10/12/2011 FIN 01 Overview of SAP FI Master Data - Mississippi ...

MAGIC PROJECT
WORKSHOP AGENDA
FIN_01
OVERVIEW OF SAP FI MASTER DATA
PROJECT IDENTIFICATION
Project Name
MAGIC
CPI/Project Number
Project Type
(CBI, Implementation, CSS, Upgrade, Internal, other)
Implementation
Customer Name Customer Number Planned Start/Finish
State of Mississippi 600260
SAP Customer Partner Project Sponsor Program Manager
SAP Project Director Customer Project Director Partner Project Manager
Bill Bevil
Becky Thompson
WORKSHOP DESCRIPTION
Workshop Name
Overview of SAP FI Master Data
Workshop Purpose / Focus
Understand the purpose of the different SAP Financials modules (including Finance General Ledger, Funds
Management, Controlling/Project Systems and Grants Management modules) used in the public sector and their tight
integration.
The session will also review and agree on high-level Organizational data fields which are to be used, and introduce
some of the master data that facilitates the integration across modules and the way it is organized in hierarchies
within the module. The lower level master data will be covered in detail during the following Blueprint Workshops –
FIN_02, FIN_03, FIN_04 and FIN_05.
Date Time Location
10/12/2011 8:30 – 4:00 1420 Conference Room

WORKSHOP PARTICIPANTS
Facilitators
Mike Palvisak, John Cunningham, Simon Cherny,
Janice Begin
Scribe
Tessa Turner
Invitees
▪ Diane Langham
▪ Valerie Hill
▪ Sheila Kearney
▪ Donna McFarland
▪ Melissa Womack
▪ Robbie Coleman
▪ Frances Davis
▪ Nancy Jennings
▪ Sue Jones
▪ Bob Lowery
▪ Kay Martin
▪ Michael Martin
▪ Jessica Morris
▪ Dorothy Preston
▪ Carol Wilson
▪ Jim Hurst
▪ Margaret Jordan
▪ David Johnson
▪ Richard Ferrell
▪ Helen Barnes
▪ Debra Dixon
▪ Allison Brown
▪ Marcia Duncan (Dye Consulting)
▪ Teresa Hayes
▪ Joshua Tillman
▪ Janice Begin
▪ John Cunningham
▪ Jon Sanford
▪ Leisa Wood
▪ Wayne Liu
▪ Jack Ladhur
▪ Rene Montes
▪ Dan Harringer
▪ Bob Fritz
▪ Jeanna Stafford
▪ Shauna White
▪ Deb Biggers
▪ Priscilla Ware
▪ Sandra Lohrisch
▪ Leslie Smith
▪ Milo Crabtree
▪ Debbie Saxon
▪ Cheryl Lunsford
▪ Thomas Bounds
▪ Bill Dykes
▪ Ben Cohen
2

WORKSHOP AGENDA
Time (min) Agenda Item Presenter/Facilitator
OVERVIEW OF SAP FINANCIALS MODULES
20 Explain the purpose of each module and it’s basis of accounting
Financial Accounting (General Ledger, Accounts Payable,
Accounts Receivable, Bank Accounting, Fixed Asset Accounting)
Controlling – Cost Accounting and Project Accounting
Funds Management – budget execution
Grants Management – grant accounting
10 The SAP financial “document” principle and related FI Document
Types
Mike, Janice, John
Mike
5 Special ledger for Cash tracking Simon
10 SAP best practice for master data
Each data element serves a separate and unique purpose –
Fund, GL account
HIGH LEVEL ORGANIZATIONAL STRUCTURES
30 Proposed high-level organizational structures to be agreed on
during the workshop
Company Code and EINs
FM Area
CO Area
Business Areas
10
BREAK
Mike
Simon
INTRODUCTION TO LOWER LEVEL MASTER DATA
15 Introduction to integration and derivations All
15 Financials (General Ledger) Mike
5 Controlling and Projects Janice
15 Funds Management John
15 Grants Management John
3

ACTION ITEMS
From previous workshops
Action Item Assigned to… Due Date
None
PRELIMINARY PROCESS INFORMATION
None
WORKSHOP DOCUMENTATION
Item
Description
None
ATTACHMENTS
Item
Description
None
4

Workshop Presentation –FIN_01
SAP Master Data Overview
October 12, 2011
Department of Finance and Administration
Office of the Mississippi Management and Reporting System
10/14/2011 1

1. Workshop Ground Rules
2. Workshop Guiding Principles
3. Workshop Objectives
4. Workshop Agenda in Detail
5. Workshop Roles
6. Workshop Content
7. Workshop Wrap-up
AGENDA
10/14/2011 2

