SAP ERP Top Functionality Strengths

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Top Functionality Strengths

1. General Ledger AccountingDescription

General Ledger provides a comprehensive picture for external accounting and accounts. Records all business transactions (primary postings as well as settlements from internalaccounting) in a software system that is fully integrated with all the other operational areas of a company to ensure that th e accounting data is always complete and accurate.

Competitive Advantages Customer Benefits to Point Out

SAP ERP is a real-time system. With SAP ERP, the postings made in subsystem (e.g., Accounts Payable or Accounts

Receivable) are transferred to the general ledger in real time with no manual actions

that need to be taken. This implies that, at any given time, reports generated on a

department level or in a different geographical location always have the same results as

the data is replicated instantly. With SAP ERP, organizations can have one version of

the truth.

SAP ERP allows ledgers to be managed in parallel currencies . With SAP ERP, companies can store amounts in parallel currencies (e.g., local currency,

group currency and hard currency), so that the GL account transaction figures are also

updated in the parallel currencies and exchange rate differences arise in all parallel

currencies.

SAP ERP has flexible accounting periods (12-16 accounting periods, weekly and

daily accounting).With SAP ERP, accountants are provided with four additional periods for all the year-

end closing adjustments, as well as the ability to close books as often as it is necessary.

SAP ERP organizes accounts into groups that share common characteristics . With SAP ERP, it is possible to control the behavior of an account, e.g., to make some

fields obligatory or optional when postings are made.

SAP ERP supports statistical key figures. With SAP ERP, organizations can record non-monetary data for general ledger accounts

(e.g., the number of employees), which further enhances analysis.

SAP ERP can post documents to multiple companies in different currencies in one

financial transaction.With SAP ERP, companies have a truly multi-company system.


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2.Management Accounting (or Controlling)Description of Topic

Profitability Accounting helps users evaluate market segments, which can be classified according to products, customers, orders, any combination of these, or strategicbusiness units, such as sales organizations or business areas, with respect to the companys profit or contribution margin.

Comptetitive Advantages Customer Benefits to Point Out

SAP ERP allows the creation ofsales or profit plans . With SAP ERP, companies can effectively manage market opportunities due to the

robust planning of individual market segments. With the ability to transfer sales plans to

execution, they can avoid manual and error-prone work.

SAP ERP allows the creation ofprofitability segments that combine the revenues

earned with the cost incurred.

With SAP ERP, it is possible to asses profit margins of economic activities. The typical

questions that can be answered include:

Which products and markets generate the highest contribution margin?

How do individual customers or customer groups affect the results?

To what extent have the sales employees attained the set goals?

SAP ERP provides standard profitability reports , by customer, customer group,product, or product group, as well as numerous templates for the operating concern

(e.g., organizational units).

With SAP ERP, organizations are able to make thoughtful product decisions, without theneed to invest in additional software components or spend considerable amount of

money


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Description of Topic

Profit Center Accounting determines profit for internal areas of responsibility. It calculates profits and losses using either a period accounting or cost-of-sales approach.


SAP ERP natively supports the planning and analysis of the profitability of profitcenters.

With SAP ERP, organizations can reduce the complexity of IT landscapes by avoiding thenecessity to deploy third-party applications to measure the performance, or calculate anoperating result of the profit cener.

SAP ERP allows the valuation of goods movements between profit centers,either at external prices, group-internal prices, or specially-defined transfer prices.

With SAP ERP, managers of individual divisions (or profit centers) can determine profitsand profit margins of their own areas of responsibility and coordinate their activitiesaccordingly.

SAP ERP enables the creation of profit centers according to product, geographicalfactors, and function.

With SAP ERP, organizations can define structures of profit centers and assign objects tothem, such as sales order, manufacturing orders, materials, assets, etc.

SAP ERP supports a separate hierarchy of profit centers . With SAP ERP, companies can create as complex profit center hierarchies withoutaffecting the structure of the General Ledger, which makes the maintenance of bothprofit center-related and GL-related structures much more simple.

