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Tuesday, March 10, 2015

Technical FAQ



a.       What is ERP? - ERP is a concepts for the integrated management of business, for effective use of management resources, to improve the efficiency of an enterprise. Initially, ERP was targeted for manufacturing industry mainly for planning and managing core business like production and financial market. As the growth and merits of ERP package ERP software is designed for basic process of a company from manufacturing to small shops with a target of integrating information across the company.

b.      Different types of ERP? - SAP, Oracle Financials, Micosoft Dynamics etc. Most of the companies implemented or trying to implement SAP because of number of advantages over other ERP packages.

c.       What is SAP? - SAP is the name of the company founded in 1972 under the German name (Systems, Applications, and Products in Data Processing) is the leading ERP (Enterprise Resource Planning) software package.

d.      Explain the concept of “Business Content” in SAP Business Information Warehouse? - Business Content is a pre-configured set of role and task-relevant information models based on consistent Metadata in the SAP Business Information Warehouse. Business Content provides selected roles within a company with the information they need to carry out their tasks. These information models essentially contain roles, workbooks, queries, InfoSources, InfoCubes, key figures, characteristics, update rules and extractors for SAP R/3, mySAP.com Business Applications and other selected applications.

e.      Why do you usually choose to implement SAP? - There are number of technical reasons numbers of companies are planning to implement SAP. It’s highly configurable, highly secure data handling, min data redundancy, max data consistency, you can capitalize on economics of sales like purchasing, tight integration-cross function.

f.        Can BW run without a SAP R/3 implementation? - Certainly. You can run BW without R/3 implementation. You can use pre-defined business content in BW using your non-SAP data. Here you simply need to map the transfer structures associated with BW data sources (InfoCubes, ODS tables) to the inbound data files or use 3rd part tool to connect your flat files and other data sources and load data in BW. Several third party ETL products such as Acta, Infomatica, DataStage and others will have been certified to load data in BW.

g.        What is IDES? – Internal Demonstration and Education System. A sample application provided for faster learning and implementation.

h.      What is WF and its importance? - Business Work Flow: Tool for automatic control and execution of cross-application processes. This involves coordinating the persons involved, the work steps required, the data, which needs to be processed (business objects). The main advantage is reduction in throughput times and the costs involved in managing business processes. Transparency and quality are enhanced by its use.

i.         What is SAP R/3? - A third generation set of highly integrated software modules that performs common business function based on multinational leading practice. Takes care of any enterprise however diverse in operation, spread over the world. In R/3 system all the three servers like presentation, application server and database server are located at different system.

j.        What are presentation, application and database servers in SAP R/3? - The application layer of an R/3 System is made up of the application servers and the message server. Application programs in an R/3 System are run on application servers. The application servers communicate with the presentation components, the database, and also with each other, using the message server. All the data are stored in a centralized server. This server is called database server.

k.       What should be the approach for writing a BDC program? - Convert the legacy system data to a flat file and convert flat file into internal table. Transfer the flat file into sap system called “sap data transfer”. Call transaction(Write the program explicitly) or create sessions (sessions are created and processed ,if success data will transfer).

l.         Explain open SQL vs native SQL? - ABAP Native SQL allows you to include database-specific SQL statements in an ABAP program. Most ABAP programs containing database-specific SQL statements do not run with different databases. If different databases are involved, use Open SQL. To execute ABAP Native SQL in an ABAP program, use the statement EXEC. Open SQL (Subset of standard SQL statements), allows you to access all database tables available in the R/3 System, regardless of the manufacturer. To avoid conflicts between database tables and to keep ABAP programs independent from the database system used, SAP has generated its own set of SQL statements known as Open SQL.

m.    What are datasets? - The sequential files (processed on application server) are called datasets. They are used for file handling in SAP.

n.      What are internal tables check table, value table, and transparent table? - Internal table: It is a standard data type object, which exists only during the runtime of the program. Check table: Check table will be at field level checking. Value table: Value table will be at domain level checking ex: scarr table is check table for carrid. Transparent table: - Exists with the same structure both in dictionary as well as in database exactly with the same data and fields.

o.      What are the major benefits of reporting with BW over R/3? Would it be sufficient just to Web-enable R/3 Reports? - Performance — Heavy reporting along with regular OLTP transactions can produce a lot of load both on the R/3 and the database (cpu, memory, disks, etc). Just take a look at the load put on your system during a month end, quarter end, or year-end — now imagine that occurring even more frequently. Data analysis — BW uses a Data Warehouse and OLAP concepts for storing and analyzing data, where R/3 was designed for transaction processing. With a lot of work you can get the same analysis out of R/3 but most likely would be easier from a BW.

