CHAPTER 5

Report
CHAPTER 5
ERP MODULES
Alexis Leon
ERP MODULES

Finance

Manufacturing and Production Planning

Sales and Distribution

Plant Maintenance

Quality Management

Materials Management
Financial Module


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
Financial Accounting (General Ledger, Accounts Receivable,
Accounts Payable, Fixed Assets)
Investement Management (Investment
Planning/Budgeting/Controlling, Depreciation
Forecast/Simulation/Calculation)
Controlling (Overhead Cost Controlling, Activity Based
Costing, Product Cost Accounting, Profitability Analysis)
Treasury (Cash Management, Treasury Management, Market
Risk Management, Funds Management)
Enterprise Controlling (Executive Information System,
Business Planning and Budgeting, Profit Center Accounting)
FINANCIAL ACCOUNTING → General Ledger

General Ledger
General Ledger produces the enterprise’s financial statements including the Balance Sheet, which shows the
enterprise’s assets, liabilities and equity at a point in time, the Income Statement, which shows the
enterprise’s income, expenses and net profit over a period of time, the Cash Flow Statement which shows
sources and applications of cash, and associated financial reports such as the Trial Balance. The rest of the
reports are there to track the numbers on the financial statements back to individual transactions. Most
businesses prepare monthly statements. Every ERP package has a General Ledger module.
General Ledger is unusual in that it receives transactions from many other modules. There are two ways to
accomplish this: Detail and Summarized. In the detail method, every invoice, check, or other such
transaction creates a separate General Ledger transaction. The advantage of this is that the General Ledger
is continuously updated in real time so the entire set of ERP tables is in sync. The disadvantage is that there
are large numbers of transactions. In the summarized method, transactions are accumulated for some period
(typically a day) and posted in summary. Instead of many small transactions, there is a few big ones. The
advantage is that there are far fewer transactions. The disadvantage is that the General Ledger is out of sync
with the rest of the ERP until the data is posted.
General Ledger has the following functions:
 Maintain Chart of Accounts
 Maintain Budgets
 Maintain Recurring Transactions
 Print Financial Statements
 Print Trial Balance
 Allocate Transactions
 Consolidate Transactions
 Periodic Processing
 Maintain Module Information
FINANCIAL ACCOUNTING → General Ledger
FINANCIAL ACCOUNTING → Accounts Payable
Every enterprise purchases goods, services, assets, or office supplies from its suppliers (also known as
vendors). Accounts Payable pays these suppliers on time (taking advantage of payment discounts if
possible) while avoiding duplicate payments and bank over-drafts. Accounts Payable is the last step
in the supply chain where Purchasing is the first. Accounts Payable accepts invoices, selects
invoices to be paid, generates checks and forecasts future cash requirements based on due dates.
Some AP checks are issued to people or organizations that are not worth putting on file since they
are likely to receive only one check. Some enterprises prepay part of the invoice amount because the
supplier requires a deposit. Every ERP has an Accounts Payable module.

Transactions
The first transaction records a supplier invoice. This can be verified against the related purchase order if
there is one and the receiving report that lists what goods were actually received. Not every
enterprise uses the last two options.
The second transaction pays supplier invoice(s). Each check can pay one or more supplier invoices.
Invoices must be approved for payment before they can be paid.
The vast majority of the module's transactions consist of the above two. The third fundamental transaction
is that of adjustment when things go wrong.
FINANCIAL ACCOUNTING → Accounts
Receivable
Every business sells products and/or services to its customers. Order Entry creates invoices
when a customer orders something and Accounts Receivable keeps track of what
payments have been made to which invoices. Commonly, it also prepares a report
("Aged Analysis") which shows how long each invoice has been outstanding. Every
ERP has an Accounts Receivable module.

Collection
If Accounts Receivable invoices become overdue, Collection initiates processes to collect the money. Usually this means a
telephone call followed by a series of dunning letters of increasing severity. If these efforts fail, Legal may
become involved or the invoice may be written off, or sold to a collection agency for a fraction of its face value.
As part of CRM, details of each contact with the customer including date, employee, contact person, and activity
are stored in Customer.