Workshop Ground Rules
• All participants should be familiar with the requirements and the
topics to be covered;
• The workshop scribe is responsible for documenting the parking lot
issues and follow up questions;
• The workshop facilitators are responsible for keeping the discussion
centered on the topic being discussed. If an issue is determined
that cannot be resolved during the workshop, the facilitator will
note the issue for future resolution and enter it into the workshop
output document; and
• Parking of discussion item if the required knowledge is not in the
room.
10/14/2011 3

Workshop Guiding Principles
Workshop
– Demonstrate how requirements are met
using Standard SAP functionality
– Utilize standard SAP functionality (80/20
rule)
Participant
– Be attentive and open minded
– Explore questions and answers
– Encourage input from other participants
– Avoid the “what won’t work” mindset
Essential to dos:
• Review Business Process Model
• Update/Create process Flow
Diagrams
• WS Output Documents
• Identify RICEFW Objects
• Document process
changes/implications
• Solution Manager:
•Create Business Blueprint
documents
• Identify Issues and Risks
– Refrain from absolutes and mandates
– Focus on current issue being discussed
– Avoid “war stories”
– Manage cell phone, pagers &
interruptions
– Keep the conversations to one at a time
10/14/2011 4

Workshop Objectives
• Understand the purpose of different SAP financial modules and
how they integrate
• Review and agree on high level Organizational data elements
• Introduce master data elements for each module. (These
elements will be discussed in detail in later workshops: Fin_03,
FIN_04, FIN_5, and FIN_06).
10/14/2011 5

Workshop Agenda Part 1
Team
Date
Topics
Deliverables
Financials FI-GM
October 12, 2011
1. Overview of SAP Financial Modules
1.1 Financial Accounting
1.2 Controlling
1.3 Funds Management
1.4 Grants Management
1.5 Document Principle
1.6 Separate Ledger for Cash Basis Accounting
1.7 SAP Best Practice for Master Data
• Section 1: None. (Preparation for decisions in section 2.)
10/14/2011 6

Workshop Agenda Part 2
Team
Date
Topics
Financials FI-GM
October 12, 2011
2. Proposed High Level Organizational Structures to
be Agreed Upon During Workshop
2.1 Company Code
2.2 Business Area
2.3 Controlling Area
2.4 Funds Management Area
Deliverables
• Section 2: Decisions for Financial High Level Organizational Structures
10/14/2011 7

Workshop Agenda Part 3
Team
Date
Topics
Financials FI-GM
October 12, 2011
3. Introduction to Lower Level Master Data
3.1 Introduction to Integration and Derivations
3.2 Financial Accounting
3.3 Controlling
3.4 Funds Management
3.5 Grants Management
4. Wrap-up (parking lot, decisions, action items)
Deliverables
• Section 3: None. Detailed discussions and decisions in future workshops.
10/14/2011 8

Blueprint Workshop - Roles
SAP Facilitator
Customer Facilitator
Janice Begin, Simon Cherny, John
Cunningham, Mike Palvisak
Teresa Hayes
Scribe
OCM
Tessa Turner
Joshua Tillman
A successful workshop is the result of interaction and participation!
10/14/2011 9

1. Overview of SAP Financial Modules
10/14/2011 10

1.1 Financial Accounting
• Purpose – Financial Accounting
• Org Unit(s)
• Company Code
• Business Area
• Master Data
• GL Account
• (Fund)
• (Functional Area)
• (Grant)
10/14/2011 11

1.2 Controlling
• Purpose – Cost Controlling (Reallocations)
• Org Unit(s) – Controlling Area
• Master Data
• Cost Element
• (Fund)
• Cost Center
• Internal Order / WBS Element
• (Functional Area)
• (Grant)
10/14/2011 12

1.3 Funds Management
10/14/2011 13

1.3 Funds Management
• Purpose – Budgetary Control
• Org Unit(s) – FM Area
• Master Data
• Commitment Item
• Fund
• Fund Center
• Funded Program
• Functional Area
• (Grant)
10/14/2011 14

1.4 Grants Management
• Purpose – Grant Budgeting and
Accounting
• Org Unit(s) – (Company Code)
• Master Data
• Sponsored Class
• (Fund)
• Sponsored Program
• Grant
10/14/2011 15

