/L TRANSACTION

19) DOCUMENT SPLITTING

Introduction to SAP

SAP was founded in 1972 in Walldorf, Germany. It stands for Systems, Applications and
Products in Data Processing. Over the years, it has grown and evolved to become the world
premier provider of client/server business solutions for which it is so well known today. The
SAP R/3 enterprise application suite for open client/server systems has established a new
standards for providing business information management solutions.

The main advantage of using SAP as your company ERP system is that SAP have a very high
level of integration among its individual applications which guarantee consistency of data
throughout the system and the company itself.

In a standard SAP project system, it is divided into three environments, Development, Quality
Assurance and Production.
The development system is where most of the implementation work takes place. The quality
assurance system is where all the final testing is conducted before moving the transports to the
production environment. The production system is where all the daily business activities occur.
It is also the client that all the end users use to perform their daily job functions.
SAP is a table drive customization software. It allows businesses to make rapid changes in their
business requirements with a common set of programs.

Systems Applications Products audit is an audit of a computer system from SAP to check its
security and data integrity. SAP is the acronym for Systems, Applications, Products. It is a
system that provides users with a soft real-time business application

SAP FICO

SAP FICO Stands for FI (Financial Accounting) and CO (Controlling). SAP FICO is the
important module of ERP and both FI and CO modules stores the financial transactions data.

FI TOPICS

Basic Setting & Configuration

Define Company
Define Company Code
Assign Company Code To Company
Define Business Area
Define Functional Area
Define Credit Control Area
Assign Company Code to Credit Control Area

Master Data

Data stored in SAP R/3 is categorized as

Master Data and

 Transactional Data.

Master data is the core data that is used as a base for any transaction. If you are producing,
transferring stock, selling, purchasing, doing physical inventory, whatever your activity may be,
it requires certain master data to be maintained.

Master data is data that remains unchanged over a period of time. ... For example, all personal
attributes can be stored in various SAP standard info types as records with specific validity
which are called master data. Transaction data: Data relating to the day-to-day transactions.

Example of Master Data

Material master data

Customer master data
Vendor master data
Pricing/conditions master data
Warehouse management master data (storage bin master data)

Document Control

SAP Document Management meets all these complex requirements. In addition to managing
documents, it also coordinates document processing. You can automate the entire life cycle of a
document: from document creation to document storage, from access to update. Each document
can be accessed immediately from any computer in the network.

SAP Document Management offers you a wide range of functions for managing product
documentation and ensuring problem-free data exchange between different applications.

The SAP Document Management comprises a range of functions for managing documents that
may be stored both in your SAP System and external systems.

Posting Control

In Account Management the posting control rules are used to automate processing of mass
payment transactions, and to control the continued processing if problems occur during
the posting of payment items (such as exceeding the available amount, or locks). This means it is
possible to automatically process erroneous postings in many cases without you having to
intervene manually.
This component supports rational processing of mass payment transactions.
Clearing

Document that is generated automatically for each company code involved in clearing. A
clearing document is generated in the following situations:
 Zero clearing

After running the clearing program

The document header is generated automatically; the system displays an indicator that there is a
clearing document in place of the line item.

Parking Document

You can use document parking to enter and store (park) incomplete documents in
the SAP system without performing extensive entry checks. ... When documents are parked, the
system does not update any data such as transaction figures.

In contrast to document parking, the holding documents function is merely designed to allow you
to interrupt your work on a document and temporarily save the data you have entered until you
can resume posting.

Substitution is not supported in document parking. Substitution takes place via the posting
transaction once you generate an accounting document from the parked document.

You can park data relating to customers, vendors, G/L accounts, and asset accounts. There is a
fast entry function for G/L accounts. For assets, you can only enter acquisitions..

Automatic Payment
SAP FI - Automatic Payment Run. Advertisements. Automatic Payment Program (APP)
serves the purpose of posting accounts payable like payment to a vendor based on vendor
invoices automatically. APP is used to find out due/overdue invoices and to process a list of
customer and vendor invoices to make payments in one go.