p.      How can an ERP such as SAP help a business owner learn more about how business operates? - In order to use an ERP system, a business person must understand the business processes and how they work together from one functional area to the other. This knowledge gives the student a much deeper understanding of how a business operates. Using SAP as a tool to learn about ERP systems will require that the people understand the business processes and how they integrate.

q.      What is the difference between OLAP and Data Mining? - OLAP - On line Analytical processing is a reporting tool configured to understand your database schema ,composition facts and dimensions . By simple point-n-clicking, a user can run any number of canned or user-designed reports without having to know anything of SQL or the schema. Because of that prior configuration, the OLAP engine “builds” and executes the appropriate SQL. Mining is to build the application to specifically look at detailed analyses, often algorithmic; even more often misappropriate called “reporting.

r.        Define Meta data, Master data and Transaction data - Meta Data: Data that describes the structure of data or MetaObjects is called Metadata. In other words data about data is known as Meta Data. Master Data: Master data is data that remains unchanged over a long period of time. It contains information that is always needed in the same way. Characteristics can bear master data in BW. With master data you are dealing with attributes, texts or hierarchies. Transaction data: Data relating to the day-to-day transactions is the Transaction data.

s.       Name some drawbacks of SAP - Interfaces are huge problem, Determine where master data resides, Expensive, very complex, demands highly trained staff, lengthy implementation time.

t.        What are variables? - Variables are parameters of a query that are set in the parameter query definition and are not filled with values until the queries are inserted into workbooks. There are different types of variables which are used in different application: Characteristics variables, Hierarchies and hierarchy node, Texts, Formulas, Processing types, User entry/Default type, Replacement Path.

u.      What are the different types of source system? - SAP R/3 Source Systems, SAP BW, Flat Files and External Systems.

v.       What is Extractor? - Extractors is a data retrieval mechanisms in the SAP source system. Which can fill the extract structure of a data source with the data from the SAP source system datasets. The extractor may be able to supply data to more fields than exist in the extract structure.

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Monday, March 9, 2015

Accounting documents during SAP Procurement

Please note there is no accounting entries generated during Purchase orders / sales order / production order. Often found that guys make mistake in this part.
In the normal procurement cycle accounting generates at the time Good Receipt from the vendor. One thing you need to understand there are several movement type can be used based on the customer requirement.
Accounting document generated usually at time of 101 movement type. In some cases user can use 103 and 105. In this case 105 generates accounting document.
Accounting journal entries will be similar to below. Here I am considering a case where base price of material is USD 100. However I am not going to handle freight or tax part. Things may get complicated, if go in detail. I will cover those case in forthcoming session.

MIGO journal entry

Inventory USD 100 Db
GR/IR clearing account USD 100 Cr
Do not think that always system pick the value from Purchase order price for the inventory. This will happen only if the goods are moving in Moving average price. If any reason, material’s pricing indicator is set to standard price, system will pick material master standard price and make necessary posting. In most of the cases procurement material’s pricing indicator set as moving average. Rarely some business required to keep the standard price for the raw material. This decision is a very critical decision so ensure that you need standard price only.
Let us assume that standard price of the material set as USD 80/-. Purchase order price is USD.100/-. In such case accounting entries will be as follows:
MIGO journal entry – Standard price

Inventory USD 80 Db
Price difference account USD 20 Db
GR/IR clearing account USD 100 Cr

I believe, I have made it very clear about MIGO part.

MIRO journal entry

Vendor USD 100 Cr
GR / IR Clearing USD 100 Db

Accounting entry will be as above in both the cases. Ie. Materials price is maintained in moving average or standard price.
In any reason, at the time of MIRO if there any change in the vendor invoice then case is difference. Let us assume that vendor has given an invoice of USD 90. But this may not be the standard practice. But one must understand the system behavior or best practice.

MIRO journal entry – Change in invoice value

GR /IR clearing USD 100 Db
Vendor USD 90 Cr
Inventory USD 10 Cr

But above case is applicable only if the material in stock. If material is not in the stock, instead of inventory it will be charged to the consumption.
MIRO journal entry – Change in invoice value- No stock available

GR /IR clearing USD 100 Db
Vendor USD 90 Cr
Consumption / Changes in stock USD 10 Cr

Interestingly above entries will be applicable only if the material is managed in moving average price. In the case of standard price it go as below:

MIRO journal entry – Change in invoice value- No stock available

GR /IR clearing USD 100 Db
Vendor USD 90 Cr
Price difference account USD 10 Cr

I hope, I have made it very clear. Please make some likes, if you have enjoyed the reading..


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