1.5 Document Principle
10/14/2011 16

1.5 Document Principle
FI
CO
FM
GM
10/14/2011 17

1.6 Separate Ledger for Cash Basis Accounting
Cash Basis Accounting (CBA)
• CBA uses a “Cash“ ledger updated in parallel to GL
• Expenditures are posted when paid (invoice is cleared)
• Expenses, Inventory Restocking, Fixed Assets (direct)
• Revenues are posted when deposited (invoice is cleared)
• R/E is offset to a Cash account – e.g. Warrants Out Clearing
• All lines to balance sheet “cash“ accounts are posted
• Cash totals by Fund, Business Area (BA represents
the Agency) , and Grant if required
• Cash Control – check cash balance per Fund + BA
10/14/2011 18

1.7 SAP Best Practice for Master Data
• Principle: Each data element should represent a single
“type“ or dimension of data
• Example: Do not combine organizational data and
programmatic data into the same field, such as org.
unit
• Instead, use separate data elements to represent
organization and program. (Both fields might still be
included a posting transaction.)
10/14/2011 19

2. Proposed High Level Org. Structures
10/14/2011 20

2.1 Company Code
• Company Code = Highest organizational Structure for
financial accounting and control purposes.
• Highest organizational level for legal (external)
reporting
• All structures within a Company Code have same:
• Chart of Accounts
• Fiscal Year
• Employer ID Number
10/14/2011 21

2.1 Company Code (continued)
10/14/2011 22

2.2 Business Area
• Business Area = Used to represent agencies, lines of
business, or locations for which full financial
statements are required.
• Commonly used for major organizational divisions
• Proposed for representing SoMS Agencies
• Opportunity to move to consistent SoMS-wide
Agency numbering
10/14/2011 23

2.3 Controlling Area
• Controlling Area = Highest organizational structure for
cost controlling.
• Defines organizational span for cost reallocations.
• Propose 1 Controlling Area for SoMS
10/14/2011 24

2.4 Funds Managment Area
• FM Area = Highest organizational structure for
budgeting
• Defines organizational span for budgeting control
• All US public sector customers have 1 FM Area
• Propose 1 FM Area for SoMS
10/14/2011 25

Workshop Content
BREAK FOR 10 MINUTES
10/14/2011 26

3. Introduction to Lower Level Master Data
10/14/2011 27

3.1 Introduction to Integration and Derivation
Integration Example:
10/14/2011 28

3.1 Intro. to Integration and Derivation (cont.)
Derivation Example:
10/14/2011 29

3.1 Financial Accounting
• GL Account – Asset, liability, fund balance, expense, or
revenue category in FI. Either mapped from another
module, e.g. payroll or purchasing categories, or
entered directly.
• Fund – Represents source for funding. Derived where
possible.
• FM Budget Period – used with fund
• Functional Area - Represents internal missions or
functions for GASB 34/35. Usually derived.
• Grant - Represents grantor‘s award. (Discuss in GM)
10/14/2011 30

3.2 Controlling
• Cost Element - Expense / revenue category in CO.
Usually derived from GL account.
• Fund - Derived from CC/IO/WBS where possible.
• Cost Center – Lower level organization structure.
Numbered hierarchically.
• Internal Order / WBS Element - Non-organizational
cost bucket.
• Functional Area - Represents internal mission or
functions. Usually derived from CC/IO/WBS.
• Grant - Represents grantor‘s award. (Discuss in GM)
10/14/2011 31

3.2.1 Cost Center Assignments
10/14/2011 32

3.2.2 Project/WBS Assignments
10/14/2011 33

3.3 Funds Management Master Data
• Commitment Item – Expense / revenue category in
FM. Usually derived from GL account.
• Fund – Represents source for funding.
• Fund Center – Organization structure. Usually derived
from cost center, and numbered hierarchically.
• Funded Program – Non-organizational cost bucket.
Usually derived from internal order or WBS.
• Functional Area - Represents internal missions or
functions for GASB 34/35. Usually derived.
• Grant - Represents grantor‘s award.
10/14/2011 34

3.4 Grants Management Master Data
• Sponsored Class
• Expense and revenue categories required by
grantor(s)
• Derived from GL account (usually rolled-up)
• Fund = SoMS fund.
• Funds per grant: 1 grantor, multiple SoMS
• Sponsored Program – Program dimension from
sponsor. Or if not, use for internal SoMS sub-division of
grant. Always derived.
10/14/2011 35

3.4 Grants Management Master Data (cont.)
• Grant – Represents grantor‘s award to grantee.
• Different grant types for grantor award to SoMS
(“grant“) or SoMS award to sub-grantee (“subgrant“)
• All accounting combinations (spon class / fund/
spon program) of sub-grant mapped to grant(s)
• Often derived from internal orders / WBS (n:1
grant)
• Many attribute fields for status, posting control,
indirect cost, billing, and reporting (see FIN_05)
10/14/2011 36

