Definition of enterprise resource planning (ERP)

Enterprise resource planning (ERP) refers to a type of software

that organizations use to manage day-to-day business activities such as accounting,
procurement, project management, risk management and compliance, and supply
chain operations

What is an Enterprise Structure?

What is an Enterprise Structure? SAP defines the enterprise structure as “the definition of
specific organizational units that together represent your company's business units
and divisions.” Enterprise structures are the bedrock of the SAP FI solution; without them,
you couldn't integrate and configure your program

What is SAP? | Definition and Meaning

SAP stands for System Applications and Products in Data Processing. SAP is
the market leader in ERP software and helps companies of all sizes
What is SAP ECC?
SAP ECC stands for SAP ERP Central Component. It's also
known as SAP ERP. It's one of SAP legacy applications that
originally designed to operate on a third-party database such
as Oracle and IBM DB2.
EHP
SAP Enhancement Package 8 for SAP ERP 6.0 is the latest
enhancement package (EHP) delivering innovations to
installed base SAP ERP customers.
What is a Chart of Account?

In SAP, the Chart of Accounts (COA) is defined at the client level and assigned to each
company code. It is a list of General Ledger account's master data that fall under
different account groups of a company code. This grouping mechanism helps to develop
better financial reports.

The chart of accounts in SAP is a group of GL Accounts that controls the name of the
General GL Master, the number of GL Master and some control information. In other
words, the grouping of G/L accounts forms the framework for recording accounting
transactions in a structured way

Fiscal Year

A time period (usually 12 months) for which a company is required to provide its
physical inventory count and balance sheet. The fiscal year can be the same as the
calendar year, though this does not have to be the case.

The fiscal year variant contains the number of posting periods in the fiscal year and the
number of special periods. You can define a maximum of 16 posting periods for each
fiscal year in the Controlling component (CO).
 Financial management area

The FM area is derived from Financial Accounting organizational unit, the Company
Code by assigning the company code relevant for Funds Management in your
organization to an FM area. One or more company codes can be assigned to an FM area

Credit control area

A credit control area is an organizational unit for specifying and controlling customer
credit limits. A credit control area can include one or more company codes. It is not
possible to divide a company code into several credit control areas.

Define Segment

The segment is defined as a subarea of a company with activities that generate expenses
and revenues, with an operating result that is regularly used by management for profit
assessment and resource allocation purposes, and for which separate financial data is
available.

Field Status Variant

Field Status Variant is used to define the fields which are used for input like cost
center, profit center, plant, etc., which are entry fields, and hidden fields. Field status
Variant is a tool which is provided by SAP to assign the same set of properties to more than
one object

General Ledger

General Ledger (G/L) accounts are used to provide a picture of external accounting and
accounts and to record all the business transactions in a SAP system. This software
system is fully integrated with all the other operational areas of a company and ensures that
the accounting data is always complete and accurate.

A general ledger (GL) is a set of numbered accounts a business uses to keep track of
its financial transactions and to prepare financial reports. Each account is a unique
record summarizing a specific type of asset, liability, equity, revenue or expense
Reversal Documents
Reversal documents are created containing all document line items for the original
documents with reversed plus/minus (+/-) signs. The reversal documents were
transferred to Accounting and posted there. This cancels the original, incorrect posting. The
selection of accompanying payroll results was reset.

Recurring Document
Recurring entries are business transactions that are repeated regularly, such as rent or
insurance payments. They are posted by the recurring entries program based on recurring
entry documents. The following data never changes in recurring entries: Posting key.
Account.

Parked document
A parked document in SAP is a document saved but not yet posted to general ledger
accounts. Parked documents can be edited. SAP puts a limit on the fields that can be
edited in a parked document. SAP document parking allows dual control of the document
hence dual principle can be applied

Hold document
Hold documents are Incomplete documents when data require to complete the
transaction is not available like cost center and bank charges and all.The system does not
update any account balances. Temporary document number will be generated when we hold
the document
Account payable
Accounts Payable is a submodule of SAP FI used to manage and record Accounting
data for all the vendors. It handles vendor invoices, approvals, payments and other allied
activities. Any postings made in Accounts Payable is updated in General Ledger as well.

Accounts Receivable

Accounts Receivable is a submodule of SAP FI used to manage and record Accounting

data for all the customers. It handles customer invoices, approvals, payments and other
allied activities. Any postings made in Accounts Receivable is updated in General Ledger
G/L as wel

O to C Cycle Meaning

Order-to-Cash is an integration point between Finance (FI) and Sales (SD). It is also
known as OTC or O2C in short form. It is a business process that involves sales orders from
customers to delivery and invoice. It comprises SO, Delivery, Post Goods Issue (PGI), and
billing to customers

P to P Cycle Meaning

Also known as purchase-to-pay and P2P, procure-to-pay is the process of requisitioning,

purchasing, receiving, paying for, and accounting for goods and services, covering
the entire process from point of order right through to payment

Purchase Requisition

Purchase Requisition (PR) is an internal purchasing document in SAP. It is used to give

notification to responsible department (purchasing/procurement) of requirements of materials
and/or external services.

