Finance and Purchasing

Finance & Purchasing Overview
1
Finance and Purchasing
Overview
2
Finance &
Purchasing
Overview
Materials Management Module
Getting Help
Finance & Controlling Modules
SAP Overview
Tarrant County Implementation
COURSE OVERVIEW
Accessing Training Materials
3
COURSE OBJECTIVES
The Finance & Purchasing Overview course has two purposes:

Introduce SAP and the finance and purchasing modules
Prepare you for role-specific training courses

Objectives of the course:
Review SAP system and integration
Understand Tarrant County implementation
Become familiar with terms
Provide a high level understanding of:
General Ledger Functionality
Accounts Receivable Functionality
Accounts Payable Functionality
Asset Accounting Functionality
Controlling Functionality
Grants Management Functionality
Funds Management Functionality
Materials Management Functionality
How to get Help
How to access training materials

4
Lesson 1: SAP Overview
SAP stands for Systems,
Applications, and Products

The SAP system is a fully-
integrated system where
activities in one area generate
activities in another area

The system provides online,
real-time information and one
place for input of data

5
Modules in SAP
SAP is made up of various functional
modules
Each module covers a different business
function
Tarrant County is using the following
modules:

CO Controlling
FI Financial Accounting
HR Human Resources/Payroll
MM Materials Management
GM Grants Management
FM Funds Management

TC is also using ESS (Employee Self
Service) for employees to enter time
and maintain personal information.
6

FI Module
Other
Financial
Modules
HR/Materials
Management
Modules
ACCOUNTS
RECEIVABL
E
ACCOUNT
S
PAYABLE
ASSETS
FUNDS
MANAGEMENT
CONTROLLING
GRANTS
MANAGEMENT
How They Work Together
PAYROLL
PURCHASING
INVENTORY
MANAGEMENT
7
Integration in SAP
System Integration

When a transaction is executed in any module,
SAP automatically updates data in all
application modules that are affected

Benefits of Integration
Enables simplified business processes, standard
data definition, and a common business language
Simplified business processes enhance productivity
to allow focus on value-added activities
Data has to be entered only once and all related
information is updated automatically
Integration eliminates need for redundant analysis
and reconciliation

8
Business Flow Integration

Requisitioner
Procurement
Officer
Asset Manager
$$$$$
Budget Officer
GL Accountant
Vendor
Accounts
Payable Officer
Receiver
9
Invoice
Verification AP
Direct Posting
G/L
Customer
Payments AR
Vendor
Payments AP
Depreciation
AA
Goods Receipt
MM
Goods Issue
MM
Charges
MM
Charges
AP
Vendor
Invoices AP
Hitting the G/L
10
Data
SAP contains two types of information
Master Data
A collection of information about an object or person
It is referenced whenever that object or person is used in an
entry field
This data does not normally change
Examples are address and payment information for a vendor or
customer

Transactional Data
Information associated with a specific business activity
You enter this information in SAP
Changes from day to day
Examples are:
Invoices
Purchase requisition

11
Master Data vs. Transactional Data
G/L Accounts
Customer Master Records
Vendor Master Records
Grants Master Records
Asset Masters
Material Master Records

Journal Entries
Invoices
Payment
Requisitions

Master Records

Records that remain
in the system for an
extended period of
time.

Transaction Records
Records a specific
event
12
Examples of Master Data
Tarrant County
Purchase Order
P.O. # 56789
Date: July 2, 2004
Widgets (material #15005),
box of 10
Qty $$
10 bx 10.00
Total 100.00

To: ABC Company,
Vendor #1001
12345 Any street
Any town, USA 54321

Vendor
Master
Data
Material
Master
Data
13
Examples of Transactional Data
Tarrant County
Purchase Order
To: ABC Company,
Vendor #1001
12345 Any street
Any town, USA 54321
P.O. # 56789
Date: July 2, 2004
Widgets (material #15005),
box of 10
Qty $$
10 bx 10.00
Total
100.00
Cost Center 987
Transactional
Data
14
Documents & Document Types
A Document generally consists of a document header and
line items.
Document header contains data that identifies a document
and applies to the entire document.
Date
Document type
Document number
Line items generally include
Amount
Account assignment
Additional details specific to the transaction

