SAP System Understanding
The SAP system is a top ERP system. ERP is a short form of Enterprise Resource Planning while SAP is the short form of Systems, Applications, and Products in the data processing.
The SAP system has many modules such as FI (Financial), CO (Controlling), SD (Sales & Distributions), MM (Material Management), and HR (Human Resources). These are the basic modules of the SAP system.
The SAP system is one of the best ERP software available for corporations. Here I am going to discuss some of the main submodules of the SAP system. SAP Finance or SAP FI includes General Ledger (GL), Account Payable (AP), Account Receivable (AR) and Asset Accounting (AA). Other than these modules, SAP also has some other sub-modules or parts such as new General Ledger (New GL), Project System (PS), Financial Supply Chain Management (FSCM) and Treasury and Fund management. Moreover, the SAP system is coming with many industry-specific suits to give more easy and comfortable solutions to different industries.SAP provides Apparel and Footwear industry solution (AFS), Reinsurance and collection (FSCD) for the insurance industry, Oil and gas specific suit for Oil and gas industry, Retail suit for retail industry and finance solution for the Finance industry.
SAP also introduced its Big Data solution in SAP HANA. SAP HANA is a short form of High-Performance Analytic Appliances. It is still emerging to provide an in-memory computing solution for the SAP system.
Live Data Flow in Net Like Structure for SAP System
The SAP system is a net-like structure that keeps connecting all of the above areas. SAP system provides real-time data flow among different departments. This means one department will get real-time data from another department inside the system itself. This is a very important aspect of an easy transaction for a large organization.
For example, in order to cash (OTC) cycle is a combination of both sales, distribution as well as finances integration. To run this cycle effectively, one needs both sales and finance integration for data. In addition, we can always link up a third-party tool such as vertex and other software.
Modules in SAP System
SAP system has many submodules such as Finance Accounting (FI), Controlling (CO), Project System (PS), Financial Supply Chain Management (FSCM), Sales and Distribution (SD), Material Management (MM), Production Planning (PP), Customer Relation Management (CRM), Human Resources (HR), Warehouse etc.
SAP system also provides many other industry-specific submodules. There are many other industry-specific modules for SAP such as SAP Travel, SAP security, SAP appear and footwear SAP AFS and many more. The SAP provides modules for each and every business domain.
On top of these modules, there are many integration points such as Order to Cash (OTC) and Procure to Pay (PTP), FI-HR integration, etc. There are many third-party solutions such as Third-party tax ware, Third-party analytics solutions such as Runbook to make SAP system enhanced.
Basics of SAP Finance (SAP FI)
Here are some basic settings for SAP FI modules.
SAP Financials have two major modules:
1) Finance (FI) and
2) Controlling that is CO
SAP FI module uses for outside reporting purposes like the IRS and other accounting entries. SAP CO module uses mostly for internal reporting purposes. FI and CO both together know as SAP FICO. Some other important modules related to FICO are Project System (PS) and Financial Supply Chain Management (FSCM).
General Ledger (GL), Account Payable (AP), Account Receivable (AR) and Asset Accounting (AA) are the main four submodules in FI. Moreover, Integration points with SD and MM that is Order to Cash (OTC) and Procure to Pay (PTP) cycles respectively are also very important when considering SAP FICO. Also, there are other integration points to consider such as FI-CO, FI-PS, and FI-HR.
Here are some outlines and some most important topics in some top submodules in FI. Although this material is strictly based on my understanding and knowledge and also it is a very high-level concept.
General Ledger (GL): General Ledger consists of General ledger accounts, Charts of account (COA), Retained earning account, Fiscal year variant, posting period variant, Posting/parking and blocking of a document.
SAP Account Payable (AP): It includes vendor master data, invoice posting, outgoing payment, residual/partial payment and automatic payment program (APP).
SAP Account Receivable (AR): It includes Customer master data, invoice posting, house bank configuration, lockbox, electronic bank statement (EBS) and dunning.
SAP Asset Accounting (AA): It includes asset master data, charts of depreciation, asset types, asset classes, and depreciation methods.
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SAP New General Ledger (SAP New GL)
New General Ledger is the new functionality of SAP ECC 6.0. It is basically the same General Ledger (GL) but with some additional new functionality. Here is that new functionality.
- Parallel Ledger
- Document splitting
In addition to these new functionalities, new GL allows seamless integration with other modules allowing data to be used for a quick turn around of data for reporting purposes.
Reporting in SAP can be done at various levels. Reporting can be done at General Ledger (GL), Account Payable (AP), Account Receivable (AR) and at FI levels also. Financial Statement Version can be drawn down at various levels as below.
- Financial statement version
- General Ledger
- Accounts Payable
- Accounts Receivable
- Assets Reports
Overall, SAP is a great ERP tool but it is complicated if you try to look at all modules at once. Try to understand the big picture if you are new to SAP. If you are experienced in one of the modules, you can slowly get introduced to other related modules if you want.
Lara Coxson on July 16, 2017:
I'm interested in studying SAP software. What is the duration of study. Any center of learning in Newark New Jersey and the course fee.
ktnptl (author) from Atlanta, GA on April 23, 2015:
Hotten on January 19, 2015:
A user in SAP does not even have to manually post a docnmeut / line item. SAP can be configured for automatic posting though an option is available for manual posting as well. Filed Under: Web Tagged With: SAP
Abhishek Pandey on May 25, 2014:
I wont to do SAP so please give me all information about SAP like duration, fee structure, syllabus & opportunity after completing this program.