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Organizational Structure and Master Data

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In this section, going to start by explaining a little about your organizational structure and both finance purchasing and the key organization or objects before going on to the different types of master data, relevant to accounts payable in particular, the supplier master data. During this video, I'll be using the terms, vendor and supplier interchangeably. SAP seems to be moving towards the terms Pyre, but vendor is still found in a number of places. I would explain how to create the master data directly in the system. Using fury apps for cases where you're responsible for maintaining the data directly. Well, there organizations with central master data maintenance, they have slightly different procedures. Here's a quick look at the agenda to see the sort of master data we'll be covering. We'll start with organization objects, such as the company code plants and purchasing organizations. And I will explain why they're all needed. And we'll look at the finance master data that's used when posting an invoice. Before we can create suppliers, usually need to create bank master records, and I'll explain my shortly I'll cover the difference between business partners and suppliers and the key fields involved in setting up a supplier. And then I'll do a short demo and we'll see a couple of unusual bits of functionality and look at some of the key reports related to supply master data. At the end, as usual, I have a few tips and tricks. One of the most important objects in finance is the company code. Normally you would have one company code for each legal entity, but sometimes organizations may split legal entities further and consolidate them afterwards for legal reporting. When you receive a supplier invoice, for example, it can only be legally addressed to and posted into one company code. Even if you later split it out or recharge the cost to other company codes in the same group, you may also have different purchasing organizations in one company code. For example, perhaps your stock purchasing is done by one part of the purchasing department. A non-stock handled quite differently, but another with different purchasing terms and conditions. Whereas the company code is based on legal reporting for finance purposes. The purchasing organization groups together, the procurement requirements, for example, in order to get the best terms and conditions I'm purchasing organization, they include all or part of several company codes. A purchasing group is just a group of individual purchases. Primarily the location is handled by the term plant in span. Last one plant typically equates to one factory warehouse or delivery site. You can also set up plants to regional offices or branches or any other location. The plant can be shared across many areas in Esther HANA. For example, it can be used by purchasing sales production and so on. There are two types of data transactional and master data. Transaction data tends to be one of posting. So this specific date we values, for example, posting a goods, receipt, invoice, journal entry, or payments most today choose creative ones, but can be used by many transactions. It can change, but usually does not change on a regular basis. When you enter a transaction, you do not need to reenter certain data each time. For example, when entering the supplier invoice, you only need to enter the code for the supply master record. You do not need to be into the supplier master data for each transaction. Oh, so you only need to enter the number of the GL account master record. You do not need to tell the system each time, what type of GL account it is or any other details. Many organizations have a policy that most of all purchases are made for a purchase order. In which case the purchase order will already contain some master data and dive a parcel map, the relevant ones to finance automatically. However, where a purchase order is not raised and the invoice is posted directly. The person posting the invoice will have to fill in the codes for the finance master data manually. This is usually the general ledger account cost center. And if necessary and internal order or WPSL entering the supplier account, we'll also link all the payment and address information to this invoice when recording a supplier invoice. The purchase needs to be recorded in finance in several different ways. There's a minimum. You need to know the what, in other words, the type of cost, which is generally represented in finance by the general ledger account, you need to know the who, in other words, which department is responsible, which is represented by the cost center. Sometimes there are other requirements. For example, you may want to know which employee was traveling for travel expenses. As well as which department, or you may want to know which event cost refers to, or which specific marketing campaign, if the costs are fairly simple, an organization may set up an internal order to capture the costs either in parallel with the cost center or prior to settling them to a cost center. And if they're more complicated, the project might be set up, which can be split up further into work breakdown structures. Usually abbreviated to WPS elements, which can be set up in a hierarchical structure. These objects are usually known as cost assignment objects, and at least one is required for primary and secondary costs, but not necessarily for non-operating costs. Although those are not usually posted by an invoice anyway. And then master data objects, such as profit centers and segments, but these are generally derived automatically from other objects create, I think the material or product master record to enter in the purchase order means that you do not have to manually enter the description, finance details, valuation type. And a lot of other details each time also the same