Tribute To My Dad: Your Candle's Burned Out Long Before…

It is my wish to dedicate my posting today to one person that was instrumental to my success in life. Today (May 31st) makes it 7 years since I lost my beloved Daddy – Bode.

I was greatly shocked; when on June 2nd or 3rd, my Uncle (Paul Omokore) told me about the demise of my father. Ever since, a vacuum has been created in my life. However, God has remained faithful. No wonder why my twin sister, Taiye, sent a text message to my phone in the dead of the night and it read thus: “Oh! Are we not blessed? Are we not favoured? Are we not great? God has been our shield and buckler, all praises and honour be to him. It’s 7 golden years that Dad went from us but God didn’t leave us”

After reading the message, I sent this sms to all the members of my immediate family:
“I can’t believe it! It’s 7 years now that we lost our beloved BODE. God has been faithful. This is to thank you for your support ever since.”

BODE was a man of great courage and influence, a loving and caring father indeed.

Elton John, permit me to conclude with an excerpt of the lyrics of your tribute song to Lady Diana who died on the 31st day of the month - August, almost 9 years ago. And it seems to me you lived your life like a candle in the wind... your candle's burned out long before your legend ever will.

Increasing Profitability through Inventory and Financial Reports Analysis: A Case for SAP Business One

Although inventory report and cash flow report are seen as independent reports to some extent, they are however interwoven. The perception of most SAP Business One users is that the cash flow report is a product of just "current cash transactions". Yea, to some extent this assertion is true; however, there is another leg to it.

The cash flow report gives the balances of cash accounts and accounts that are subject to cash flow in the future. Inventory (Stock) itself can be perceived as money that is tied down because asset increases when stock is procured. The purchased stock can be raw materials for a finished good(s) that will yield revenue in the future. At production stage, it is classified as work-in-progress (WIP). A number of journal entries are created during the production process in SAP Business One. When components are issued for production, the WIP account is debited and the stock account of the component is credited. When the production order is completed, receipt from production is created. The stock account of the product is debited by the actual value of the finished product and the WIP account is credited. In case variance occurs, the system debits the WIP account with a negative value and credits the WIP variance account.

From the foregoing, it can be deduced that the stock value increases by the cost of production tied to the production process. On receipt from production, it becomes a sales item that is expected to generate revenue. Inventory is also updated accordingly. However, the costs incurred during production represent payables. These payables need to be settled somehow, hence the need for cash flow report, which is a critical analysis of "money - in and money - out".

The Chief Financial Officer (CFO) is not interested in high inventory (over stocking) based on the premise that it is "money tied down". Keeping high inventory is not cost effective. This is because additional costs (such as carrying costs) are incurred especially while these stocks last in the warehouse. This is not to say that inventory should be kept so low as not to meet demands or orders.

Although, the amount of inventory to be kept at any point in time is ambiguous, the inventory turn ratio is a metric for determining inventory usage. Inventory usage is calculated as a ratio of the annual cost of goods sold to the average inventory.

For the purpose of illustration, let $1,000,000 be the annual cost of goods sold and $500,000 be the average inventory; obtained from profit and loss statement and balance sheet report.
Inventory Turn = Annual cost of goods sold/Average Inventory
= $1,000,000/$500,000
= 2

If through better inventory management and financial analysis, the inventory turn is increased to 10.Average Inventory = Annual cost of goods sold/Inventory Turn
= $1,000,000/10
= $100,000

Reduction in inventory = $500,000 - $100,000
= $400,000

The implication therefore is that you can generate same sales with only $100,000 of average inventory.

Furthermore, if the carrying cost (which is based on weight/volume carried) is 20% of the average inventory, the savings will be
Savings = Reduction in Inventory x 0.20
=$ 400,000 x 0.20
= $80,000

Cross analysis of Inventory report and Financial reports such as Cash Flow, Balance Sheet and Profit and Loss Statement can lead to cost saving and ultimately, profitability. Hence, it would be nice to have a detailed and generic business intelligence report (that makes this analysis and more) like this by default in SAP Business One. What do you think?

May Certification Diet

1. Which of the following about installments in SAP Business One is correct?
A. Installments can only be defined when posting the Invoice
B. Installments can only be defined in the payment terms window and cannot be changed in the invoice.
C. Installments can be defined in the payments terms window and can also be altered when creating the invoice
D. Installments can only be defined in G/L Account Determination.

Answer: C
Installments are defined as independent objects in the No. of installments field within the payment terms window. Furthermore, after installments are defined, they can be modified in the invoice. Installments are not defined in G/L Account Determination. When setting up installments, the installment rates, month and days are defined and added to the whole invoice to determine the due date for the individual installments.