SAP ERP can post to cost center and profit center at the same time . With SAP ERP, organizations can achieve usability advantages due to the flexible cost

and profit center accounting, which does not require any manual adjustments in orderto avoid double postings.


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3. Financial Supply Chain ManagementDescription of Topic

Credit Management is a program that provides credit checks, by using information from the payment history and credit risk analysis. It enables a company to manage the creditlimits offered to customers and analyzes credit information, using both external and internal information to accurately adapt customer scoring.


SAP ERP supports automatic credit limit determination for business partners, withSAP ERP's Credit Rules Engine.

With SAP ERP, organizations can make effective credit decisions, which can largelyeliminate underpayments or non-payments from customers.

SAP ERP allows external credit information to be processed and non-financialdata to be captured to better assess credit risks.

With SAP ERP, companies can take numerous aspects into considerations in order tomake thoughtful credit decisions.

Wtih SAP ERP, organizations can monitor the performance of a creditdepartment and individual credit clerks.

With SAP ERP, organizations can establish to what extent the Credit ManagementDepartment was able to prevent non-payment through credit decisions in the past, or towhat extent strategic specifications could be implemented. There are a lot ofpreconfigured reports available out of the box.

SAP ERP provides credit ratings. With SAP ERP, organizations can view customers' credit worthiness in an easy way,which supports optimal credit decisions. The best-paying customers can be more easily

rewarded with better credit limits.

SAP ERP can manage credit limit in multiple currencies . With SAP ERP, international companies are likely to experience a lower r isk exposuredue to robust currency conversion of credit limits assigned to individual business

partners.

SAP ERP allows corporate credit limit to be distributed to individual subsidiaries. With SAP ERP, organizations have a consolidated view of the credit limit granted toindividual business partners on the corporate level, which supports better creditdecisions.

SAP Workflow enables approval procedures to be implemented for SAP Credit

Management.

With SAP ERP, the system can trigger a workflow, when customers exceed their credit

limit or when changes to the credit limit have to be approved by a superior. There is noneed to leverage third-party applications to have workflow capabilities in place, whicheliminates integration and upgrade issues.


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Dispute Management contains functions for processing receivables-related dispute cases. It supplements the logistics process chain (purchase order delivery invoice

payment) in the stage between invoice and payment if there are discrepancies with the customer.


SAP ERP allows creating and monitoring dispute cases connected to receivables. With SAP ERP, organizations can effectively manage disputes with customers (becauseof damaged goods, incorrect bill, discrepancies in payments, etc.) by summarizing allinformation related to the dispute in one central business object dispute case. Withoutan enterprise software solution, organizations must spend a great deal of time

processing disputes manually. Estimates show that the average cost of an invoicedispute can range from $128 to $640 per invoice. With SAP ERP, the days sales

outstanding (DSO) can be reduced by as much as 20%.SAP ERP can manage dispute case-related correspondance . With SAP ERP, organizations can streamline dispute-related communication, largely

avoiding faxes, voice mail and spreadsheets to resolve, track and settle accountsreceivable payments. This is especially critical for companies with complexcommunication structures and siloed functional areas.

SAP ERP supports order to cash with short pay . With SAP ERP, companies can effectively manage complex end-to-end businessprocesses. When an exception (such as short pay) occurs, the system can initiateautomatic steps to resolve the issue. The business process can span multiple systemcomponents, such as accounts receivable, sales and distribution, SAP CRM and SAPWorkflow.


Collections Management enables the tracing and collecting of outstanding receivables. It includes payment reminders, processing of promise-to-pay agreements, collection agentportal, collection strategies, collection controlling, and dunning.


SAP ERP provides numerous collection strategies . With SAP ERP, organizations can easily achieve consitency in collection processes byassigning collection tasks to collection specialists each time according to the same rules.

SAP ERP supports promises to pay. With SAP ERP, companies have a solid knowledge about customers' payment behaviour,if they promised to pay in the past and whether or not the promise has been kept.


