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During my years of teaching SAP, I always enjoyed the Q&A portion of each class.   Being able to ask questions and then actually get the expected answers back was quite rewarding.

 

As a continuation of my first blog SAP Education: “I am new to SAP and need to learn to make it work!”, I will create a series of postings dedicated to a discussion about SAP’s primary solution areas.  Each weblog will contain a series of questions and answers to test your knowledge of the specific SAP solution.  Don’t worry, the answers to the questions will be provided at the end of each blog.

 

SERIES 1 – How much do you know about…SAP ERP Financials – Financial Accounting?

 

Let’s start the series with 20 questions related to the SAP ERP Financials components including General Ledger, Accounts Payable, and Accounts Receivable.   See how well you can do without peeking at the answers:

Q1: Can SAP Financials automatically net balances for the same vendors or customers?

Q2: Can SAP Financials generate exception reports that identify potential duplicate invoices?

Q3: Does SAP Financials provide automatic payment functionality to be triggered by payment terms held against vendor master records?

Q4: Can SAP Financials reverse documents posted?

Q5: Is it possible to define flexible payment terms using SAP Financials?

Q6:  Within SAP Financials, are month and year-end procedures flexible, and do they permit forward-posting or back-posting of items into the relevant period, according to access rights?

Q7: Can SAP Financials generate automatic accrual for invoices not yet approved?

Q8: Does SAP Financials provide automatic reconciliation to the general ledger for all receivable items?

Q9: Does SAP Financials support customer catalogs, which record personal details of each customer, enable a variety of communication methods to be used, and allow a wide variety of user-defined customer classes?

Q10: Does SAP Financials generate documents according to user-definable numbering methods?

Q11: Does SAP Financials feature a petty cash book (all documents involving petty cash accounts are posted in the selected period, including the different line items with the account description and amount posted)?

Q12: Does SAO Financials support multiple sub-ledgers in company and multi-company processing?

Q13: Does SAP Financials support assignment of payment terms to customers to determine payment due dates and to manage credit control?

Q14: Does the SAP ERP Financials solution let users enter manual journals of different types, using different numbering systems?

Q15: Does the SAP ERP Financials solution provide flexible, user-definable accounting period tables?

Q16: Can the SAP ERP Financials solution simultaneously process online transactions, batch jobs, and transactions submitted via application interfaces?

Q17: Does SAP Financials drill down functionality reach references to original source documents?

Q18: Does SAP Financials general ledger functionality come with a flexible coding structure?

Q19: For SAP Financials, are all elements of the coding structure identifiable to income and expenditure or balance sheet items, identifiable to balances being carried forward, or consolidated onto balance sheets when appropriate during year-end processing?

Q20: What full management and revenue information does SAP software provide?

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Did you think the questions were hard?  How well did you do?  Here are the answers:

Q1: Can SAP Financials automatically net balances for the same vendors or customers?

Answer:  Customer and vendor accounts can automatically be linked in SAP® software, and payments netted.  Customer and vendor balance displays may also be shown with both customer and vendor transactions, and the net balances.

Q2: Can SAP Financials generate exception reports that identify potential duplicate invoices?

Answer:  SAP® software does not provide standard functionality for generating exception reports that identify potential duplicate invoices, and the report would need to be written.   A setting in the vendor master enables checking for duplicate invoices upon invoice entry.  If this setting is checked, the system checks for duplicates upon invoice entry and displays a warning or error message to the user.  During the check for duplicates, the system compares the following entered attributes in the standard system: reference document number, invoice date, invoice amount, currency, vendor, company code.  You have the option to check for duplicates on some, or all, of these criteria.

Q3: Does SAP Financials provide automatic payment functionality to be triggered by payment terms held against vendor master records?

Answer:  Payment terms held against original purchase orders (which are typically defaulted from supplier information) are used to determine when payments should be made to suppliers – assuming all payment conditions are met.

Q4: Can SAP Financials reverse documents posted?

Answer:  Payment documents can be reversed, which in turn reverses the status of the appropriate invoice(s) to unpaid.  Detailed audit trails of all postings and reversals are maintained.

Q5: Is it possible to define flexible payment terms using SAP Financials?

Answer:  Payment terms are fully configurable in SAP® software; for example, payment schedules can be defined.  Payment terms can determine valid cash discount rates, baseline dates for payment, as well as terms for instalment payments.  You can also specify particular G/L account line items to be applied with/without certain terms. For example, a cash discount can be applied to the goods, but not to the shipping.