2. Your company uses the Withholding Tax functionality in SAP Business One, at which point can withholding tax be calculated?
A. When posting the invoice
B. When posting the invoice and when posting the payment
C. When posting the payment

Answers: B.
The category field of the Define Withholding Tax window in SAP Business One has two options, namely Payment and Invoice. If Payment is chosen, the withholding tax is posted when payment is made and if Invoice is chosen, the withholding tax is posted upon invoice.

3. Which of the following is/are the component of the SAP Business One Software Development Kit (SDK)?
A. Data Interface Server (DI Server)
B. Data Interface Application Programming Interface (DI API)
C. User Interface Application Programming Interface (UI API)

Answers: A, B, C
The SAP Business One SDK is used to develop additional functionality applications in SAP Business One. The applications developed are called Add-ons. The DI Server supports the integration with non-SAP systems. The DI API facilitates access between add-ons and the SAP Business One database. The third component which is the UI API facilitates access between screen elements in the SAP Business One client.

4. The Due Date for a business partner is calculated based on the metrics defined in the payment system for the business partner.
True or False?

Answer: False.
The payment system tab of the business partner master data contains payment information such as house bank details and payment methods. The payment terms contains payment data which are inherited by default in corresponding marketing documents. Such data includes due date and total discount allowed.

5. Where in SAP Business One are control accounts defined and/or managed?
A. Administration > System Initialization > General Settings.
B. Administration > Setup > Financial > G/L Account Determination
C. Administration > System Initialization > Company Details
D. Financials > Chart of Accounts

Answers: B, D
Control accounts link the business partner accounts to the general ledger. A control account must be entered for every business partner in the system. Examples of control accounts are Account Payables and Receivables, Down Payment payable and receivables, Open debts. Default control account can be entered under Administration > Setup/Definitions > Financials > G/L Account Determination. You can define a G/L account as a control account under Financial > Chart of Accounts; then check the control account box. Control accounts are not managed or defined under A and C.

6. A company is solely involved in the sales of 2 years warranty items. Which of the following is correct for a Customer Equipment Card to be created automatically for all sold items?
A. Create a service contract template with the type "Serial" and assign it to all sales items (warranty managed) in the item master data.
B. Create a service contract template with the type “Customer" and assign it to all Customers in the business partner master data.
C. Create a service contract template with the type “Item group" and assign it to all sales items (warranty managed) in the item master data.
D. Create a service contract template with the type "Customer" and assign it to all sales items (warranty managed) in the item master data.

Answer: A
Service contract can be created for serial number managed items, special customers and item groups. The implication of creating service contract for serial number managed items in the item master data is that, when a delivery note or A/R Invoice is created for that item, the system automatically creates customer equipment card and service contract of the warranty service type. Assigning service contracts of the customer and item group types to the item or business partner master data will not achieve this aim.

7. You are trying to reference a customer equipment card and you keep getting an error message. The status of the customer equipment card is likely to have been set to
A. Active
B. Loaned
C. In Lab
D. Closed

Answer: C
When the status of a customer equipment card is set to returned, terminated or in lab, an error message is displayed when you try to access it. However, a customer equipment card can be accessed if the status is set to active or loaned. Closed is not a valid status for customer equipment card.

8. The SAP Business One Duty Manager is a telephone support service that is used instead of the SAP Business One Hotline support service when critical business processes area affected due to system abnormalities.
True or False

Answer: True
The Duty Manager Support service is used when critical business processes are affected as a result of system abnormalities. The answering machine for this number is checked regularly, even outside working hours. The hotline on the other hand is used basically to contact SAP support when the SAP portal cannot be accessed.

9. A User Defined Table in SAP Business One is identified by which prefix
A. ?
B. U_
C. @
D. $

Answer: C
User defined tables are identified by the @ prefix, followed by a unique code and then a name description by default. SAP Business One stores the user defined field under the description U_ (title). $ is closely associated with query syntax in SAP Business One e.g. $[Tablename.Fieldname]

10. Which of the following databases are supported by SAP Business One?
A. Oracle
B. Microsoft SQL Server
C. IBM DB2
D. Sybase

Answer: B, C, D
SAP Business One can be deployed on Microsoft SQL Server, IBM DB2 and Sybase. Oracle is not a supported database system.

SAP Business One Solution Consultant Certification/Interview Questions.

Sequel to my posting on Becoming an SAP Business One Solution Consultant, I have decided to introduce a monthly posting of 10 certification/interview questions for SAP Business One Solution Consultants.

This is coming in the wake of the acknowledgement of the newness of SAP Business One as a solution and the need to raise quality consultants.

As an SAP Business One Academy trainer (also Certified), you can be sure to get a real feel of certification/interview questions on this blog. It is important to note that, the questions treated on this blog are not the actual certification questions, but proper understanding of the concept behind each question and answer is invaluable for success in the real exam. As a matter of fact, they take same pattern and methodology.