The Payment Process includes the Following Steps

Invoices are Entered

Pending Invoices are analyzed for due date

Invoices due for payment are prepared for review

Payments are approved or modified

Invoices are paid

A consistently high volume of invoices have to be processed. Accounts Payable Invoices have to
be paid on time to receive possible discounts.

Dunning Program

Dunning is a reminder to the customer or vendor to make payment on outstanding invoices. It

typically consists of a letter that summarizes the invoices that are past due and politely requests
payment to be made.

The dunning process in SAP Business One helps you monitor customer payments, track
payment history, and send letters to customers with overdue invoices

We configure dunning program for accounts receivable and accounts payable. Dunning Program
includes following configuration steps:

Dunning level.
Dunning Areas.
Dunning procedure.
Correspondence

Correspondence types define which data can be stored in the correspondence container for
creating correspondence. The correspondence output run accesses this data. Bank statements,
dunning notices, and invoices are examples of correspondence types.

The correspondence tool is the technical framework for creating correspondence and enables you
to standardize your correspondence processes and create uniform correspondence and results.

The correspondence tool manages the correspondence creation process using correspondence
containers . It has three functional areas for editing and managing correspondence containers.

Creation of correspondence requests

events
Output of correspondence containers

The correspondence is application-specific. The application groups correspondence according to

correspondence types that bundle joint attributes such as the recipient, recipients address, and
sender.

Correspondence-specific data (such as the recipient, recipients address, sender) and control
parameters are obtained in the same way for all correspondence types of an application. Business
data is obtained differently for each correspondence type

Generally, the system saves only references to the business data.

New GL Accounting

The central task of G/L accounting is to provide a comprehensive picture of external accounting
and accounts. Recording all business transactions (primary postings as well as settlements from
internal accounting) in a software system that is fully integrated with all the other operational
areas of a company ensures that the accounting data is always complete and accurate.

General Ledger Accounting is integrated with all application components of the SAP System that
generate posting data of relevance to General Ledger Accounting.

Beyond fulfilling the legal requirements, General Ledger Accounting also fulfills other
requirements for modern accounting:

Parallel Accounting
Integration of Legal and Management Reporting
 Segment Reporting
Cost of Sales Accounting

Receivables & Payables

SAP FI Accounts Receivable component records and manages accounting data of all customers.
It is also an integral part of sales management. Incoming payments can be assigned to
due receivables using user-friendly screen functions or by electronic means such as EDI.

All postings in Accounts Receivable are also recorded directly in the General Ledger.

The payment program can automatically carry out direct debiting and down payments

SAP FI Accounts Payable is used to manage and record accounting data for all the vendors. All
invoices and deliveries are managed as per vendor requests. Payables are managed as per the
payment program and all the payments can be made using checks, transfer, electronic transfers,
etc.

Postings made in Accounts Payable are simultaneously recorded in the General Ledger where
different G/L accounts are updated based on the transaction involved (such as payables and down
payments)

Payables are paid with the payment program. The payment program supports all standard
payment methods (such as checks and transfers) in printed form as well as in electronic form
(data medium exchange on disk and electronic data interchange). This program also covers
country-specific payment methods.

You can configure balance confirmations, account statements, to suit your requirement.

Accruals & Deferrals

The Accounting area includes accrual/deferral functions that you can use to assign incomings
and outgoings to the period in which they arose. You use the accrual/deferral function to
calculate the expenses (outgoings) and revenues (incomings) for a period on a certain key
date/period-end closing (for example, at the end of a fiscal year).

Accrual/deferral amounts are calculated on the basis of flows from individual transactions that
are to be accrued/deferred. The key variables for calculating the amount are the accrual/deferral
period and the flow types that are indicated as being relevant for accrual/deferral

The accrual/deferral procedure , on the other hand, describes how the expense and revenue
accounts are updated.

