SAP Financials Integration Techniques

 
This is the third post on the series of posts on “SAP Financials: Integration with Other SAP Modules”. In this post we will discussion the “SAP Financials Integration Techniques”.
 
1.2 SAP Financials Integration Techniques
 
Integration of SAP Financials to other SAP modules, deals with how seamlessly business transactions flow from other SAP modules to SAP FI and vice versa. It deals with the automatic update of transactions to SAP Financials in accordance with the settings maintained in customizing. Several techniques are used to achieve this.
 
1.2.1 Enterprise or Organization structure Technique
 
The enterprise structure is an important point of integration between SAP Modules. It is the foremost point of any integration. Organizational structure assignment to SAP FI structures, like the Company code is the first point of integrating other sap modules to sap financials.
For example, the starting point of integrating SAP MM and S&D to SAP FI is the assignment of Plant, purchasing organization and sales organization respectively to the Company code.
 
1.2.2 SAP Master Data Technique
 
The SAP master data objects are also major points of integration of SAP modules. For example the Vendor and Customer master data, are important account determination points between the accounts payables and receivables modules respectively to the General Ledger. Through the assignment of reconciliation accounts to these master data, we can achieve automatic postings to the GL from these sub modules. Material master for the logistics modules, employee mater record for payroll and travel management module, contract master for SAP Loans Management module and so on, are all very important points of integration between the relevant SAP modules and SAP Financials.
 
1.2.3 The Transaction Key Technique
 
A transaction key is simply a unique three-character key used in account determination techniques in SAP, to represent a business transaction. For example, you have a business transaction, say goods receipt/invoice receipt (GR/IR) clearing for which you want to set up for automatic posting, SAP has a predefined standard transaction key for this (WRX). In your account determination exercise, you assign GL accounts to these transaction keys in configuration.
Other examples of transaction keys are:

i. KDF: Exchange Rate Dif.: Open Items/GL Acct
ii. KDB: Exch. Rate Diff. using Exch. Rate Key
iii. GBB: Offsetting entry for inventory posting
iv. BSD: Inventory posting and so on.
The transaction key method is used in SAP Financials modules, in SAP Material Management and other SAP modules.
The transaction key/GL Account relationship can one-to-one or a one-to-many relationship.
 

1.2.4 Transaction Keys and Account Modifier

An account modifier is nothing but some set of rules based on which GL accounts may be determined for automatic postings.
A transaction key may or may not have account modifiers. If a business transaction key does not have an associated account modifier, the GL account determination is straightforward. In this case, you assign one GL per transaction key.
The process becomes a bit more elaborate with the introduction of account modifiers.
When a transaction key has an associated Account modifier, this allows you to make ‘n” number of account assignments for the same transaction key. Account modifiers introduce extra layers of flexibility in your account determination process.

Figure 1.xx shows an example of an account modifier in “inventory management” process in SAP MM module.
 

 
Each selection of the account modifiers above, for a business transaction, introduces new possibilities into the number of GL accounts that maybe assigned to a transaction key.

Figure 1.xx shows the selection of the four (Debit/Credit Modifier, general Modification, Valuation modification and Valuation class) account modifiers above for business transaction “Offsetting entry for inventory posting” (transaction key “GBB”) and the assignment of GL Accounts (through transaction code OBYC). Alternatively, you can follow the menu path below:
IMG — Materials Management — Valuation and Account Assignment — Account Determination — Account Determination Without Wizard — Configure Automatic Postings
 

 
In the figure above, for each combination of transaction key (GBB), valuation class, general modification (VBR), valuation modification and debit/credit indicator, you can assign a separate GL account.

In the appropriate sections of the book, we will demonstrate in detail, how account determination is done through the transaction key technique, with and without account modifiers.
 
1.2.5 Valuation Modifier Technique
 
A valuation modifier is simply a grouping of your valuation areas, in an account determination process, for assigning a common General Ledger account to them, in the configuration of automatic posting.
A valuation modifier is also referred to as the valuation grouping code. It is a key account determination option especially in the logistics component.
The valuation grouping code is assigned per valuation area, company code and chart of account combination.
You define valuation grouping code in configuration, in the menu path below:
 
IMG — Materials Management — Valuation and Account Assignment — Account Determination — Account Determination Without Wizard — Group Together Valuation Areas
 
The following pre-requisite settings must be performed:
 
a) Defining your valuation Level:
 
You must have defined your valuation level through the menu path below:
 