material code can be used for a number of different areas, purchasing sales, inventory, manufacturing, et cetera. Although we'll cover the purchase order in the next section. I'll just say a few words in the next slide about how the materials used in the purchase order. A supplier or vendor is a personal company that the organization buys goods or services from. As previously mentioned, if you create a supplier master record and you don't need to enter the supplier details every time you enter a supplier invoice or credit note, you just enter the supplier account number or code. Similarly, each time you create supply master record, you don't have to enter the bank details. Just the code for the bank, master echoed and the bank account. Number of the supplier. If an item goes into stock for production or resale, the code that's used in the system in order to record and track the item through production and to calculate the cost of sales. And so on, it's called the material master or product code SAP still uses both terms, product, and material. So you may see them being used interchangeably in the tutorial. Typically the name will be more precise than the product a, B and C shown in the slide. And we'll help you match the invoice with the purchase soldier and goods, receipt line items, material masters for stock items will contain all the relevant dates for posting such as a profit center links to the GL account and so on which it's massively transferred to counting when you post the invoice. All stock invoices, miss go straight to logistics, influence verification process. In other words, for the purchase order and goods receipt, in order to update the inventory and be available in other logistics transactions, such as goods, receipts, and goods issues to production or sales. Material codes are not mandatory in the purchase order for non stock items. You can just use the text description instead is shown in the table, but they can also be created for anything that's purchased regularly. Even if not held in stock, you can also have service material codes. But you wouldn't typically both have individual material codes. For example, for general purchases like stationary, which vary a lot, even for non-stock items to GL account and cost objects can be either entered or derived on the purchase order. And also transferred to the invoice. In addition, many organizations use purchasing phone records and contracts to set up prices and other information for combinations of suppliers and stock materials. If an invoice price doesn't match the purchase order and the mistakes not been made by the supplier. It may be necessary to go back and review and update the material and info records to prevent the error recurring. The slide shows the overview screen of an example, list of supplier banks using the managed banks app F I'm five seven. For each time you create a new supplier. You need to tell the system certain information in order to pay them such as which bank, which account number, unless of course you pay by check, but the amount is collected by direct debit. Rather than entering the whole bank information. Every time you create a supplier in S for HANA, you set up each bank once and then just refer to it by a bank here in the supply master records, it uses it. When you maintain the supply bank account, there are several ways that you can do this. If the bank does not already exist. When you create the supplier, you can set up the bank, master data in a separate transaction. Before you create the supply master record, or you can create the bank from inside the supply master record transaction. Alternatively, you can subscribe to a service, the updates or the bank records for country automatically, regardless of whether you actually use them. The bank key is the unique code that identifies a specific bank because most organizations have to make some foreign payments. You would almost certainly have to set up some foreign banks as well as local. You can see some examples in the slide in the UK. For example, the bank is known as the bank SOC code, and it's always six numerical characters. Although other countries have different formats is standard. The system should work. Then you entering anything different to the correct bank key format for each country. Although you can change the rules in the configuration. If a format change occurs, although many countries have a fixed format, some countries don't have any rules and organizations may choose to use the Swift code or BIC is the bank key, but they could use any unique identifier. The Swift BIC BIC code consists of a four letter bank code, often a shortened version of the bank pain followed by two digit country code. And two digits for the head office location and an optional three for the branch to create a new bank using the fury app, F1 five, seven, four, there's a create bank button at the bottom of the screen. Although the buttons should be harmonized between different apps. They still occasionally appear in different places depending on the app and version. Normally, they should pay her above the content of the table. I just below the filters. So if you don't see it at the bottom, check above the table area and also check for plus sign. If you don't see it create that mandatory fields have a red asterisk, but I'm also going to fill in the Swift BIC code and the city you could fill in the full address as well. But usually the city or branch is sufficient. There are other fields that can be used if the bank happens to be your own house bank, I, the bank that your organization uses for trading, but that's rarely necessary for supply purposes. I can search for the bank by entering the city or anything else in the filter path. We can see that there are two banks in Chicago. In this system. I decided to enter something in the branch field in case somebody searches on that instead of the city. I click on the blue part of the bank name and then select the button at the bottom