A distinction is made between the following accrual/deferral procedures:

 Reset or Accumulation procedure
Difference procedure

Organizational Structures

It is based on Organizational plan.

Organizational plan provides foundation of Organizational Management. An organization
uses an organizational plan to represent relationships between individual departments and
workgroups
The organizational plan uses elements called objects like Persons (P), Jobs (C), Positions
(S), Organizational Units (O), Cost Center (K) etc.
There are interfaces present that help one to build Organizational Structures.

Organizational units describe the various business units that exist in your enterprise multiple
organizational units and their inter-relationship form the Organizational structure.

Organizational Structure in FICO

Client
Operating Concern
Company
Company Code
Business Area
Controlling Area
Credit Control Area
Sales organization is an organizational unit that sells and distributes products, negotiates terms of
sale, and is responsible for these transactions. It is also responsible for business daily operations
as well as legal obligations also. One company code can have number of (many) sales
organizations.
Master Data For Asset Class

Using the asset master record, you can create, edit, and manage the master data needed for Asset
Accounting (FI-AA).

General Master Data

This part of the master record contains concrete information about the fixed asset. There are the
following field groups:

General information (description, quantity, and so on)

Account assignment information

Posting information (for example, activation date)

 Time-dependent assignments (such as, cost center)

Information for plant maintenance

Entries for net worth valuation

Information on real estate

Leasing conditions

Investment support measures

Information on the origin of the asset

Physical inventory data

Insurance data

User fields/evaluation groups.

In addition, you can create long texts for the individual field groups belonging to the general data
part of the asset master record.

Asset transaction

The business transactions are subdivided on the basis of the transaction type group
into: Transactions that influence the acquisition and production costs of fixed assets This
includes: Acquisitions, retirements, transfer postings, post-capitalization. Down Payments.
Investment support measures Manual depreciation Write-ups.
Within Asset Accounting, asset transaction types identify individual business transactions. A
transaction type has to be entered for each transaction that affects assets. Either you make this
entry yourself in the posting transaction, or the entry is automatic, based on specifications made
in FI-AA Customizing transactions.

The transaction type group, to which a which a transaction type belongs, determines the
following:

Which value fields are updated in the year segments

Whether the transaction refers to the past (for example write-ups) or to the current fiscal
year

According to which rule the start period for the depreciation calculation is
determined.

Periodic Processing & Valuation

Periodic processing comprises the tasks that must be performed at periodic intervals. Since only
the values from one depreciation area can be automatically posted online in Financial
Accounting, the changes to asset values (transactions) from other areas with automatic postings
have to be posted periodically to the appropriate reconciliation accounts.

You use certain reports and functions in Payment Engine to perform tasks on a specific date in
a defined time cycle. These reports are grouped under periodic processing.

Cross-chart of accounts specification that contains the valuation approach to be used for
performing a foreign currency valuation as part of the closing operations, for example, according
to the lowest value principle

Valuation areas are nothing but the level at which you want to valuate your
materials. SAP provides two levels of valuation Plant level and company code level.
Material valuation can happen at company code level or plant level. Material can be valuated
based on different types of procurement and this is known as split valuation. Normally
split valuation is used to valuate material in same valuation area (company or plant) differently.

Special GL Transaction

Special G/L transactions are special transactions in accounts receivable and accounts payable that
are displayed separately in the general ledger and the subledger. This may be necessary for
reporting or for internal reasons. For example, down payments must not be balanced with
receivables and payables for goods and services. Consequently, they are treated as special G/L
transactions in the General Ledger (FI-GL) Accounts Payable (FI-AP) and Accounts Receivable
(FI-AR) application components.

Special G/L transactions are already available in the standard system. However, you can change
the specifications or define your own special G/L transactions.

In the SAP System, distinctions are made between different types of special G/L transaction.
These distinctions are made according to business-related and technical factors.