Document Types are located on the header portion of
every document

Distinguish between different business transactions
Control document number assignment
Help manage accounting documents
15
Document No: SAxxxxxx
Date: 05/06/2004
Company Code: TC01
Currency: USD
Header
Line Items
The Accounting
Document
Debits = Credits
Illustration
Document
Structure

Revenue A/C
Citibank
DR
DR
CR
CR
Bank 10000
Sale 10000
16
Illustration
Document
Types
A document type is a key that is used
to classify accounting documents
and distinguish between business
transactions to be posted
17
Purchasing Document Types
Master Data
Approval
Purchase
Requisition
RFQ
Purchase
Order
Contract
18
Tarrant County Document Types
Document Type Description
AA Asset posting
AB Accounting document
DA Customer document
DG Customer credit memo
DR Customer invoice
DZ Customer payment
KA Vendor document
KG Vendor credit memo
KR Vendor invoice
KZ Vendor payment
SA G/L account document
SB G/L account posting
WA Goods issue
WE Goods receipt
19
Terms
Standard SAP terms:
Application computer program
Client unit in SAP system where data is input, changed, and managed
Data pieces of information; numbers or text
ERP Enterprise Resource Planning; designed to integrate and run all aspects of an organization
Information data that has been collected
Integrated transactions that are completed in one module or process trigger transactions in
other modules
Menu Path sequence of menu selections that should be followed to get to a function or screen
Module portion of SAP system that carries out a specific business function
Real-time describes how data that has been entered into the system is available immediately
after the transaction has been saved. Everyone has access to the same data.
Session instance of SAP; allows multi-tasking within system
Transaction screen or series of screens to create, display, or change data
Transaction code (t-code) unique identifier for each transaction that allows you to get to a
transaction without going through the menu
User role assigned to each employee; set of activities used by the employee
Variants a saved set of personal selection criteria which can be used for lists and reports

20
Lesson 2: Tarrant County Implementation
Tarrant County is implementing the following modules in SAP:

Human Resources (HR)
Takes care of payroll, time recording, applicant administration, and organization
data. Supports the planning and control of personnel activities.
In use since October 2003

Financial Accounting (FI)
Designed for automated management and reporting of
General Ledger (GL)
Accounts Receivable (AR)
Accounts Payable (AP)
Asset Accounting (AA)
External reporting, such as income statement and balance sheet

Controlling (CO)
Represents cost and revenue flows throughout the organization
Aids in organizational decision making
Supports internal reporting such as cost center reports

21
Tarrant County Implementation (contd)
Tarrant County is implementing the following modules in SAP:

Materials Management (MM)
Supports the complete cycle of material flow, from the requisition to
purchase to the warehousing and distribution

Grants Management (GM)
Manages the application, award, budget tracking, and closing of a
grant

Funds Management (FM)
Supports the management of budgets
Budget can be adapted to changes in conditions by entering releases,
supplements, returns, and transfers
Tracks expenses to budget

Tarrant County is also using Employee Self-Service for employee entry and
management of time, personal data, training & events, appraisals, and
benefits enrollment.

22
Tarrant County Finance & Purchasing Modules

Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Purchasing
Inventory
Materials
Management
(MM)
Controlling
(CO)
Funds
Management
(FM)
Financials
(FI)
Grants
Management
(GM)
23
Organizational Elements
The following organizational elements and codes are used in Tarrant
County:

Company Code TC01
Organization unit where individual financial statements are created
Self-contained Chart of Accounts

Controlling Area TC01
Self-contained organization unit where management of costs and revenues is
performed

Purchasing Organization TC01
Organizational unit that procures materials or services

Chart of Accounts TC01
List of all General Ledger (GL) accounts used

Plants
Organizational unit for Admin and Stockrooms
Tarrant County Admin (all non-stock purchases) TC01
Sheriff (Stockroom) TC04
Justice Center (Stockroom) TCJC
Central Supply (Stockroom) - TCCS

24
Purchasing Organization TC01
Chart of Accounts TC01
Controlling Area TC01
Company Code
TC01
FI/MM
MM
CO
FI
For all (AP, AR, GL, AA) process
settings

For management reporting
module settings

For all Purchasing settings

Basic entity in SAP for a legal
entity

Tarrant County Organization Structure
Plant - TCCS Plant TC04
Plant - TCJC Plant TC01
MM
For all Logistics settings

25
Tarrant County terms:

GASB Governmental Accounting Standards Board
Go-Live date when SAP module is scheduled to run live in production system
Phase I 10/01/03 HR/Payroll
Phase II 07/06/04 Financial/Purchasing
Phase III 04/01/05 Budget Prep
Legacy System existing County system that either interfaces with SAP or
provides data for start up of SAP
Production System live SAP system used for normal operations
SME subject matter expert; County employee who has experience or
expertise in a specific functional area
TITAN Titan Integrated Task Access Network; County implementation of
SAP system

26
Why Change??

Systems with duplicate data
Have to use different systems to
enter and get information
Have to wait for processing to get
data

What Does Business Change Involve?