to make the change and safe. If I wanted to change the layout of the table, I can use the settings button to add fields such as created pie. I can also move the columns around by dragging and dropping them or using the arrows in the setting button. I can change the filter bar by going into your deck filters button. And then more filters and selecting the additional for you. Now you can see the creative buy button in the filter. The filter settings functionality is similar in most apps, and now I'll expand on it a bit more in each app. We look at. The term business partner encompasses a number of different relationships in terms of both the type of entity, um, role business partner can be a person such as an employee or contract, and it can also be an organizational group. A business partner may be somebody that you buy from as well as somebody that you sell to some of the data. For example, the name and address will apply everywhere. Some information may only be required for specific areas of the business, such as finance or purchasing. And for example, different company codes and purchasing organizations, they have different terms and conditions for the same business partner in SAP S four HANA rather than entering global data multiple times. For example, by creating separate master data for suppliers and for customers or for each company code or purchasing organization, you create one global or general business partner role with additional roles as required Rose the things like finance or company code data, purchasing sales, credit management, collections management, plant bank data, and so on. In this site pay ERP. The business partner functionality is only mandatory if you're using, for example, FSM credit management, and there were other options to maintain customers and vendors such as the transactions, X, K Sara, and one and techs K zero two to create an amend vendors. In as Spanda the business partner functionality is the only option for customer and vendor master data maintenance, but it still links to the old customer and vendor master data tables, and they're related numbers, which are used in many transactions. If you have maybe with the transactions in SAP ERP. You could say that the generic zero zero zero zero zero BP. Well, approximately equates to the general data section in the slide and typically the FL V N zero zero fender FII role equates to the company code data section and the FLV and zero one vendor, and then equates to the purchasing organization data section. Although the term vendors used here and the term suppliers used with business partners, they both refer to the same concept generally of a person or organization that you're buying something from how this is organized in practice varies. An organization may have one department responsible for all business partners or have accounts payable, responsible for suppliers and accounts receivable for customers. Well, somebody creates the business partner centrally, and the accounts payable and receivable departments can extend the routes. If you have master data governments or MDG implemented, there may be different steps or forms to fill in. Some organizations may have workflows to ensure approvals and compliance in this tutorial, covering the basic creation of the master data. Now we come to the different approaches to numbering. Numbering can be internal. In other words, sequentially assigned by the system or external. In other words, the number is assigned manually or from an external system. An important point is that the business partner number does not have to be the same as the customer or vendor number. There's technically they're different objects in SAP, S four HANA. If in your legacy system, let's say all the supplier numbers begin with one and the customer numbers begin with two, whether you keep the same numbering approach in S fan or not, you also have to decide on a numbering approach for the related business partner. You could change over the numbers of everything begins with the same number. In other words, having one number range for both customers and suppliers, you could use a separate number range beginning with three for the business partner, master data maintenance and keep the supply numbers beginning with one and the customer with two that could be confusing for the purposes of master data maintenance. The business partner number will be the main number, but when running, for example, transactional reports, the supplier and customer numbers would be the main number. You can also have the customer business partners. The same. I supply related business partner begin with one and the customer and the related business partner became with too. With a link where an organization is both the supplier and customer. In this case, you'd have additional maintenance. I've used the Catholic GUI transaction BP in the side because it's easier to see the business partner, supplier and customer numbers all in one place. If he wants to fix on post it up the customer man, when paying the supplier, there's also a field select for that. And the company code role. If the turbo linked. Well, you could have various combinations. For example, having one business partner number range for all into company, regardless of where the customer or supplier, but separate number ranges for everything else. Some of this will be taken care of automatically by the configuration. And some relationships will need to be created in the business partner maintenance, which we'll see shortly. Assuming you've used separate reconciliation accounts. You can anyway report different types of suppliers separately, but you could also set different number ranges for different types of employee. For example, domestic foreign intercompany and employee vendors. If you were simply creating a vendor directly in the system, there are several apps that you can use. I will mainly be using the supply master app shown on the left as only the supplier options are shown as the