On the business side, a distinction is made between:

Bills of exchange

Down payments

Miscellaneous special G/L transactions, such as guarantees.

This is achieved by posting to alternative reconciliation accounts, instead of posting to the

reconciliation accounts for receivables and payables.

Document Splitting

The item categories are used to define document splitting rules, which, depending on the
business transaction, determine which items of a document the system splits and how.
A document splitting rule is assigned to a document splitting method. To activate document
splitting, assign a document splitting method.

Document splitting allows you to display documents using a differentiated representation. In the
representation, line items are split according to selected dimensions. In this way, you can draw
up complete financial statements for the selected dimensions at any time.

Using the document splitting procedure, you can also create a segmented display of a (partial)
balance sheet according to a set of legal requirements (for example, IAS) or according to areas of
responsibility.
Document splitting has an effect on subsequent processes , such as closing operations, and on
processes in Controlling (CO).

You can only use document splitting for documents that can be uniquely assigned to a business
process. The relevant relationship is unclear when there are multiple business processes within
one document (see also active document splitting ).

Using the document splitting procedure, you can also create a segmented display of a (partial)
balance sheet according to a set of legal requirements (for example, IAS) or according to areas of
responsibility.

Consulting Process

ASAP Methodology

ASAP" is also a common abbreviation for "as soon as possible". ASAP(Accelerated SAP) is a
"

step-by-step methodology for speeding up the implementation of an SAP R/3 system. The
components of ASAP, which can be used together or individually, are called accelerators,

ASAP is an approach that is followed while Implementing regular SAP Projects. Still there are
other methodologies like ASAP FOCUS in implementing Rapid Deployment Solution sought of
projects.According to SAP redefined ASAP methodology follows below 6 phases

Phase 1: Project Preparation

Phase 2: Business Blueprint

Phase 3: Realization
 Phase 4: Final Preparation

Phase 5: Go Live Support

Phase 6: Operate.

SAP has defined a business blueprint phase to help extract information about your
company that is necessary for implementation.

Assignment 9; House bank transactions

House bank of accompany code is represented by a bank id through you can

process the transactions.it is used for the purpose of payment programme, check
deposits, automatic payment program and bank reconciliation.

A house bank in SAP is identified by a 5 character alphanumeric code. Each

house bank ID is unique within a company code and a company code can
have multiple house banks.
Each house bank in SAP system is associated with a country key
representing the country where the bank is located.
House banks can have more than one bank account id, account ID is unique
for a specific bank ID and company code. The account ID is used for entering
specifications for the payment program and for updating the G/L Account
Master records.

Followings are the procedure to create bank account

1) Create a bank account - FS00

2) Define house bank account - Fi12 (SBI bank account)
3) Create a vendor - XK01
4) Creation of Check lots - F110
5) Purchase invoice postings - F -43
6) Vendor payment postings - F-53
7) Manual issue of checks - FCH5
8) Encashment of Check - FCH6
9) Display check register FCHN

1) Creating a bank account-FS00

The steps to create bank account are as fallows

Step 1:- Define House Banks

Menu Path: SPRO > IMG > Financial Accounting > Bank Accounting > Bank
Accounts > Define house banks
Transaction Code: - FI12
Step 2:- Create Bank Key

SAP Menu Path: - SAP Menu > Accounting > Financial Accounting > Accounts Receivable
> Master Records > Bank > Create (Create bank Key)

Step 3:- Electronic Bank Statement Configuration

Sap Menu Path: - SPRO > IMG > Financial Accounting > Bank Accounting > Business
Transactions > Payment Transactions > Electronic Bank Statement > Make Global Settings
for Electronic Bank Statement

Step 4:- Manual Bank Statement:-

Sap Menu Path: - SPRO > IMG > Financial Accounting > Bank Accounting > Business
Transactions > Payment Transactions > Manual Bank Statement > Create and Assign
Business transactions