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SAP ERP provides one-stop shop experience for all collections related

activities.With SAP ERP, collection clerks get a complete view on customers' payment behaviour,including information on collections, promises, outstanding balances, etc. This improvestheir productivity and the ability to make thoughtful decisions.

4.Project AccountingDescription of Topic

Project Accounting monitors precise planning of the detailed activities involved in both large scale projects, such as building a factory, and small scale projects, such asorganizing a trade fair. Helps the project manager ensure that the project is executed efficiently, on time, and within budget - which he or she achieves by ensuring that therequired resources and funds are available as and when needed.


SAP ERP provides project templates . With SAP ERP, organizations do not need to define all project details each time a projectis created, as far as project structure and billing types are concerned.

SAP ERP provides project simulation capabilities. With SAP ERP, organizations can simulate and save changes to a project, withoutaffecting the operative project.

SAP ERP stores all project-related information in a separate work breakdownstructureoutside of the General Ledger.

With SAP ERP, companies can create as complex project structures as required withoutaffecting the structure of the General Ledger, which makes the maintenance of bothproject-related and GL-related structures much more simple.

SAP ERP provides a graphical representation of a project. With SAP ERP, organizations can improve their productivity by monitoring the progress ofthe project in a Gantt chart view.

SAP ERP provides easy maintenance of projects , with its unique SAP's ProjectBuilder or Project Planning Board.

With SAP ERP, companies can easily plan and control their projects or create, change ordisplay all project structure data in one transaction.

SAP ERP provides robustresource scheduling capabilities . With SAP ERP, organizations are able to achieve optimal commitment of availableresources to projects, which improves project success rates.


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5. Contract AccountingDescription of Topic

Contract Accounting provides subledger accounting for processing large document volumes and fulfills the typical accounts receivable functions. It is an integral component ofthe SAP Financials solution and can be integrated with this and other solutions for additional tasks.


SAP ERP can supportcontract accounts. With SAP ERP, companies can have a consolidated view of all the postings related tobusiness partners in one contract account. They can also define procedures that applywhen posting and processing the line items of a given contract account, such as payment

and dunning. Contract accounting is critical for telecommunications, utilities, andinsurance industries.

6.Production planning


Capacity Planning is a tool for determining available capacity (including facilities, equipment and labor), capacity requirements, and for performing capacity leveling.


SAP ERP allows overloads and underloads to be leveled at work centers usingvarious dispatching operations.

With SAP ERP, organizations can generate a dynamic graphical overview with thepossibility to adjust the assignment of capacity requirements to available work centersusing an easy drag and drop technique.

SAP ERP supports capacity hierarchies. With SAP ERP, companies can map various production areas to their capacity planning

needs.

SAP ERP provides mass processing capabilities in capacity planning. With SAP ERP, organizations can efficiently perform dispatching, deallocating, orchanging operations on a large number of production orders.


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techniques or with the exclusion and inclusion of events they expect to happen in thefuture.


Long-Term Planning provides support for long-term production planning and for carrying out simulations in short and mid-term planning.


SAP ERP supports long-term production planning . With SAP ERP, organizations have comprehensive knowledge on how sales andoperations planning will influence resources in the long run. It is possible for them todecide at an early stage whether extra work centers will be required to cope with

bottlenecks, or whether additional machinery will have to be purchased to reach salestargets.

SAP ERP supports carrying outsimulations in short and mid -term planning. With SAP ERP, organizations can easily experiment with various planning scenarioswithout the need to set up additional database for a new set of planning parameters(different forecast values and capacity constrains).

SAP ERP can create demand programs that are used solely for simulative planning. With SAP ERP, organizations can calculate and compare the effects of various versions ofthe demand program, including capacity requirements, the activity category requirementsof the cost centers and the purchased parts requirements.

7.Quality managementDescription of Topic

Quality Planning enables the management of basic data for quality and inspection planning and planning quality inspections with the help of inspection plans and materialspecifications.


SAP ERP provides catalogs for standardizing and evaluating quality data, inspectioncharacteristics describing inspection criteria, and inspection methods .