default and not for example, customer credit management. Currently the name in the fury app library is slightly different to the name in the 1,909 sandbox that I'm using. And you may find the layout is slightly different if you're using earlier versions. However, the fields should be more, same. Yeah, come the right in the side is similar, but instead of just allowing access to the supply roles also allows you to create customers. And for example, contacts and credit management roles as well, then navigate the manage supplier or customer master data apps to enter a specific master date detail against the role. I'm now going to go through the details, some of the key fields that need to be completed for a standard supplier. And then after that, I'll put it all together. In a quick demo, you can change which fields are mandatory, which fields are optional, and which fields are hidden in the configuration. Although certain fields will always be mandatory. For example, the country language, name, or description. The first screen of the supply master is the overview screen. You can use the filters to select the relevant existing suppliers, and you can use the settings button to add additional columns, do more sorting, filtering, and grouping or export to Excel. To create a new supplier. You can either copy an existing supplier by selecting that supplier and pressing copy, or you can create a new supplier from scratch by clicking on the create path, which gives you the option of creating a person or an organization. Now, this is one area where fury is better as you cannot easily copy a business partner in the gooey. If you choose copy, you can choose to copy with the pre-selection. In which case you can choose which company code or purchasing organization you wish to copy. If there are more than one system will then copy any data that can be identical. To create a new supplier. The first thing to select is whether it's a person or an organization in this case, I've selected an organization, but the pop-up for person would be similar. The next few to choose is the grouping. This dictates what the number range would be. I've chosen the intern or sequential numbering, so that the system of assign the number automatically. But your organization may have different rules, especially if external systems are involved or they may use external numbering printer company. If using, for example, an alphanumeric code, there's a minimum, you will need the name of your organization, address and language. If you intend to post invoices to the supplier, you will need to company code to me, conciliation account. And if you want to raise purchase orders, you need a purchasing organization in order to currency, as well as the related roles, you can only choose one role in this screen, but in the demo, you'll be able to see how to select the second row. One time vendor functionality is also mentioned in section four, some organizations prefer to create an account for each supplier. And in any case, currently, some of the new apps in SAP S four HANA do not support this functionality. So I've shown an example of the gooey transaction, FP 60 in the side, so that you can see an example of the pop-up to enter the address and bank details. If you're already using this functionality in previous versions of SAP and want to continue or have a few suppliers, you're only going to use once for something small. You can still create a generic account using the one-time vendor account grouping and account group. This allows you to leave the address and bank details blank in the master data, and instead enter them when posting them voice the next screen and asked you tend to move data. That's a clickable globally. And to expand on the address information, if required. Search terms, a good idea. Although search functionality in a fury is quite powerful for any way you would normally use either a key word or you could use one of the search terms for the legacy supply number. No, to sit in the sandbox, I've used my initials so that I can quickly find all my supplies in one go. Although usually the created by field could be used for that. If you stayed.The authorization group can be used to restrict access to certain uses for that business partner. The alternative payee is generally used when payments made to different organizations. For example, a financing company in this case, it's a global level, but you can have an alternative pay company code level instead. You can either scroll down or use the tabs to jump directly to different areas. In the industry section, you can set up different industries in the configuration if required for reporting. And in the supplier information section, there is additional information you can enter such as the link to the customer account. The supplier number on the side is blank because in this setup, it's the same as the business number, which is not yet in the signed is I've not saved the supply yet. And the account group usually defaults in the supplier authorization group is freely definable in customizing and allows you to extend the authorization for specific objects. Payment blocks are available. If you want to mend or check something or get an approval before the supplier is used, the international location number is used mainly in Germany. If I scroll down to the roles, you can see that in addition to the global role that we're in is only one additional role created, which is the company code or finance role. But here you can click on create to choose the purchasing role or even amend the validity period. There are sections further down the screen to enter more company code or purchasing organization specific data, which we'll look at shortly below that I can fill in more address information. If I didn't already do that in the first pop-up screen, the standard communication sections fairly self-explanatory. If most communications, for example, purchase orders are sent out in the language where the company code is