Step 5:- Define Posting Keys and Posting Rules for Check Deposit

Sap Menu Path: - SPRO > IMG > Financial Accounting > Bank Accounting > Business
Transactions > Check Deposit > Define Posting Keys and Posting Rules for Check Deposit

Step 6:- Create and Assign Business Transactions

Sap Menu Path: - SPRO > IMG > Financial Accounting > Bank Accounting > Business
Transactions > Check Deposit > Create and Assign Business Transactions

Step 7:- Define Variants for Check Deposit

Sap Menu Path: SPRO > IMG > Financial Accounting > Bank Accounting > Business
Transactions > Check Deposit > Define Variants for Check Deposit.

We created a bank account as SBI - FS00

2) Define house bank account - Fi12 (SBI bank account)

Step 1: Enter transaction code FI12 in the SAP command field and press enter
Enter the company code and enter

Step 2: Click on New Entries

Update the following fields

House Bank: Enter the 5 character alphanumeric code

Bank Key: -Enter Bank key

Communication data: - Enter the telephone number and contact person

Click on save icon to save the configured data. Successfully you have created house
bank in SAP.

Bank Accounts

Click on bank accounts option to maintain details of bank.

In next screen, update the following details.

Account id: Update the two digits account id

description: -Update the description of bank id

Bank Account number: Update your bank account number

Currency: -Update the currency of bank account

After maintain all the details, click on save button to save the configured bank

details.

Created house bank a/c in FI12

3) Create a vendor - XK01
SAP Menu Path: SAP Menu >> Logistics >> Material Management >>
Purchasing >> Master Data >> Vendor >> Central
Transaction code: XK01
Enter transaction code XK01 in the sap command field and press enter

Enter the following data

1. Company code: - Enter company code

2. Purchasing Organization: - Enter Purchasing Organization

3. Account group: Enter account group

Press enter to input the details of the vendor

Title: Select Company, Dr., Mr., and Ms.
Name: Enter the name of the vendor
Search: enter the search term
Street Address: Enter the street #, postal code city, Country, Region, and City
Language: Enter the language
Enter the VAT Reg No of the vendor

Payment transactions:-
1. Enter the appropriate payment terms

2. Select the Chk double inv.

3. Enter the appropriate payment methods such as cheque payment, Bank transfer,

and online transfer

Purchasing Organization Data:-

1. Enter the order currency, terms of payment and incoterms.

2, Enter the appropriate schema group, vendor

3. Select GR-based Inv. Verification if invoice verification is done after GR

4. Select Srv. Based inv. verf if invoice verification after service entry

5. Enter the partners for the appropriate partner functions

Press save icon to save the vendor master and vendor code in SAP is automatically generated.
The vendor code is generated for respective purchasing organization and company code.
Created a vendor in the t-code - XK01

4) Creation of Check lots - F110

You can create check lots in SAP by using one of the following navigation methods.

Transaction code: FCHI

IMG Path: SPRO => SAP Reference IMG (F5) => Financial Accounting (New)

=> Accounts receivable & Accounts payable => Business transactions =>

Automatic outgoing payment => Payment media => Check management =>

Define number ranges for checks

Step 1: Enter transaction code FCHI in the SAP command field and enter.
Step 2: Update the following fields.

1. Paying company code: Update the paying company code

2. House bank: Enter the house bank key

3. Account id: Enter the bank account id.

4. After maintaining the fields, click on change button.

Step 3: On the maintain checklist screen, click on create button

Step 4: A pop of window opens to create check lots, update the following fields

1. Lot: Update the details like lot no, check number (starting number and last

number)