4.0 Wrap-up
Let’s verify that we are on the same page…
‣Clarify any Strange Jargon
‣Validate Parking Lot Items
‣Record Key Decisions
10/14/2011 37

Plus/Delta
+’s
What worked well today
∆’s
What can we improve for future meetings and project activities
10/14/2011 38

Questions
10/14/2011 39

Thank you!
10/14/2011 40

MAGIC Project
WORKSHOP MINUTES/ OUTPUT DOCUMENT
PROJECT IDENTIFICATION
Project Name
MAGIC
CPI/Project Number
Project Type
(CBI, Implementation, CSS, Upgrade, Internal, other)
Implementation
Customer Name Customer Number Planned Start/Finish
State of Mississippi 600260
SAP Customer Partner Project Sponsor Program Manager
SAP Project Director Customer Project Director Partner Project Manager
Bill Bevil
Becky Thompson
GENERAL INFORMATION
Workshop Title
Workshop Facilitators
Process Owner
Scribe
FIN_01, SAP Master Data Overview
Janice Begin, Simon Cherny, John Cunningham, Mike Palvisak
Diane Langham
Tessa Turner
ATTENDEES
Name (including Role/Organization) Email Phone
Michael Martin
Nancy Jennings
Simon Cherny
Tamara Hillary
Frances Davis
Jessica Morris
Kay Martin
Susan Dodder
Bob Lowery
JohnCunningham
Tressa Hayes
Sarah Prewitt
Cindy Ogletree
Greg Ramsey

ATTENDEES
Name (including Role/Organization) Email Phone
Loretta Sebren
Melissa Womack
Diane Langham
Betty L. Smith
Donna McFarland
Dianne Sturgis
Darryl Bowen
Jennifer Little
Robert Johnson
Stephen Smith
Rene Montes
Nekeida McSwain
Shauna White
Princess Bender
Joshua Tillman
Gerry Joyner
Carlos Galloway
Lainette Johnson
Sandra Peaches
Kathy Piazza
Lisa Dunn
Janice Begin
Sue Jones
Valerie Hill
Mike Palvisah
Tessa Turner
Jim Hurst
Jeff Sanders
2

SUMMARY OF THE MEETING
REFERENCE
1. Overview of SAP Accounting Modules
1.1 Financial Accounting (FI) is for “external“, legal accounting.
Company code is the legal entity, smallest unit for a complete self-contained set of accounts.
Example: The State of Mississippi
Business Area is used to sub-divide the company code and still produce full financial statements.
Typical uses of business area are agencies or regions/locations.
Detail in FI provided by GL accounts (similar to object codes) for balance sheet and operating
statement.
1.2 Controlling (CO) internal accounting
All the Lego blocks that snap together to form the big structure, like different kind of cost collectors
Cost Center static/ long term organizational unit that represents some sort of location, either physical
or an area of responsibility. Ex. Cost center that represents a location, could be a small homeland
security office in the state, and all the people who work within it belong to that cost center. All the
people in health group belong to XXXX cost center
Work Breakdown Structure (WBS)- a complex hierarchal structure, you can charge labor and
expenses to it, or any type of cost. It is a project.
Internal Order- a mini project, a small chunk of work that we want to track separately that we want to
monitor the expenses and time for (ex. Training program you want to see how much expense is being
charged to it)
Cost Element- GL accounts for expense and revenue are synonymous with Cost Elements; there is a
difference in the finance area hence the additional name. Example: GL account Physician Services-
61640; when we look in the cost center we would see the cost element of 61640, it flows
automatically into the cost element
(Top Level) Controlling Area holds together all of the cost elements
1.3 Funds Management is the main budgetary ledger in SAP- This is the Budget Control System
(Top Level) FM Area
Fund - source of funding
Fund center- used for organizational dimension, i.e. what’s a division, a hospital
Functional area – used for activity or mission dimension, e.g. for GASB 34/35 functions.
Funded program- cost or revenue collector that is not the organizational dimension
1.4 Grants Management
Reflects your grantors rules; grantors view of everything- there is no “grant area” since every grant is
different
Sponsored class – represents expenses and revenues by grantor’s categories
Sponsored program- represent what your sponsor thinks the program is
Grant - captures all the terms and conditions and what you need to do to fulfill them
1.5 A business event with a financial implication creates a posting, which is tracked by a document
number. Linked documents are posted automatically in each of the modules/ledgers described above.
1.6 Separate ledger for cash basis accounting. Main FI ledger is accrual based. Use a separate, parallel
ledger to track cash flow. There will be the clearing of accruals when money comes in.
3

