For understanding accounts receivable automation, let’s first understand the sales process.
Activities in sales process:
Sales team connects with customers and negotiates sales terms & price.
Once order is received from customer, material department has to check if inventory exist to meet order. If material is not available, goods are either procured externally by purchase department or produced internally by production department.
(Material department issues material to production department so that finished goods can be produced to meet order).
Logistics department arranges for transportation of finished goods to customer’s delivery address.
Bill is sent to customer. Customer does the payment. Finance department takes care of financial accounting.
In entire process, people from different departments (sales department, material department, production department, logistics department, finance department) need to coordinate with each other to ensure that goods are delivered to customer as per sales order.
Accounts receivable automation in sap
SAP enables tracking of activities and proper coordination between departments
Start of an activity by a department may depend upon completion of some activity by another department. Example, loading of goods on truck can happen only after picking & packing of goods, transportation department can dispatch goods for delivery only when goods are loaded on truck, finance department can recognize sales and record revenue in account books only when bill is issued to customer.
Hence activity performed by various departments need to be tracked properly. For proper coordination between departments, information needs to be shared between departments on time. This will ensure company does not lose time on coordination between various departments. Hence time consumed in completing sales cycle will reduce leading to faster business, better customer satisfaction and more sales.
Sap enables better coordination between departments. SAP SD module is nicely integrated with SAP FI & SAP MM.
SAP enables automation of accounts receivable to reduce manual error:
To keep track of activities performed by various departments, each activity needs to be documented properly. Example: Picking, packing, loading & dispatch of goods need to be documented.
When goods are dispatched for delivery, then material department needs to document decrease in inventory and finance department needs to record cost of goods sold (COGS).
Finance department needs to record sales in account books when customer is billed.
Finance department needs to reduce accounts receivable when customer makes the payment.
Sap reduces probability of manual error (occurring due to manual intervention) by enabling automatic generation of documents.
SAP enables better visibility on inventory, sales order status, account receivables
As soon as goods are dispatched, reduction of inventory is documented. Hence information about inventory is available as and when needed.
Since all activity in sales process is tracked hence better visibility on sales order status.
Sap enables better tracking of account receivable. Reports for pending payment from specific customers can be fetched and this can be used to follow up with customer for payment.
GL ACCOUNTING
- What is SAP FICO ?What business requirement is fulfilled in this module?
- What is enterprise structure in sap fico?
- What is GL account? What is account group? What is operational chart of accounts?
- What is the need of country chart of account or alternate chart of account? How country chart of account helps fulfill a business requirement?
- What is the need for group chart of account? How group chart of account helps in consolidation of financial data?
- What is non leading ledger in sap fico?
- What is company code global settings? What global parameter is assigned to company code?
- What is fiscal year variant? Why fiscal year variant is assigned to company code?
- What is posting period variant? Why posting period variant is assigned to company code?
- What is field status variant? What is field status group?
- What is document type in sap? Explain the purpose of document type?
- Document date vs Posting date vs Entry date vs Translation date. Explain
- What is posting key? what is the use of posting key?
- Document header & line items capture information of business transaction.
- Everything about currency & exchange rate in sap.
- Foreign currency valuation in sap. Explain with example
- Retained earnings account helps in year end balance carry forward. Explain
- What is the significance of tolerance groups in sap?
- What parameters are maintained in GL master and how does it impact in document posting?
ACCOUNTS PAYABLE
- What is meant by accounts payable in sap?
- Understanding procure to pay (PTP) cycle and accounting document at each step.
- Understanding MM FI integration in very simple terms.
- Purchase order price determination in SAP. Explained in very simple words.
- House bank, Bank key, Account ID in SAP
- What configuration (FBZP) needed for executing F110 in sap ?
ACCOUNTS RECEIVABLE
- How sap overcomes challenges in accounts receivable process?
- What is customer reconciliation account?
- Understanding order to cash cycle in sap.
- Understanding SD FI integration in very simple terms.
- What is lock box? How lockbox helps in collection from customers?
TAX ACCOUNTING
- How sap helps in tax accounting?
- Tax configuration in sap: Tax procedure, Tax code & Tax jurisdiction code
- Concept of tax jurisdiction code & tax jurisdiction structure
- Significance of “Tax category & Posting without tax allowed” in GL master.
- Tax base amount and Discount base amount
- Assigning tax code V0 & A0 for non taxable transaction?
- Deductible input tax vs non deductible input tax
WITHHOLDING TAX
- Withholding tax in sap explained with example.
- How sap overcomes challenges in managing withholding tax?
- Withholding at the time of invoice or payment
- Withholding tax configuration in sap
- Business place & Section code in sap
- Withholding tax certificate numbering in sap
- Withholding tax report for filling tax returns
ASSET ACCOUNTING
- How sap helps in asset accounting?
- What is meant by asset accounting?
- What is the use of asset class?
- What is the use of depreciation key in asset accounting?
- Depreciation area and Chart of depreciation in sap.
- Derived depreciation area VS real depreciation area?
- Understanding asset accounting configuration needed in sap
- GL account determination for posting asset transaction
- Asset transaction and corresponding accounting document?
- How depreciation is posted in sap?
SAP CONTROLLING