Q6:  Within SAP Financials, are month and year-end procedures flexible, and do they permit forward-posting or back-posting of items into the relevant period, according to access rights?

Answer:  Yes, the system SAP® ERP Financials solution fully supports flexible posting periods. This can be a posting to a prior period or postings in the future, providing the necessary periods and relevant security have been set up.

Q7: Can SAP Financials generate automatic accrual for invoices not yet approved?

Answer:  Accruals for parked invoices are not automatic, but can be automated.

Q8: Does SAP Financials provide automatic reconciliation to the general ledger for all receivable items?

Answer:  The accounts receivable functionality of SAP® software is fully integrated with the general ledger, therefore, as soon as a document is posted to accounts receivable it is automatically reflected in the general ledger. This reduces the need for any reconciliation, as there is only one document in the SAP application that is relevant for both the general ledger and accounts receivable.

Q9: Does SAP Financials support customer catalogs, which record personal details of each customer, enable a variety of communication methods to be used, and allow a wide variety of user-defined customer classes?

Answer:  Yes, the SAP® ERP Financials solution supports customer catalogs or master data, that captures key information or personal details for each customer.   Examples of this data includeds a variety of communication methods to be used, and allow a wide variety of user-defined customer classes. All of these details are maintained as standard components of the customer master data. Customer classes can be set up in a variety of ways such as control accounts or account groups that can be used to differentiate between types of customers.

Q10: Does SAP Financials generate documents according to user-definable numbering methods?

Answer:  Yes, user-definable numbering methods are supported as standard for all documents. All transactions in the SAP® ERP Financials solution are represented as document types. The document types are two positions in length; therefore, the number of document types is supported by permutations of a two-digit alphanumeric code. Each document type is assigned to a unique number range, that is automatically assigned when posting.

Q11: Does SAP Financials feature a petty cash book (all documents involving petty cash accounts are posted in the selected period, including the different line items with the account description and amount posted)?

Answer:  SAP software has standard functionality for cash journals (that is, petty cash transactions), and a standard cashbook report is delivered for this. SAP also offers cash forecasting and liquidity forecasting to assist in analyzing present and future cash positions.

Q12: Does SAO Financials support multiple sub-ledgers in company and multi-company processing?

Answer:  SAP® software supports multiple standard sub-ledgers, such as accounts receivable, accounts payable, assett accounting, and so on. Non-standard sub-ledgers can also be created SAP’s special purpose ledger to analyse existing data down to a lower level, for example, currencies and so on.

Q13: Does SAP Financials support assignment of payment terms to customers to determine payment due dates and to manage credit control?

Answer:  Yes, payment terms in the SAP® solution are typically assigned to the customer master record information. These terms are then delivered as defaults during standard processing, however can be overridden at entry time if processing requires.  The payment terms provide the flexibility to give different customers different payment due dates and then determine any automated accounts receivables processing for credit management, aged debt analysis or dunning and collections.

Q14: Does the SAP ERP Financials solution let users enter manual journals of different types, using different numbering systems?

Answer: The SAP ERP Financials solution lets users enter manual journals of different types using different numbering systems. Journal types in SAP software are represented as document types. The document types are two digits in length and alphanumeric; therefore, the number of journal types is supported by the permutations of a two-digit alphanumeric code. Each document type can also be assigned to a separate number range, which can be assigned automatically or manually.

Q15: Does the SAP ERP Financials solution provide flexible, user-definable accounting period tables?

Answer: The SAP® ERP Financials solution provides full support for flexible, user-definable accounting period tables. SAP software supports up to 365 posting periods, that is, every day can be treated as a posting period, and supports up to four special periods, for year-end adjustments or company-specific requirements.

Q16: Can the SAP ERP Financials solution simultaneously process online transactions, batch jobs, and transactions submitted via application interfaces?

Answer: The SAP ERP Financials solution provides full support for simultaneously processing online transactions, batch jobs, and transactions submitted via application interfaces.

Q17: Does SAP Financials drill down functionality reach references to original source documents?

Answer: The SAP® ERP Financials solution is a fully integrated solution that supports full top-down drill down. This includes drilling down to the originating document, for example, the purchase order or sales order.

Q18: Does SAP Financials general ledger functionality come with a flexible coding structure?

