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  • LEARN HOW TO CREATE MATERIAL MASTER RECORDS IN SAP

    CONCEPT OF A MATERIAL MASTER

    The material master is used to store all the data for a material in SAP. This data is made available to other transactions and modules such as inventory management, production planning, shipping and quality management as and when required by SAP via the inter-module integration. The material master stores information pertaining to all the materials that are used by a company code, whether it is manufactured in the company code or the company code simply deals in trading of that material. The material master contains the following data sets:

    • GENERAL DATA: The general data consists of the material name, material description, weight, etc. The general data contains general information about the material which is made available across the various models in SAP.
    • PLANT DATA: The plant data includes information about the material related to the plant where it is available. It includes information about storage conditions, hazardous conditions, unit of issue, shelf life data, etc.
    • SALES DATA: The sales data includes information which is required at the time of the sale of the material. It includes information like the costing of the material, valuation of the material, pricing of the material, stock availability, etc.

    The total data for the material master is stored in multiple tables. The general data pertaining to a material is stored in the MARA table while the plant data is stored in the MARC table. The sales data for the material is stored in the MVKE table. All these tables are accessed for information about the vendor by the FI and the SD module.

     MATERIAL MASTER DATA TABLES

    FIGURE 1 (MATERIAL MASTER DATA TABLES)

  • LEARN ABOUT SAP SPECIAL GENERAL LEDGER TRANSACTIONS

    Introduction To Sap Special General Ledger Transactions

    All the transactions carried out by a business must be reflected in the general ledger accounts in order for them to be available and displayed in the financial statements like the balance sheet or the profit and loss statement. The vendor and customer accounts are created as sub ledger accounts. These are linked to the general ledger by means of the vendor and customer reconciliation accounts respectively.

    Therefore, if any entry is passed to any of the vendor or the customer account, then a duplicate entry is passed to the corresponding reconciliation account in the general ledger.

    It is necessary at times to post some special transactions related to vendors and customers to general ledger accounts, other than the vendor and customer reconciliation accounts. This allows the special transactions to be displayed separately in the general ledger as well as the sub ledger. Such a requirement may arise because of statutory reporting requirements or for some other internal reasons.

    For example, in normal general ledger transactions, the accounts payable is netted against the accounts receivable for a partner who acts both as a vendor as well as a customer while executing the automatic payment program. But in case of certain special transactions like down payments, the down payment amount must not be netted with the receivables or payables. Therefore, a transaction like down payment must be considered as a special general ledger transaction.

    In order to record the special general ledger transactions separately from the normal general ledger transactions, alternative reconciliation accounts are defined. The special general ledger transactions are then posted to these alternative reconciliation accounts in the general ledger. This allows the balance of these transactions to be displayed separately on the balance sheet.

    The following major special general ledger transactions are available in the standard SAP system. The special general ledger indicators used to identify the special general ledger transactions are mentioned in the brackets:

    • Down payments (A)
    • Down payment requests (F)
    • Bills of exchange receivable (B)
    • Letter of Credit (L)
    • Payment requests (P)
    • Guarantees (G)
    • Reserves for bad debt (E)
    • Security deposits (H)

    Different Types Of Special General Ledger Transactions

    The special general ledger transactions are categorized into different types on the basis of business as well as technical factors. This results in two different classifications of special general ledger transactions.

    The business related factors represent the main purposes of the special general ledger transactions are used. On the basis of the business related factors the special general ledger transactions can be categorized into the following three types:

    • RELATED TO DOWN PAYMENTS: The down payment requests and down payments are the special general ledger transactions provided by SAP to deal with business scenarios where an advance payment is made by a customer or is made to a vendor, for future delivery or receipt of products and services respectively.
    • RELATED TO BILLS OF EXCHANGE: Bills of exchange are used by businesses when transporting goods across countries. These special ledger transactions are provided by SAP to deal with business scenarios where businesses are involved in exchange of goods across countries via the banking channel using bills of exchange.
    • OTHER SPECIAL GENERAL LEDGER TRANSACTIONS: SAP allows other special general ledger transactions such as Security deposits, etc. to be configured as per the requirements of the business. These configurations can be done by defining the special G/L indicator, posting keys and the alternative reconciliation accounts.

    On the basis of technical factors the special general ledger transactions can be classified into the following three categories:

    • REAL POSTINGS: These are special general ledger transactions which have freely definable offsetting entry account. They usually form an item on the balance sheet. E.g. down payments. These postings are reflected in the line-item display of the sub ledger accounts and affect the overall balance of the sub ledger accounts.
    • STATISTICAL POSTINGS: These are special general ledger transactions where the offsetting account always remains the same. The offsetting account can be defined while configuration of a statistical special general ledger posting. The system then posts the offsetting entry automatically to the offsetting account defined during the configuration.
    • NOTED ITEMS: These items serve as a reminder about the payments which are to be made or payments which are to be received. They are not displayed in the accounts but can be processed using a Dunning or payment program. These special general ledgers postings do not update the account balances and merely appear in the account line-item reports as an open item. These open items act as a reminder about the pending payments.