1.7 Each data element represent a separate dimension of data. Goal is to create these in SAP without
combining them. Each of these data elements should be independent
2. High Level Organization
2.1 Company Code= highest organization structure for financial accounting and control purposes, e.g.
State of Mississippi
Chart of Accounts- your balance sheet and revenue objects (just the GL account itself)
Why one company code Eliminates redundancy
2.2 Business Area = used to represent agencies, lines of business, or locations for which full financial
statements are required. Commonly used for major organization divisions, e.g. SoMS Agencies.
2.3 Controlling area= highest organization structure for cost controlling; defines organizational span for
cost reallocations. Recommend one controlling area for MS is to have one controlling area.
2.4 Funds Management Area= Highest organizational structure for budgeting; span of control for
budgeting. Bottom line- there is one of these- this is the entire organization. All US publis sector
customers of SAP have 1 funds management area. SAP team recommends 1 funds management area
for SoMS.
3. Introduction to Lower Level Master Data in each Module
3.1 Derivation: Will we have to enter in all these fields manually No, SAP derives most of these
automatically and populates codes based on a series of rules built into SAP. One of the requirements for
Mississippi is to default as much as possible.
3.1 (note - duplicate numbering in slides) Financial accounting
GL account- asset, liability, fund balance, expense, or revenue category in FI. Mapping will be a
critical part in the implementation
FM Budget Period- used with fund, comes into play during the “lapse period” of July and August
3.2 Controlling
Project master data is typically maintained at the agency level. The required fields can be agency
specific.
3.3 Funds Management Master Data
Commitment Item - expense/ revenue category, typically derived 1:1 from expense and revenue GL
accounts
Fund- Represents funding source. Funds can be numbered to facilitate roll-up for reporting and
budget control. Can also have attributes for consolidated reporting, e.g. CAFR. Raised question
about difference between fund as used in SAP and current use of fund by SoMS. (Will be discussed
in detail in workshop FIN_04.)
Fund center- organizational structure, usually derived from cost center, and number hierarchically.
3.4 Grants Management Master Data
Sponsored class- expense and revenue categories required by grantor(s). Derived from GL
accounts.
Fund – same funding dimension used by other modules
Sponsored Program- Occasionally a grantor wants you to report on a program that means something
to them, this is the oddball dimension and we can break it up using this tool. It is very flexible, and not
intuitive
4

Grant- represents the grantor’s award to grantee. Includes financial transactions for grant (budget,
enccumbrances, revenues, expenses, balance sheet)
Further Discussion to Decide on High Level Organization
Company Code
SAP requires at least 1 company code
Even the most complicated public sector businesses like UNICEF, which are managed in over 100
currencies, use one company code.
Other states using SAP (AR, LA, SC) have 1 company code
Reasons might have separate company codes (these don’t apply to SoMS):
o Different Chart of Accounts
o Different Fiscal Years
o Different Currencies for Legal Reporting
o Different Employer ID numbers. Diane Langham dicussed goal to move to single EIN for
o
SoMS.
Completely different organizations sharing 1 SAP system, i.e. to share costs, e.g. three
counties sharing 1 software license / 1 system.
SAP best practice for public sector customers is 1 company code, and that’s what consultants
recommend
Controlling Area and FM Area – Discussion similar to company code. 1 required by SAP. SAP best
practice only 1 of each.
Business area
Can be used to sub-divide transactions within a company code, with full financials including balance
sheet.
Discussion of relationship between business area and funds. Both provide full financials, so can
structure funds in various ways. Could support multiple agencies (as business areas) sharing
common fund, or could have separte funds per business area, or both cases (e.g. government funds
shared and proprietary funds per agency).
Recommend SoMS agencies be represented as business areas in SAP
DECISIONS ANSWERED
1. SoMS will have 1 company code, 1 controlling area, and 1 funds
management area
2. Business areas will be used to represent SoMS agencies.
REFERENCE DOCUMENTS
FOR DETAILS REFER TO THE FOLLOWING
KEY DECISION DOCUMENT
ID ACTION/PARKING LOT ITEM OWNER DUE DATE
FIN_01_1 Action: Explain how fund is defined in SAP. Fund in SAP seems
different than current concept of fund at SoMS. (Will be
discussed in workshop FIN_04.)
Mike
Palvisak,
John
Cunningham
10/20
5

FIN_01_2
FIN_01_3
Action: Department of Mental Health to provide business
examples of performing cash check on expenditures at lower
levels of accounting structure.
Action: Provide any accounting dimensions that require full
balance sheet (other than fund). Send email to Diane and Teresa.
Leslie Smith 10/17
All agency
attendees
10/17
6