Purchase order
Formal request or instruction from a purchasing organization to a vendor or a plant to
supply or provide a certain quantity of goods or services at or by a certain point in
time

Goods receipt

A goods receipt in the Warehouse Management system (WMS) is the physical inbound
movement of goods or materials into the warehouse. It is a goods movement that is
used to post goods received from external vendors or from in-plant production. All goods
receipts result in an increase of stock in the warehouse.

Invoice verification

Invoice verification marks the end of procurement, after purchase order and goods receipt.
· Invoice posting updates all the related documents in financials

line item definition

Line items are document items that were posted to a specific account. In contrast to a
document item, a line item only contains the information from the document item that is
relevant from the account view. You can display the following line items: Open items.

Vendor down payment

A down payment is a payment made or received before the physical exchange of goods
and services. Once the receipt or delivery of goods and services occurs, the down payment
clears against the final invoice

Customer down payment

The SAP customer down payment process is required when advances are received from
customers to fulfill sales orders before the actual sale has occurred. These customer
advances are a liability for the organization which will be cleared by future sales

Automatic Payment

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

What is meant by general ledger?

A general ledger (GL) is a set of numbered accounts a business uses to keep
track of its financial transactions and to prepare financial reports

What is leading and non leading ledgers in SAP?

Reporting done by the Company for its Country Fiscal Year comes Leading
ledger. Reporting done to other Countries comes Non-Leading Ledger.
 Suppose your Company is in India and US. In India we submit the Financial
Statements to the Govt by the Fiscal Year of April – March
what is meaning open item management in sap

Open item management ensures that all items that have not yet been cleared are
available in the system. You can only move a document to the cold area of the database
after all the open items have been cleared. You can see whether an item has been cleared
in the line item display or document display.

what is relevent to cash flow in sap

In SAP if we post the doc without selecting the relevant to cash flow option. It will not be
recognized as a payment document and It will be in open item only.! So to have d
difference Between other GL accounts to cash and bank GL accounts. In SAP we have
a option called relevant to cash flow.

leading ledger
The leading ledger is based on the same accounting principle as that of the
consolidated financial statements. If you use the account approach for parallel
accounting, you post all data to the leading ledger. This leading ledger is integrated with all
subsidiary ledgers and is updated in all company codes

Asset Accounting
Asset Accounting in the SAP system is used for managing and monitoring fixed assets.
In Financial Accounting, it serves as a subsidiary ledger to the general ledger, providing
detailed information on transactions involving fixed assets.

It helps in providing detailed information on transactions that involve fixed assets. It is

a kind of subsidiary to the General Ledgers. We call it New Asset Accounting

fixed asset
The fixed assets function provides you with both physical and financial control over the
complete asset life cycle, from acquisition through depreciation, revaluation, and
disposal. Moreover, you can use the various reports in SAP Business One to evaluate and
process the fixed asset-related data

1. assets which are purchased for long-term use and are not likely to be converted quickly
into cash, such as land, buildings, and equipment.

What are tangible assets?

 A tangible asset is an asset that has physical substance. Examples include inventory, a
building, rolling stock, manufacturing equipment or machinery, and office furniture. There are
two types of tangible assets: inventory and fixed assets.

intangible asset

An intangible asset is an asset with no physical form. It's a long-term asset that accrues
value year over year. Examples of intangible assets include intellectual property, brand
recognition and reputation, relationships, and goodwill

Asset retirement

Asset retirement is the removal of an asset or part of an asset from the asset portfolio.
This removal of an asset (or part of an asset) is posted from a bookkeeping perspective as
an asset retirement.

Charts of depreciation
Charts of depreciation are used to manage various legal requirements for the
depreciation and valuation of assets. These charts of depreciation are usually country-
specific and are defined independently of the other organizational units. Example. You can
use one chart of depreciation for all company codes in a country

smooth up and catch up in asset accounting in sap

If the smoothing option is activated, the difference is distributed equally among the remaining
posting periods of the current fiscal year. If this option is not activated, the entire difference is
posted to the current period which is known as catch up.

Loss on asset scarp sale

 An asset is retired from the fixed assets without revenue (for example, by scrapping). Users
post an asset retirement by scrapping.

Various Depreciation Methods

Straight Line Depreciation Method

Straight-line depreciation is the simplest method for calculating depreciation over

time. Under this method, the same amount of depreciation is deducted from the
value of an asset for every year of its useful life.