Answer:  The general ledger functionality of the SAP ERP Financials solution comes with a flexible coding structure. The coding block within SAP software, which can be equated to the traditional chart of accounts, consists of many predefined segments, such as company, business area, account code, cost center, internal order, project, activities, statistical key figures, customer and vendor codes, plants and locations, and products. Users can also define extra segments for which the software does not already have a suitable field. Any code that is set up is defined only once and is immediately available for use throughout the system, subject to a user’s security profile.

Each of these segments is treated independently, thus allowing groups or hierarchies to be built above them. Accounts can therefore be grouped together to give employee costs, premises costs, and so on. Cost centers can be grouped into departments, and departments can be grouped into faculties.

If an organization changes, its users can quickly and easily change the coding structure hierarchy online using point-and-click facilities to reflect these changes. Multiple hierarchies can be maintained on the same data for different views of an organization. Changes in these hierarchies are also date stamped, which means that users can have a view the structure before it was changed.

SAP software supports multiple types of accounts, including capital, revenue, and control accounts, as well as statistical key figures and activity types. This enables an organization to use this information in management reporting, such as costs per head of population by area, or fair apportionment of overheads by distributing support costs by the number of hours a cost center was used or by a department’s head count.

Q19: For SAP Financials, are all elements of the coding structure identifiable to income and expenditure or balance sheet items, identifiable to balances being carried forward, or consolidated onto balance sheets when appropriate during year-end processing?

Answer:  Identification of account types is defined within the general ledger master data. Further groupings and categories of accounts support the identification of accounts, and customizable rules allow for controlled postings to certain account types, such as income or expense accounts. Furthermore, certain settings within specific processes are predefined, such as “account assignments,” and in doing so, accounts for year-end closing are predefined.

Q20: What full management and revenue information does SAP software provide?

Answer:  The general ledger functionality of SAP software helps companies improve the efficiency and effectiveness of their financial and managerial accounting practices. Its flexible coding block improves financial reporting transparency, reduces reconciliation and internal communication expenses, and leaves more time for analysis by supporting legal, segment, and management reporting using one consistent, multidimensional database. At any point during a period, users can extract full management information by associated business segments, providing the organization with accurate information to manage its financial performance.

Furthermore, SAP’s closing cockpit for period-end closing of individual financial statements reduces the time required to close the books. The closing cockpit assimilates all relevant closing activities and gives clerks and management a simplified overview of the entire closing process. Financial managers can also schedule and begin the closing process using an intuitive user interface. To enhance intercompany reconciliation of open items in customer and vendor accounts, the SAP ERP application now enables users to reconcile open items and intercompany balances in general ledger accounts. Users can also load intercompany data from non-SAP systems using a new interface and then audit, balance, and reconcile this data. Key benefits include the following:

  • Reduced costs through automated processes, user collaboration support, and easy access to all closing activities
  • Improved employee productivity and reduced employee costs
  • Significant reduction in the time needed to reconcile intercompany activities
  • Reduced errors through transparency and support for compliance through a concise overview of the closing status and remaining tasks.

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In my experience, I found that answers, at times, provide the basis for more questions.  If that truly is the case and you want to learn more about the SAP ERP Financials solution or the individual General Ledger, Accounts Payable, or Accounts Receivable components, I recommend you try the AC010, AC200, AC201, AC202, AC205, AC210, and AC212 training courses provided within SAP Education’s Financial Accounting Learning Map.   

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7 Comments

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      1. Gregory Misiorek
        how about this one?:

        You have used the copy function to copy data from version “A” to version “B”. Thereafter, both versions are in sync. However, when you subsequently update or modify data in version “A”, it will differ from the data in version “B”. How does SEM-BCS release 6.0 support synchronization, to ensure version “B” will be updated immediately after version “A” is modified?
        (0) 
    1. samaresh Datta
      it is regarding Q2 = Can SAP Financials generate exception reports that identify potential duplicate invoices?

      Can we make the check mandatory , say for reference doc no. & date combination ?

      (0) 
  1. Siva Rama Krishna Yanamandra
    In my openion you could have added more explanation in how the reconciliation will be happen in the background like below

    Modified Answer:  The accounts receivable functionality of SAP® software is fully integrated with the general ledger, therefore, as soon as a document is posted to accounts receivable it is automatically reflected in the general ledger through the Reconciliation accounts defined in the customer master. we can show cusotmer category wise.  This reduces the need for any reconciliation, as there is only one document in the SAP application that is relevant for both the general ledger and accounts receivable.

    (0) 

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