Many sap erp modules cause transaction data to be

Many SAP ERP modules cause transaction data to be entered into the general ledger including:
Sales and distribution (SD): records a sale then records and Accounts receivable entry ( a general
ledger document that indicates that a customer owes money for goods received)
Materials management (MM): controls purchasing and records inventory changes. The receipt
of goods from a purchase order creates an Accounts payable entry in the general ledger, which
indicates that the company has an obligation to pay for goods it has received
Financial accounting (FI)- manages the accounts receivable and accounts payable items created
in the SD and MM modules, respectively.
Controlling (CO)- tracks the costs associated with producing products
Human resources (HR)- manages the recruiting, hiring, compensation, termination, and
severance of employees, also benefits and payroll
Asset management (AM)- manages fixed asset purchases (plant and machinery) and its
depreciation
Operational decision making problem: credit management
Industrial credit management
 Good credit management requires only so much credit be extended to customers

 Credit management requires a balance between granting sufficient credit to support sales and
ensuring the company does not lose too much money by granting credit to customers who end
up defaulting on their credit obligations
 Sellers manage this relationship by setting a limit on how much money a customer can owe at
any one time , and then monitoring that limit when new orders come in and payments are
received
 In an unintegrated system accounting may not immediately record sales or payment receipts as
they occur , in that case A/R balances will not be current
Credit management in SAP ERP
 The SAP ERP system allows a company to set a credit limit for each customer
 A company can configure any number of credit check options in the SAP ERP systems , including
when to check a customer’s credit
 Reaction C means if the order being saved will cause the customer to exceed its credit limit, the
system will issue a warning indicating the amount by which the order exceeds the limit
 Most companies have an employee who is responsible for reviewing blocked sales orders every
two hours and take corrective action
 Advantage of using SAP ERP to manage credit is that the process is automated and data is
available in real time
Product profitability analysis
Business managers use accounting data to perform profitability analyses of a company and its products ,
when data are inaccurate and incomplete the analyses are flawed.
Three main reasons for inaccurate or incomplete analyses: inconsistent record keeping, inaccurate
inventory costing systems, and problems consolidating data from subsidiaries
Inconsistent record keeping
 Happens if each divisions records are created at a different time
Inaccurate inventory costing systems
 Correctly calculating inventory costs is one of the most important and challenging accounting
tasks