    Configuring Special General Ledger Transactions

    STEP 1: The special general ledger transactions are identified by means of special G/L indicators. Execute the transaction code FBKP to display the screen as shown below.

    FIGURE 1 (EXECUTE THE TRANSACTION CODE FBKP)

    FIGURE 1 (EXECUTE THE TRANSACTION CODE FBKP)

  • Dunning Letters In SAP

    Dunning in SAP is the process to send reminders to business partners from whom payments are due. SAP allows the messages which are sent to range from simple reminders to strong messages indicating legal action. SAP makes use of payment terms to identify the credit period that is offered to a particular customer and subsequently the line items for which the payments are due. The Dunning process picks up these items and sends a message to the concerned business partner reminding about the due payment.

    The Dunning program makes use of the Dunning areas to identify the entities for which the Dunning is to be carried out. It is not necessary to carry out Dunning for a company code. Dunning can be carried out for a smaller entity within a company code like a sales organization. The Dunning program also allows the Dunning charges to be imposed to customers who have delayed the payments. Interest calculation is possible in the Dunning program for the payments which have been delayed.

    Dunning Process

    Dunning Process

  • Electronic Data Interchange (EDI) In Sap

    INTRODUCTION TO ELECTRONIC DATA INTERCHANGE

    All businesses need to exchange information with their business partners during their day to day activities. Electronic Data Interchange (EDI) as the name suggests is the exchange of business documents electronically between a business and its partners over a communication network using a standard format.

    A customer might send a purchase order to the vendor with the details of the goods that he requires. On receipt of the purchase order, the vendor will produce a sales order in order to sell the goods to the customer. This will be followed by a delivery document and a billing document. The vendor will finally send the invoice to the customer along with the goods. On receiving the goods, the customer will produce the goods received note. The customer will then pass on instructions to its bank to make payment to the vendor. The bank will then issue the payment to the vendor.

    In the above example, the various documents are exchange between the business and its partners like vendors, customers, banks, etc. Electronic Data Interchange allows these documents to be exchanged electronically using communication networks in internationally accepted standard formats.

    ADVANTAGES OF ELECTRONIC DATA INTERCHANGE

    Electronic data interchange provides multiple benefits to the businesses irrespective of the industry in which they operate. The main advantages of electronic data interchange include:

    • REDUCTION IN DATA ENTRY ERRORS: In legacy systems, the data from the received documents needs to be manually entered into the computer. This manual entry is prone to human error. Electronic Data Interchange removes this problem by avoiding the entry of the same data at multiple stages of a business cycle manually.
    • FASTER PROCESSING OF DOCUMENTS: Documents which are transmitted electronically can be processed as soon as they are received. Sending the documents manually by a courier service or post office will take a considerable amount of time.
    • REDUCTION IN THE USE OF PAPER: Electronic Data Interchange allows all the information to be communicated electronically. This allows all business operations to be carried out without using a single piece of paper. This not only saves the cost incurred due to the use of paper but also makes the entire operation environment friendly. It is difficult to edit the content printed on a paper. In contrast, electronic data can be edited as many times as required.
    • REDUCTION IN COSTS: Due to the above mentioned advantages, the cost of operations reduces as the efficiency of conducting in the business increases. Electronic data interchange allows the businesses to concentrate on the information that they need to communicate rather than concentrating on the logistics of sending the information.
    • EDI DOCUMENTS ARE A LEGAL STANDARD: The documents transmitted and received in the electronic form are considered as legal documents and can be used for reporting purposes.

    THE ELECTRONIC DATA INTERCHANGE PROCESS

    The electronic data interchange process consists of exchanging information between a sender and receiver. Both the sender and receiver must have end applications which can process information transmitted electronically. The basic components of the electronic data interchange process are shown in the figure below.

    SAP EDI - THE ELECTRONIC DATA INTERCHANGE PROCESS

    SAP EDI – THE ELECTRONIC DATA INTERCHANGE PROCESS

  • What Is SAP HANA In-Memory Computing

    This article is from one of my colleagues and is designed to give you a quick introduction to SAP HANA and how in-memory computing differs from the traditional design.

    SAP HANA: IN MEMORY COMPUTING

    SAP High Performance Analytic Appliance (HANA) or in-memory computing is the latest technology offered by SAP. SAP HANA allows the processing of massive amounts of data in real-time. Many large business using SAP records millions of transactions every year. These transactions are recorded in the SAP database and can be used by various SAP modules such as the SAP BI module to generate reports for senior management for decision-making purposes.

    It often takes a a great deal of time to extract and process the millions of transactions that are recorded every year to produce KPI’s etc… which can be used by management teams to make effective business decisions. This often results in a time lag for reporting.