IMG — Enterprise Structure – Definition — Logistics – General — Define valuation level
 
b) Activating the Valuation Grouping Code:
 
You must have activated the valuation grouping code through the menu path below:
IMG — Materials Management — Valuation and Account Assignment — Account Determination — Account Determination Without Wizard — Define Valuation Control
 
c) Assigning Plant to a Company code:
 
You must have assigned each plant to a company code through the menu path:
IMG — Enterprise Structure – Logistics – General — Assign plant to company code
 

1.2.6 Symbolic Accounts Technique
 
A symbolic accounts technique is an account determination technique where an object (called a symbolic account) is assigned to wage types (expense and balance sheet items) in a two-step account determination process. In the second step of this account determination process, the symbolic accounts are then assigned to real general ledger accounts. This account determination technique is commonly used in SAP HR and SAP Travel management components among others.
Just like the valuation modifier in the logistics modules, the symbolic accounts groups wage types that have the same posting characteristics together for assignment of GL accounts for automatic postings.
A symbolic account has the following characteristics:
 
a) It is represented by a four-character key.
b) You must assign an account type to identify which type of posting it will generate (posting to expense account, balance sheet account and so on).
c) Whether account determination will take place according to employee grouping or not.

 
1.2.7 Condition Technique
 
The condition technique is an account determination technique that (like the account modifier technique) uses combination of account determination objects (field catalogue, condition tables, condition types, access sequence and so on) in the GL account determination process.
 
The condition technique is used in SAP Logistics modules (like the S&D and SAP MM Modules). It introduces additional flexibility in the account determination exercise.
 
A definition of some terms used in this account determination technique may help us understand the concept better:
 
A Field Catalogue contains listings of table fields that may be relevant in the account determination exercise.
 
A condition Table contains a combination of fields (sales organization, distribution channel, Customer group, material group, etc.) that represent an individual condition record. Meaning a combination of fields that defines the key of a condition record. Note that selection of fields of a condition table are from the field catalogue.
In the account determination setting, an account key is assign for every combination of fields that make up a condition table; and then a GL account is assign for every combination of condition table and account key.
 
Access sequence: as the name implies, represents the strategy (search strategy) the system uses in searching for data (condition record) in a particular condition type, to determine the required GL account.
 
In the account determination setting, each condition type (in a pricing procedure, for example) is assign an access sequence.
 
Condition Record: a condition record is a data record that stores a condition (prices, discounts, taxes etc.) or condition supplements in a condition table.
 
A condition type: as the name implies, a condition type is a characteristic of a condition, and it has different functions in the system. When used in pricing, it is used to differentiate different types of charges (for example, gross price, discounts, rebate and so on), and when used in output determination, it is used for different output types.
 
To summarize, the complete combination of objects used in account determination, under the condition technique are as in the figure 1.xx
 

 

1) Application: You select which application area is involved in this account determination. “V” means Sales and Distribution (or it may be Purchasing “M”).
2) Condition Type: KOFI is a standard SAP account determination key.
3) Chart of Account: specify the chart of account of the company code assigned to your sales organization. This is important to the extent that any GL account that you eventually assign in this account determination, belongs to a chart of account.
4) Sales Organization
5) Account assignment group for customer
6) Material Account assignment group
7) Account Key. This is the account key assigned to the condition table.
 
To each combination of the above, we assign a GL account in an account determination process.
 
1.2.8 Account Assignments Technique
 
This integration option makes use of the account assignment objects to integrate SAP modules with sap financials. That is to say, that through a configuration setting we define relevant account assignment objects (Cost center, internal orders, work breakdown structures, assets and so on) that are charged when certain business process (Purchase order, Sales order etc.) is being performed.
 
Account assignment as an integration approach is used in multiple SAP Components to integrate them to SAP Financials. It is used in MM, S&D, SAP Loans Management, and several other modules, as we will see in the next chapters of the book.
 
You may assign one or more account assignment objects to a business transaction item. You define which account assignment object is eligible to be charged through the account assignment category in customizing.
 
Account assignment category determines the nature of the account assignment (WBS, Cost Center etc.), which accounts are to be charged upon the occurrence of a business transaction, and which account assignment data should be provided (example for assets- main asset number and sub asset number).
 
 
 
Please do share your thoughts on this topic. We would love to hear your comments and suggestions.
 
 

2 thoughts on “SAP Financials Integration Techniques

  1. in this article there is a small correction – The inventory posting transaction key should be BSX- it is given as BSD

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