Changing the way we work
Changing our roles
Changing the tool

27
How Will Change Affect Us?
Major changes such as Tarrant County is implementing will have an initial effect
on peoples performance
Over time, the benefits achieved will far outweigh the initial impacts

Time
Maximum
Benefits
Achieved
Continuous
Improvement
Initial
Change
28
Lesson 3: Finance & Controlling Modules
29
Manages vendor invoices
Manages responsibility accounting
Manages all financial accounts
Manages customer billing
Manages fixed assets and
depreciation
Accounts
Receivable
FI
Controlling
Accounts
Payable
Asset
Accounting
FI
CO
FI
General
Ledger
FI
What is FI and CO?
Financial Accounting (FI) and Controlling (CO) are independent components in the
SAP system. The two components are tightly integrated and the data flow
between them takes place on a regular basis.
30
Internal
External
Journalists
Media
EXTERNAL
AGENCIES
Tarrant County
Management
Insurers
Tax
Authorities
Auditors
Managerial Reports
FI
Financial
Accounting
Tarrant County
Employees
Financial Statements
External
Financial
Analysts
Reporting Overview
CO
Controlling
Internal
31
Master
Records
General
Ledger
Accounts
Payable
Accounts
Receivable
Fixed
Assets
Periodic
Processing
Financial Accounting (FI)

This is the key component structure of financial accounting
The FI module is designed for automated management and
external reporting of general ledger, accounts receivable,
accounts payable, asset accounting, and other sub-ledger
accounts within the chart of accounts
32
Financials (FI)
General Ledger (GL)
Used for external
reporting
Document entry
Account Management
Contains

General Ledger
Accounts
Chart of accounts

Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Financials
(FI)
33
General Ledger (GL)
Roles & Responsibilities
Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Financials
(FI)
Departments

Display general ledger accounts, documents,
and line items

Auditor

Maintain G/L accounts
Approve and post documents

34
Financials (FI)
Processes cash receipt
transactions for either
accounts receivable or
revenue transactions
Invoices or bills customer
for amount due
Contains
Customers
Billing logic
Dunning

Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Financials
(FI)
35
Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Financials
(FI)

Departments

Record cash receipts into Cash Journal
Enter customer invoices / credit memos to create
receivables

Auditor

Check entries and posts cash journals
Perform new customer setup

36
Financials (FI)
Process invoices
Generate warrants/checks
by due date or discount
date
Produce 1099 Reports
Contains
Vendors
Warrants
Checks

Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Financials
(FI)
37
Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Financials
(FI)
Department
Enter Invoice Documents
Park documents when invoice verification fails

Auditor
Maintains Vendor Master
Reviews entered documents (except parked documents) and
releases invoices for payment
Reviews parked documents to resolve problems; may
contact the vendor, requisitioner or buyer.
Issues checks for invoices with a free for payment status
38
Financials (FI)
Provides management of
capitalized or tracked
assets
Generates depreciation
transactions for the
general ledger
Contains
Tag numbers
Asset Classes
Depreciation profiles
Capitalized assets
Tracked assets

Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Financials
(FI)
39
Accounts
Payable
Asset
Accounting
General
Ledger
Accounts
Receivable
Financials
(FI)
Department

Create the asset shell at the requisition stage

Auditor
Maintain asset master records
Issue asset tags for Capital and non-computer
low value assets
Update the records for additional information
such as serial numbers
Update Capital Asset record master data
40
Controlling (CO)

This is the key component structure of Controlling:
The CO module represents the Countys flow of costs and
revenue. It is also a management instrument for
organizational decisions. A key tasks is the analysis of FI
data. Variances can be determined by comparing actual
data with plan data.