Diminishing Balance Method

 The diminishing balance method, also known as the reducing balance method, is a
method of calculating depreciation at a certain percentage each year on the
balance of the asset which is brought from the previous year.

 Sum of Years’ Digits Method

 Double Declining Balance Method
 Sinking Fund Method
 Annuity Method
 Insurance Policy Method
 Discounted Cash Flow Method

Recurring entries
Recurring entries are business transactions that are repeated regularly, such as rent or
insurance payments. They are posted by the recurring entries program based on recurring
entry documents. The following data never changes in recurring entries: Posting key.
Account

Dunning
Dunning is the process of sending dunning notices to customers with overdue
payment items, requesting payment of the outstanding amount by a specified date. To
help you track open invoices and monitor the payment behaviour of your customers, SAP
Business One includes the dunning wizard

withholding tax
When a customer that is authorized to deduct withholding tax pays invoices from a vendor
subject to withholding tax, the customer reduces the payment amount by the withholding tax
proportion. The customer then pays the tax withheld directly to the appropriate tax
authorities (see diagram). Withholding Tax.

Goods and Service Tax

GST stands for Goods and Service Tax. It is a single tax for the whole system levied on all
services and goods by the state and central governments. Before GST, the government of
India followed different types of taxes (Excise, VAT, CST, Service tax, etc.) and was levied
multiple times.

1. Integrated Goods and Services Tax (IGST)

2. State Goods and Services Tax (SGST)
3. Central Goods and Services Tax (CGST)
4. Union Territory Goods and Services Tax (UTGST)
 Depreciation
Depreciation calculation in SAP is the periodic and permanent decrease in the value of
the fixed asset over its economic life period because of its usage and associated wear
and tear. There are various methods of depreciation calculation in SAP that we can use.

acquisition
The primary business process in asset accounting is the purchase of assets and/or the
capitalization of in-house produced goods or services. Asset Accounting

Purchase Requisition (PR)

Purchase Requisition (PR) is an internal purchasing document in SAP. It is used to give
notification to responsible department (purchasing/procurement) of requirements of materials
and/or external services

Reconciliation accounts
Reconciliation accounts are the vehicle that links sub ledger accounts, like accounts
payable, accounts receivable, and fixed asset accounts back to the general ledger.
Every sub ledger account has to link back to a reconciliation account.

Cost elements

Cost elements classify an organization's valuated consumption of production factors

within a controlling area . A cost element corresponds to a cost-relevant item in the chart
of accounts

cost center
. Organizational unit within a controlling area that represents a clearly delimited
location where costs occur. You can make organizational divisions on the basis of
functional, settlement-related, activity-related, spatial, and/or responsibility-related
standpoints.

Cost center planning

Cost center planning involves entering plan figures for costs , activities , prices or
statistical key figures for a particular cost center and a particular planning period. You
can then determine the variances from these figures when you come to compare these plan
values with the costs actually incurred.
 Internal orders
Internal orders are cost objects in SAP Controlling. They are temporary cost collectors for
short-term projects or events, and are not as structured or permanent as cost centers. There
is no standard hierarchy for internal orders, however they can be grouped

profit center
A profit center is an organizational unit in accounting that reflects a management-
oriented structure of the organization for the purpose of internal control. You can
analyze operating results for profit centers using either the cost-of-sales or the period
accounting approach

LSMW
The LSMW (Legacy System Migration Workbench) is a tool based on SAP software that
supports single or periodic data transfer from non-SAP to SAP systems (and with
restriction from SAP to SAP system). Its core functions are: Importing legacy data from PC
spread sheet tables or sequential files.

what is test plan in sap

You can create test plans for a subset of your solution documentation in SAP Solution
Manager. A test plan refers to a solution, a branch, and a scope. To create the test plan, you
can select the test cases and executables that you have assigned to the set of solution,
branch, and view on any level. However, test cases and executables are usually assigned to
a process step. Testers perform the test cases by calling the assigned executables and
running the test cases.

Test Case

Test cases, which include the test configurations, are assigned to business
processes in the solution documentation. This is done in the Test Suite - Test
Preparation application where you can do the following:

 Select solutions and branches from the hierarchy and display business
processes, interfaces, and executables.
 Start reports for a selected branch to evaluate technical bills of materials
(TBOMS) and test cases.
 Create test cases.

For more information, see Solution Documentation.

 Test Case Types

You can use the following test case types:

 Test Document and URL: refers to manual tests.

 Test Configuration: refers to automatic tests for all automatic tools that are
registered in your system. (Tools for composite tests and the eCATT test tool
don’t need to be registered explicitly.)

how do you manage tough deadline

1. Communicate a clear deadline.
2. Break down the project.
3. Have a start and completion date for each step.
4. Block off time on your calendar.
5. Focus on action (vs. motion)
6. Communicate progress with your team.
7. Add a buffer time.
8. Don't overcommit.