2. Control data: Select non-sequential check box.

3. Additional information: Update short information and purchase data.

Created a check lots in the t-code - F110

5) Purchase invoice postings - F -43

Step 1) Enter transaction FB60 in SAP Command Field

Step 2) In the Next Screen, Enter Company Code you want to post invoice to

Step 3) in the next screen, Enter the Following

1. Enter the Vendor ID of the Vendor to be Invoiced

2. Enter Invoice Date

3. Enter Amount for Invoice

4. Select Tax Code for the Tax Applicable

5. Select Tax Indicator "Calculate Tax"

Step 4) Check for Payment Terms in the Payment Tab Page

Step 5) In the Item Details Section, Enter the Following

1. Enter the Purchase Account

2. Select Debit

3. Enter Amount for the Invoice

4. Check Tax code

Step 6) after completing the above entries check the status of the document

Step 7) Press Post Button in Standard bar

Step 8) and wait for Document number to be generated and display on the status
bar for Conformation

Vendor Invoice - F-43

6)Vender payment postings F-53:-

This function allows you to post a vendor payment manually and clear the open
item(s). Most of the outstanding invoices will be paid by payment program (F110),
but it may happen that for some rarely used bank accounts this program will not be
configured. In such cases, payment for vendor documents will be done manually
and you will need to post the bank documents using the transaction F-53.

Menu path:-

Accounting- Financial Accounting- Accounts Payable- Document entry- Outgoing

payment- F-53 - Post

Transaction code:-F-53

You entered the basic payment data. Now you need to clear your bank document
with an outstanding invoice. To do so, click Process open items Button. The system
will display full list of outstanding vendor documents:

Not all invoices are selected for processing. Select the document you want to clear
with you payment by double-clicking on it (choose document 10001113). Now the
selected document is displayed in blue and the value of the field not assigned is
equal zero.

Vender payment postings F-53

You can simulate your document before posting it. From the menu path choose
Document -> Simulate to display document overview

To post your document, click Save Button.

The message bar displays The document number XXXXXXXX was created in
company code XXXX.

7) Manual issue of checks - FCH5:-

Use this procedure to issue checks by hand in order to create a link between the checks number
issued and the payment document.
Path:-
Select accounting-financial accounting-accounts payable-environment-check information-create-
manual checks
Transaction code: - FCH5
Manual issue of checks - FCH5:-
8) Encashment of Check - FCH6

Checks and bills of exchange are still common means of payment in international transactions.
We are happy to issue bank checks on request. Moreover, we accept your checks and bills of
exchange and cash them.

Bank checks and encashment of checks

Rapid transactions, like paying with cash

Cash free payments worldwide even for recipients whose bank account
details are unknown
High level of security
Quick processing of payments

SAP Menu-Accounting-Financial Accounting-Accounts Receivable-Environment-Check

Information-Change-Additional Info/Cash

SAP Menu-Accounting-Financial Accounting-Accounts Payable-Environment-Check

Information-Change-Additional Info/Cash

SAP Menu-Accounting-Financial Accounting-Banks-Environment-Check balance-Change-

Additional Info/Cash

SAP Menu-Accounting-Real Estate Management-Real estate general contract-Postings-

Customer menu-Environment-Check Information-Change-Additional Info/Cash

SAP Menu-Accounting-Real Estate Management-Real estate general contract-Postings-Vendor

menu-Environment-Check Information-Change-Additional Info/Cash

Encashment of Check - FCH6

9) Display check register FCHN:-

This program creates a list of all check information (prenumbered checks and manual checks)
belonging to a paying company code, providing this is sufficient to fulfill the specified selection
criteria. The list is sorted according to payment method and check number. Checks voided
manually appear at the beginning and checks issued manually at the end of the list.
Path:-
Accounting - Financial Accounting - Accounts Payable - Environment -Check
information - Display - FCHN - Check register
Transaction code:- -FCHN

Display check register FCHN

1. Start the transaction using the menu path or transaction code. The Check Register screen
displays.
2. Select With Line Items radio button.
3. Perform one of the following: If Then You wish to display invoices paid on the check Select t
With Line Items radio button you wish to display summarized checklist Select W/ou t Line Items
radio button
4. Click Execute. The Check Register screen updates