bad. In this case, English, you would normally put that language regardless of where the supplier is based. If you have a lot of suppliers who use a different language and you've created forms in those languages, you can enter the other languages here instead. You can choose validity periods for addresses rather than just overwriting the existing one. If the supplier changes, addresses. And if you click on the arrow and go into the additional address details screen, you can also assign an address type. For example, home address, business address, holiday home, et cetera. This is sometimes tricky. If the supplier supplies to several company codes in different countries, particularly where the currency is different is often the bank accounts are different and the bank account information. Is it global level, not accompany code level. If the supplier only has one bank account. The system ID type usually defaults to treble zero one. So you just need to enter the country of the bank, not the supplier bank key and account number. If the bank has already been created, you can just select it from the dropdown list. If it does not exist, you need to enter the country and then choose the blue arrow on the right of the line to go to the details, to enter the bank name in Europe in particular. You will also need the IBN number. The next section is the identification to select a new identification, choose, create, and then select the drop down in this slide. You can see the various options that you can use for identification, and you can use more than one if necessary by creating additional ones from the main screen. Once you've selected an ID type, the system automatically goes back to the main screen for you to enter an identification number, responsible institution and validity period where relevant the tax number, category ID similar, although usually a VAT number. It is specific to each country, but may also be an income tax number, national insurance number. Provincial or state tax numbers and IP siren side, RET, et cetera, depending on the country. And again, you can have, wow. In the purchasing organization section, I can add additional purchasing organizations by clicking on the create button. And I can click on the arrow on the right to get to more detail. The company code section is similar. I can extend the supplier into more company codes or use the right arrow to go into more detail of the company code fields in the documentation. SAP refers to some of these sections as facets. You can also use the copy at facet function for areas such as company codes or purchasing organizations, as well as address and bank details. To copy a company code. For example, if I want to create a new company code as a copy of in side, I select that company and then click copy. The additional details will open up for me to sign a new company code and check the copy details. And if necessary, amend or fill any fields that need correcting in this screen, we can see the additional details for the purchasing organization. Most of which should be fairly self-explanatory or are more relevant purchasing finance. The two most important fields from a finance point of view are probably if you were to currency, which ID should be the same as seamless currency and the payment terms, you'll notice that the payment terms field appears in two places in the company code details and the purchasing organization details and can be different in both places. As well, it's different for different company codes and purchasing organizations depending what's been agreed. The payment terms in the purchasing organization, section refer only to logistics, invoices. In other words, invoices that posted against a purchase order and the company code payment terms are only relevant for invoices that are posted as a finance document. In other words, without a purchase order.Terms could be set up in several different ways and need to be created in configuration before they can be used both the buying organization and the selling organization will try to standardize the payment terms with the one, paying everybody as late as possible and the other receiving payment as soon as possible. So they have to come to a compromise and the terms are usually agreed in writing beforehand. Usually organizations create yeah. Payment terms for the most popular number of days, such as 1530, 45, 60 and 90. If an organization tends to make payments on a certain day, EG middle of the month payment terms can be created to reflect this example. 15 days after the end of the month, an organization may have payment terms with the cash. Go early payment discount to encourage its customers, to pay sooner. For example, allowing the customer to deduct 2%, if he pays within 10 days, but not allowing any deductions, if he waits for 60 days, payment terms are used by the payment program to identify what date to pay the supplier. This screen shows the first part of the additional detail for the company code. The correspondence section is for any communication with the supplier, the counter, the supplier is the number that the supplier gives your organization is sometimes useful information. If you need to bring up the supplier with the query about invoice or credit, however, you can also use these fields in a standard form or letters you send to this one. Flier counting cards tend to be used more with accounts receivable. If you only have a smaller accounts payable department and the supplier accounts are shared amongst everyone, you may not need to use the accounting clerks functionality, having a larger department where users are allocated specific accounts to take care of and accounting cart can be created for each user and assigned to the suppliers. They're responsible for accounting. Clark is used in a lot of reports and some transactions as well. Well, are there other ways to create events or supper? I'm going to do a quick demo, creating a supplier from scratch, using the supply master F1.