With SAP ERP, organizations achieve numerous benefits connected with robust qualitymanagement like customer satisfaction and higher retention rates through better productquality, as well as greater efficiency resulting from reduced product returns and improved


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SAP ERP provides test equipment management . With SAP ERP, organizations can track test equipment, ensure its guaranteed quality andtest reliability, and forecast possible weak points in technical installations, which improvesthe safety of the production process.


Quality Notifications provides the notification and analysis of nonconformities, defects, and failures that are related to products, processes, or services.


SAP ERP supports stability studies . With SAP ERP, companies can test how individual products will keep their quality overpredefined periods of time under controlled environmental conditions. This is especially

critical for all kinds of shelf-life tests.

SAP ERP can record quality-related complains over the Internet . With SAP ERP, organizations' customers can submit quality-related complains in a self-service mode, which in turn improves productivity of the employees handling customercomplains. Online and real-time notifications can shorten the processing time andpositively impact the customer overall satisfaction.

8.Management of Internal ControlsDescription of Topic

Management of Internal Controls supports management in assessing and reporting the effectiveness of a company's internal control system, as required by the Sarbanes-OxleyAct (particularly section 302 and 404) and other similar regulations.


SAP ERP enables organizational hierarchies, an account group hierarchy, a centralprocess catalog, and a management control catalog to be centrally defined.

With SAP ERP, organizations can achieve an effective and transparent management ofinternal controls.

SAP ERP provides predefined and customizable management reports , rangingfrom a high-level overview to detailed analyses of the internal controls' status.

With SAP ERP, companies benefit from out-of-the box reports that can assess theeffectiveness of disclosure controls and procedures, and monitor the control


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effectiveness.

SAP ERP provides robustscoping capabilities . With SAP ERP, organizations can efficiently determine all the relevant risks that need to

be covered in order to comply with legal requirements.SAP ERP supports automated control monitoring . With SAP ERP, organizations can automatically detect exceptions as well as create a

remediation case or global control risk dashboard alert and as a result reduce audit costsby reducing testing sample size.

SAP ERP provides tools to assess control and process design and efficiency . With SAP ERP, companies have a robust and efficient control management system attheir disposal and can avoid the deployment of third-party applications with all theintegration issues that may arise.

SAP ERP delivers a library of configurable, automated key controls to monitor

multiple target systems.

With SAP ERP, organizations can reduce the complexity of the IT landscape by deploying

one configurable system to manage internal controls on the corporate level.

SAP ERP provides scheduling capabilities . With SAP ERP, companies do not need to manually monitor when various controlassessments need to take place, which can significantly improve internal controlmanagement processes.

9. Segregation of DutiesDescription of Topic

Segregation of Duties are a primary internal control intended to prevent or decrease the risk of errors or irregularities, identify problems, and e nsure corrective action is taken.


SAP ERP supports access risk analysis and remediation . With SAP ERP, organizations can define and monitor Segregation of Duties (SoD)conflicts, proactively address SoD conflicts, and define and audit mitigating controls.

SAP ERP provides compliant user provisioning . With SAP ERP, companies can automate the user provisioning process, nor can theymanage various types of business risks, or reduce the workload for IT staff.

SAP ERP does not supportprivileged-user access management . With SAP ERP, organizations' employees are able to perform emergency activities beyond


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the limits of their normal roles, but within a controlled, fully audited environment.

10. PayrollDescription of Topic

Payroll handles all payroll processes, supports current legal regulations and collective agreement specifications and ensures compliance with regulatory changes.


SAP payroll solution supports current legal regulations in 47 countries out of thebox.

SAP ERP is suitable for global companies that would like to leverage one payroll solutionacross the globe, and effectively address such topics such as national currency, multiplelanguages, collective agreements, and reporting.

SAP ERP can supportretroactive calculations . With SAP ERP, organizations can avoid a lot of manual and error-prone work when thereis a change in past earnings and payroll results need to be retroactively recalculated toreflect correct tax and earnings amounts.

Documents

SAP ERP Top Functionality Strengths