Transactions
The first transaction records an invoice. This is done by Order Entry/Invoicing rather than Accounts Receivable.
The second transaction records a customer payment. One customer payment can pay one or more invoices. Payment can
be in cash, by debit card, credit card, or check. Somethimes payments are received without information about
what invoices are being paid.
The vast majority of the module's transactions consist of the above two. The third fundamental transaction is that of
adjustment when things go wrong.
FINANCIAL ACCOUNTING → Asset Accounting


A "fixed asset" is something the enterprise has purchased that has a
useful life of more than one year. Fixed Assets keeps track of all these
objects and allocates part of their purchase price to each year of their life.
There are a variety of ways in which this allocation can be done. For
some assets, the allocation or "depreciation" is specified by law. Not all
ERP packages have a Fixed Assets module.
Fixed Assets has the following functions:
* Maintain Asset Information
* Enter Transactions
* Generate Depreciation
* Maintain Module Information
FINANCIAL MODULE-INVESTMENT MANAGEMENT
(Investment Planning/Budgeting/Controlling,
Depreciation Forecast/Simulation/Calculation)


Every enterprise has a reserve of funds. As the enterprise grows larger,
the total reserve becomes larger and larger. Eventually, it is large enough
that it is prudent for the enterprise to invest part of it to gain a higher rate
of return than would be possible in a checking account. These
investments include GICs, mutual funds, stocks, bonds, and other
investment options. Investment Manager keeps track of these
investments. Only large ERP packages have an Investment Manager
module.
Investment Manager has the following functions:
* Maintain Investment Information
* Enter Transactions
* Print Investment Summary
* Maintain Module Information
FINANCIAL MODULE - CONTROLLING
(Overhead Cost Controlling, Activity Based Costing)

Controlling
The controlling system gathers the functions
required for effective internal cost
accounting. lt offers a versatile information
system, with standard reports and analysis
paths for the most common questions. In
addition, there are features for creating
custom reports to supplement standard
reports.

Overhead Cost Controlling
FINANCIAL MODULE - CONTROLLING
(Overhead Cost Controlling, Activity Based Costing,

Overhead Orders
Overhead orders subsystem collects and analyses
costs, based on individual internal measures. This
system can monitor and automatically check
budgets assigned to each measure.

Activity-Based Costing
The goals of the entire organization, should come
before the goals of individual departments, when
it comes to business process reengineering. The
Activity-Based Costing module, is a response to
FINANCIAL MODULE
Treasury (Cash Management, Treasury Management)

Cash Management
To anlyse financial transactions for a give period. It
also records future developments for purposes of
financial budgeting.

Treasury Management
It offers functions for managing financial deals and
positions, from trading to transferring data to
Financial Accounting.
FINANCIAL MODULE
Treasury (Market Risk Management, Funds Management)

Market Risk Management
It acts as an integrated central risk control station with
monitoring and management functions.s

Funds Management
It supports Funds Management Process from
budgeting all the way through to payments,
including monitoring expenditures, activities,
resources and revenues.
FINANCIAL MODULE
Enterprise Controlling
(Executive Informaiton Systems, Business Planning and
Budgeting, and Profit Center Accounting)

Executive Information Systems
It integrates data from Financial Components, other ERP Components, and
non-ERP data sources both inside and outside the enterprise.

Business Planning and Budgeting
It supports Business Units and Groups in the calculation of business targets,
such as return on investment. It also supports central investment
planning, budget release and tracking.