Cost Element
Accounting
Cost Center
Accounting
Internal
Orders
41
Controlling (CO)
Used for managerial
reporting or activity
reporting
Used to collect and allocate
costs
Contains
Cost Centers
Projects
Internal Orders

Controlling
(CO)
42
Controlling (CO)
Controlling
(CO)
Department

Display:
CO reports
Cost center/cost center group data
Internal order/internal order group data
Budget information for internal orders

Auditor

Display CO reports
Create, change, and display:
Cost centers/cost center groups
Internal orders/internal order groups
Internal order budget information
43
FI/CO, GM & FM Integration & Terms
FI/CO
Grant
Fund
Cost center,
Functional Area
Cost Elements &
GL Accounts
Fiscal Year
GM
Grant
Fund
Sponsored Program
Sponsored Class
Budget Validity
Period
FM
Grant
Fund
Fund Center, Funded
Program, Functional
Area
Commitment Item
Fiscal Year
44
Plan, budget, identify, obtain,
and record all funding related
to awarded grants
Differentiate between
eligible and ineligible costs
Bill and record sponsor
amounts
Record and report all related
costs, revenues, and required
information
Grants
Management
(GM)
Contains:
Grant lifecycles
Grant details
Grant reports

45
Grants
Management
(GM)
Department

Display
Grants
Grant budgets
Grant reports

County Administrators Office

Display
Grants
Grant budgets
Grant reports
Create grants

Auditor

All above
Maintain grant master data
Manage grant cycles
Monitor grant postings

46
Funds Management (FM)

Funds
Management
(FM)
Maintains budgetary
control for all expense
activity
Contains
Funds
Fund Centers
Commitment Items

$$$$$
Budget Officer
47
Funds Management
Funds
Management
(FM)
Department

Pre-post budget transfers for adjustment
within their own level of departmental control
Post transfers within budget control
categories of commitment items

Budget Office

Pre-post budget transfers between departments
Generate report listing pre-posted transfers
needing Commissioners Court approval
Post transfers after approved by Commissioners
Court
Create supplement, return, and entry budget
documents

Auditor

Create and change funds block
Create and change funds reservation
Create and change funds commitment
48
Lesson 4: Materials Management Module (MM)
49
The MM application component supports the
procurement and inventory functions occurring in day-to-
day business operations such as: materials planning and
control, purchasing, goods receiving, and inventory
management. Invoice verification is an MM function but
is executed by Accounts Payable.

Master
Records
This is the key component structure of Materials
Management:

Purchasing
Inventory
Management
Invoice
Verification
(Done by AP)
50
Purchasing is responsible for:
External procurement of materials and services
Determination of sources of supply (vendors)
Monitoring deliveries from vendors
Inventory Management is responsible for:
Management of stocks
Planning, entry, and documentation of all goods movements

Key Terms
A purchasing organization is an organizational unit that procures
materials or services. It negotiates purchasing conditions for
plants assigned to it.
A plant is an operating unit that makes goods available for
distribution.

51
Purchasing Integration
Purchasing
Materials
Management
(MM)
Controlling
(CO)
Funds
Management
(FM)
Financials
(FI)
Asset
Accounting
General
Ledger
Inventory
Log. Invoice
Verification
Grants
Managemen
(GM)
Grants
Management
(GM)
Accounts
Payable
52
Integration of Inventory
Asset
Accounting
General
Ledger
Materials
Management
(MM)
Controlling
(CO)
Funds
Management
(FM)
Financials
(FI)
Purchasing
Log. Invoice
Verification
Inventory
Grants
Management
(GM)
Accounts
Payable
53
Purchasing
Use to order or contract
for goods or services.
Supports requests for
quotes from vendors for
goods
Processes receipt of goods
Contains
Requisitions
RFQ
Purchase orders
Vendor Performance
Contracts
Vendor

Purchasing
Inventory
Materials
Management
(MM)
54
Purchasing Roles & Responsibilities
Purchasing
Inventory
Materials
Management
(MM)
Departments

Create, change, display purchase requisitions
Material
Service
Asset
Grant
Create asset shell
Approve purchase requisitions
Post goods receipts
Post service entry sheets
View material mater, vendor master, and service
master records

Purchasing Department

Display/report on vendor, material, and service
master records
Create, change, display purchase orders and RFQs
Display/report on quotation and purchase order
price histories
Maintain bids, Info Records, source lists, outline
agreements, and contracts

55
Inventory
Use for supplies inventory
Supports storing and issuing
goods from warehouses
MRP (materials requirement
planning)
Physical inventory processing
Purchasing
Inventory
Materials
Management
(MM)
Contains
Plants
Delivery Addresses