    This can often impact the efficiency and effectiveness of decision making processes. SAP HANA or in memory computing aims to overcomes this problem by providing real-time analysis of transactional data allowing management teams to have access to the most up to date picture of their business. For example, SAP HANA allows the marketing managers to have access to real-time sales data even before the customer has left the retail store.

    SAP HANA uses the latest in the hardware as well as software technologies to achieve the objective of processing huge amounts of data in real-time. SAP HANA is just a technology involving a few tools and does not replace the existing SAP modules in any way. It consists of tools for storing and retrieving data from the in-memory database (IMDB) and the new proprietary SAP database optimized for in memory computing. SAP HANA therefore makes the use of ERP systems even more meaningful and important for businesses.

    TRADITIONAL COMPUTING VERSUS IN MEMORY COMPUTING

    In traditional computing, the operating system, applications and other data is stored on spinning hard disks. This data is retrieved from the hard disk and passed to the random access memory (RAM) as and when required and then processed by the Central Processing Unit (CPU). The main disadvantage of this model is the bottleneck created in extracting the data from the spinning hard disks.

    The spinning hard disk forms the secondary memory which is very slow when compared to the RAM. Therefore, with traditional computing system design a lot of time is wasted in extracting the data from the hard disk and moving it to the fast memory i.e. RAM.

    FIGURE 1 (TRADITIONAL COMPUTING)

    FIGURE 1 (TRADITIONAL COMPUTING)

    SAP HANA removes this bottleneck by storing the entire database in RAM in real-time.

  • Learn How To Create An SAP General Ledger Account For COA & Company Code

    Concept Of General Ledger Accounts

    The SAP general ledger is similar to the general ledger used by accountants to record business transactions using the double entry accounting system. The general ledger accounts are used by the businesses to record all the day to day transactions. These transactions, recorded throughout a certain period are then used later on to create the financial statements like the balance sheet, profit and loss statement and the cash flow statement. This same data can also be used to create reports for internal reporting and auditing purposes. The same data can be provided to modules like business intelligence to carry out advance analysis.

    It is necessary to enter information about the general ledger account into ypur SAP system before you can used it to record business transactions. The master record of the general ledger account contains all the information which is needed by other modules to use that account. Some of this information is specific to a company code like the currency in which the account balances are maintained, whereas some of the information about the general ledger account is common across company codes like the description of a tax account.

    The general ledger master record has a total of six tabs to store the various blocks of information about the general ledger account. Three of the tabs contain information about the general ledger account which is specific to a company code while the other three tabs contain information about the general ledger account which will remain common across all company codes. On the basis of the information being entered for a general ledger account, it can be created in the following three ways:

    •  IN COMPANY CODE:The company code data includes three tabs i.e. control data, bank data and information. These three tabs include information about the G/L account which is specific to the particular company code in which the G/L account is being created like the tolerance group of the account.

    General Ledger Account Company Code Data


    • IN CHART OF ACCOUNTS:The chart of accounts data of the G/L account includes three tabs i.e. description, keyword and information as shown in figure 2 below. The Chart of Accounts data about the general ledger is common across company codes like the account number. This data can be entered once at the Chart of Account level and can be used by multiple company codes. This saves the user from entering the same data again and again. It also ensures greater consistency and reduces the possibility of errors due to manual data entry.
  • Want to Learn SAP ABAP? The full Video Course Is Ready – What Next?

    I'm Happy... I just learnt SAP ABAPEarlier this week I finally completed the full version of the ‘Beginners Guide To ABAP‘. I decided to give the course its own website so not to get muddled up with the mixed bad of SAP content here.

    Lots of people jumped on-board when I released it which I am super happy about. The course ended up taking me around 1 year to complete. This is way longer than I thought it would. Partly due  to work commitments, well actually a lot due to work commitments, but also down to underestimating just how much work is involved in producing a quality training product.

    Whilst making the videos and editing afterwards there was lots of content that was given the axe for all sorts of reason.

    1. Poor video.
    2. Poor Sound.
    3. What I recorded didn’t make sense!!
    4. I could go on and on.

    Goal #1 Achieved

    When I finally finished editing the last video I thought… finally the job is done. That feeling didn’t last long. Then came to realisation that I had another job – building a website to house the course.

    After a bit of domain name searching I came upon abapcourse.com. Then got my WordPress coding hat on and went to work. The website took me about 2 weeks to complete. It may sound a long time but I had to figure out the payment processing, membership system etc…

    Anyway, it’s done. Now I can relax a little and I hope the students who are taking the course really apply themselves and learn ABAP well. The course has taken a lot of work on my part and I have put my heart and soul into making it the most affordable and high quality course on SAP ABAP on the interwebs.

    I would love to know your thoughts and if you have any questions just let me know. Heck, hit me up on Skype if you want … pete_m1 (no spam please).