Profit Center Accounting
All business transactions in Financial Accounting, Material Management,
Asset Management, and Sales / Distribution, which affect profits, are
automatically reflected in Profit Center Accounting
SALES AND DISTRBUTION
SALES AND DISTRBUTION
MAIN MODULES
1. Master Data Management
2. Order Management
3. Warehouse Management
4. Shipping
5. Billing
6. Pricing
7. Sales Support
8. Transportation
SALES AND DISTRBUTION –
Master Data Management
Master Data
1. Trading Community Architecture
Customer, Supplier, Employee
2. Products
3. Salespersons
4. Sales Territory
SALES AND DISTRBUTION – Order
Management – Sales Order Management
SALES AND DISTRBUTION – Order
Management – Purchase Order Management
SALES AND DISTRBUTION –
Warehouse Management
1. Inventory Planning
2. Inventory Handling
3. Inventory Location, Assignment
4. Inventory Reporting
5. Inventory Analysis
6. Lot Control
7. Distribution Data Collection
SALES AND DISTRBUTION –
Shipping
SALES AND DISTRBUTION – Billing
1. Invoice
2. Debit and Credit Memo
3. Proforma Invoices
4. Rebates
SALES AND DISTRBUTION –
Pricing
1. Price Quotations
2. Discounts (Quantity, Payment Terms etc.)
SALES AND DISTRBUTION –
Sales & Support
1. Price Quotations
2. Discounts (Quantity, Payment Terms etc.)
SALES AND DISTRBUTION –
Transportation
1. Inward & Outward Movement of Goods
2. Transportation Planning and Processing
MANUFACTURING
MANUFACTURING
Material and Capacity Planning
1. Material
2. Labor Resources
3. Plant & Machinery
MANUFACTURING
Shop Floor Control
1. Shop Orders
2. Work Orders
3. Backward and Forward Scheduling
MANUFACTURING
Quality Management
1. Shop Orders
2. Work Orders
3. Backward and Forward Scheduling
MANUFACTURING
Cost Management
1. Costing Methods
a) Weighted Average
b) Standard
c) LIFO
d) FIFO
2. Product Cost
MANUFACTURING
Serialization/Lot Control
1. Lot Control / Batches
2. Serialization / LPN (License Plate Number)
HUMAN RESOURCES
1. Personnel Management (HR Master Data, Personnel
Administration, Recruitment, Travel Management, Benefits
administration, Salary administration)
2. Organizational Management (Organizational Structure,
Staffing Schedules, Job Descriptions, Planning Scenarios,
Personnel Cost Planning)
3. Payroll Accounting (Gross / net Accounting, History
Function, Multi-Currency Capability, International Solutions)
4. Time Management (Shift Planning, Work Schedules, Time
Recording, Absence Determination)
5. Personnel Development (Career and Succession Planning,
Profile Comparisons, Qualifications Assessments,
Additional Training Determination, Training and Event
Management)
HUMAN RESOURCES
Personnel Management
Personnel Administration
* Shared Employee Information
HR Master Data: Core HR Data
a) Job
b) Position
c) Grade
d) Employee Master Information
Recruitment
* Automated Hiring Process (Manage Open Positions, Applicant Screening,
Selection, Hiring, Correspondence, Reporting, and Cost Analysis)
* eHiring
Travel Management: Travel Approval to Travel Expense Report
Benefits administration: Define Benefits, Enroll Employees, Cost/Benefit
Simulations
Salary administration: Salary Review Process, Manpower Costing
HUMAN RESOURCES
Organizational Management
* Graphical Organization Charts
* Staffing Schedules by headcount,
percentage, and working hours
* Work Center Descriptions
* Job Tasks and Description
HUMAN RESOURCES
Payroll Accounting
* Centralized / Decentralized Payroll
* Apply Business Rules
* Country Specific Payroll (Language,
Currency, and Regulatory Requirements)
HUMAN RESOURCES
Time Management
* Attendance System
* Leave System
* Overtime/Late Sitting System
* Shift Planning (Manage Staff Shortage and
Excess)
HUMAN RESOURCES
Personnel Development
* Comparison of Qualification and Profile
* Training Need Analysis
* Training Schedules
PLANT MAINTENANCE
* Preventive Maintenance Control
* Equipment Tracking
* Component Tracking
* Plant Maintenance Calibration Tracking
* Plant Maintenance Warranty Claims Tracking
PLANT MAINTENANCE
Preventive Maintenance Control
Planning, Scheduling, and Control of facilities
and Equipment
Monitoring by:
a) Hours of Operation
b) Units of Production Produced
c) Gallons of Fuel Consumed
d) Number of Days in operation since the last
service level
PLANT MAINTENANCE
Equipment & Component Tracking
Acquisition and Utilization History
Asset Management
Identification of Chronic Problems
PLANT MAINTENANCE
Plant Maintenance Warranty Claims Tracking
* Establish Type and Length of Warranty
* History of Warranty Maintenance
QUALITY MANAGEMENT
1. Quality Planning (Management of basic data for quality
planning and inspection planning, Material Specifications,
Inspection Planning)
2. Quality Inspection (Trigger Inspections, Inspection
Processing with inspection plan selection and sample
calculation, Print shop papers for sampling and inspection,
record results and defects, make the usage decision and
trigger follow-up actions)
3. Quality Control (Dynamic sample determination on the
basis of the quality level history, application of statistical
process control techniques using quality control charts,
Quality Scores for inspection lots, Quality notifications for
processing internal or external problems and initiating
corrective action to correct the problems, Inspection lot
processing and problem processing)
QUALITY MANAGEMENT
Computer Integrated Quality Management (CIQ)
* Material Management (Purchasing, Inventory
Management, Warehouse Management, Material
Requirements Planning)
* Production (Work Scheduling, Shop Floor Control)
* Sales and Distribution (Delivery, Creation of Quality
Certificates)
MATERIALS MANAGEMENT

Pre-Purchasing Activities

Purchasing

Vendor Evaluation

Inventory Management

Invoice Verification and Material Inspection
MATERIALS MANAGEMENT
Pre-Purchasing Activities
MATERIALS MANAGEMENT
Purchasing Activities
Purchasing Integration with other modules
1.Cost Accounting System
2.Financial Accounting System
3.Sales and Distribution
MATERIALS MANAGEMENT
Vendor Evaluation
1. Deliver Date, Prices etc.  Purhcase Order
2. Quality Results  Quality Management
3. Lead Times  Material Planning
MATERIALS MANAGEMENT
Inventory Management
1. Maintenance of Stock
1. Quantity
2. Value
MATERIALS MANAGEMENT
Invoice Verification and Material Inspection
1.
2.
3.
2 Way  PO Quantity
3 Way  PO Quantity + Receive Quantity
4 Way  PO Quantity + Receive Quantity + Inspection Quantity

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