56
Inventory/Audit Contracts Roles & Responsibilities
Purchasing
Inventory
Materials
Management
(MM)
Departments

Display/report on vendor master records, material master
records, material documents, service master records,
purchase orders, and contracts
Process goods movements
Goods receipt
Goods issue
Reversals

Purchasing Department

records, material documents, service master records, purchase
orders, RFQs, and contracts
Create/change contracts
Create/change purchase orders

57
Inventory/Audit Contracts Roles & Responsibilities
Purchasing
Inventory
Materials
Management
(MM)
Warehouse Stock Clerks

records, material documents, service master records,
purchase orders, and contracts
Goods receipt
Goods issue
Reversals
Run various inventory management reports
Perform MRP (materials requirement planning) and post to
funds management
Perform/enter physical inventory counts
Create, change, and display physical inventory documents
Create purchase requisitions for stock replenishment

Auditor

records, material documents, service master records, purchase
orders, and contracts
Create/change contracts
Create/change purchase orders

58
Lesson 5: Getting Help

1
2
3
Review the on-line help in SAP
Ask your peers or super user for
assistance.
Review your training materials
and notes.
59
Tarrant County Help

Problems with running tutorials?
Training Mailbox
titansaptraining@tarrantcounty.com

After utilizing the various methods of help on
the previous page, if you still have questions or
problems
or

If you have problems at any time with accessing
SAP, printing, computer or network problems,
etc.
Contact the Tarrant County IT Help Desk at
817-884-3507

60
Lesson 6: Accessing Training Materials
All TITAN training materials for Finance & Purchasing are stored on the
Tarrant County website
This website is accessed through your Internet Explorer from any computer
that has internet access; you do not have to be on the Tarrant County
network. The URL for direct link to the Training Materials website is:
http://www.tarrantcounty.com/titan/lib/titan/training/index.asp

Set up this website as a favorite in your web browser for quick future access

Enter the URL above in the address
field in your browser
When you reach the website, go to
Favorites>Add to Favorites in the
Browser menu
A pop-up window will be displayed with
a default name for the site. Click OK.
To access this site in the future, just
click on the Favorites item in the browser
menu and highlight the name for the
website. You will go directly to the
website.

61
Accessing Training Materials (contd)

Review the instruction page to understand how to use the website
Click on the Courseware link at the top of the Instruction page
A Listing of Courses will be displayed

Click on the Course Title to see a general description of the
content of the course
or
Click on one of the buttons beside the Course Title to go directly
to either the Overview, Quick Reference Cards, or Tutorials
These training materials will be available for your use and
reference at any time

62
Running Tutorials
An additional learning tool is being provided with the Phase II SAP
implementation -- Tutorials
Tutorials are simulations of the SAP system that take you through a
transaction step-by-step in a mock SAP environment
These can be viewed in two ways:
As a movie that takes you through the transaction in a demonstration, or
As an interactive, hands-on practice session that stops at each step and
directs you to make entries in fields or take actions per instructions
provided by the wizard and in the bubbles

Tutorials are provided with each course in the Finance and Purchasing
training
A list of the tutorials is provided at the end of each course.
Go to the Training Materials website to access and run these tutorials.
Detailed instructions are provided on the website when you click on
the Tutorials button

Happy Tutoring!!
63
Training Sandbox

An SAP environment (Training Sandbox) where you can practice
your skills in a real instance of SAP will be available after mid-
June
The sandbox can be accessed through the standard logon process
discussed in Lesson 2 of the SAP Basic Navigation course

The only differences are:
Highlight the Training environment on
the logon pad
Click logon
Enter 520 in the Client field
Enter the same User Id and Password
you are assigned for Production

Feel free to practice any of the tasks in the basic navigation course
and any of the transactions included in other courses you take.
Use the Quick Reference Cards to walk you through the
transactions.

64
COURSE SUMMARY
Congratulations!!
You have completed the Finance & Purchasing
Overview and have reviewed the following topics:
SAP system and integration
Tarrant County implementation
Terminology
High level functionality:
General Ledger
Accounts Receivable
Accounts Payable
Asset Accounting
Controlling
Grants Management
Funds Management
Materials Management
Getting Help
Accessing training materials
You are now ready to complete your role-specific
training courses

Finance and Purchasing

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