The postings (certification/interview questions) shall be tagged “Certification Diet”

Be on the look out for the May Diet!

Becoming an SAP Business One Solution Consultant.

Two fundamental issues are involved in becoming an SAP Business One Consultant. The first is the desire to be a consultant and secondly, the choice of system to consult for – SAP Business One. After making up your mind to become an SAP Business One Consultant, the next question to ask yourself is “What really do I want to do as an SAP Business One Consultant?”

There are a number of areas of specialization as an SAP Business One Consultant. These include Solution, Sales, Support, Development and Integration. My advice is that “specialize first in the area of your interest and strength and then diversify/update your expertise as required later”.

The concern here is the solution consultants. The solution consultants are mainly charged with the responsibility of implementation and training which entails a lot of other tasks (It’s a topic for another posting).

The curriculum for SAP Business One Solution Consultant certification program is detailed below.

TB 1000: Logistics, Service and Human Resources
Fundamentals of SAP Business One, Master Data, Purchasing (Account Payable), Sales opportunity (CRM), Sales (Account Receivable), Inventory, Production, MRP, Document Handling, Cross Functionalities, Service(CRM) and Human Resources

TB1100: Accounting
Financial Accounting, Cost Accounting, Banking, Period End Closing and Reporting.

TB 1200: Implementation and Support
Installation and Administration, User Defined Fields and Table, Queries, Alerts and Approvals, Formatted Search, Designing the Print Layout, Data Migration, Support for SAP Business One and Implementation and Operation.

For more detailed information on this curriculum and the curriculum for other areas of specialization, visit https://websmp103.sap-ag.de/~sapidp/011000358700002412472003

Difference between SAP Business One Backup and Microsoft SQL Server Backup.

As a database administrator, “Backup” is my watch word!
It is an important database management and maintenance task. Backup is an exact copy of a database/program at a point in time. Hence, a backup can be restored as the original database in case of disaster or database maintenance.
SAP Business One is an ERP system that sits on a number of database systems which includes Microsoft SQL Server, IBM DB2 and Sybase.
For the purpose of this discussion, the emphasis is on Microsoft SQL Server.
It is worth mentioning that SAP Business One has a traditional backup utility called the SBO Backup Service.



Microsoft SQL Server also has its own backup tool resident in the enterprise manager.



The crux of the matter therefore is the basic difference between using the SAP Business One backup tool and the Microsoft SQL Server Enterprise manager backup tool.
A distinctive capability makes the SAP Business One Backup service a preferred backup tool over the Microsoft SQL Server backup Engine.

The SAP Business One backup tool backs up the database and the directories defined in General Settings while Microsoft SQL Server backup tool only backs up the database as shown below



SAP Business One Backup Contents


Microsoft SQL Server Backup Content


Conclusively, it is important to state that, to restore either of the backup types, the Microsoft SQL Server Enterprise Manager is used and the content of the directories (SBO Backup) must be manually copied to the respective directories.

A Dozen Irreversible Actions in SAP Business One System Implementation

Although, SAP Business One is a simple yet powerful solution, a number of settings once configured cannot be altered, especially after transaction have been posted. This inflexibility can however make it a complex solution. Hence, it is expedient that consultants and clients alike must have clear cut business requirements before initializing the system. In this regard, I have put together a number of settings that cannot be reversed once defined. Most of these fields grays out if some transactions have been made, especially transactions that impacts on financial.

1. Local Currency & System Currency
Once a master data record (Business partner and Item) and/or transaction has been created in the system, the local & system currency definition cannot be edited.

2. Currency Code
The Currency code cannot be edited once it is created. However, it can be deleted if a transaction or master data record has not referenced it.

3. Account Segmentation
Once an account is created in the system, account segmentation cannot be reset. Also, if you use a template chart of account, the segment settings are used by the system and cannot be edited.

4. Segments
You cannot add a segment; change the length of a segment and type of a segment. Also, once G/L accounts are created, segments cannot be deleted from the system.

5. Segment values
Segment value cannot be deleted from the system once it is linked to an account definition. The only flexibility is that you can rename segment values, howbeit it does not affect existing accounts.

6. Accounts Code Generator
The Account code Generator automatically generates valid combinations of different segment values. These combinations cannot be deleted once they are used in a journal entry.

7. Purchase Accounting
If you choose to use purchase account posting system, it cannot be turned off once transactions have been posted into the system.

8. Inventory valuation
If you decide to use continuous stock system, the inventory valuation by field is check marked. Once posting have been made into the system, it is not possible to uncheck or undo this definition.

9. Handle Price System by warehouse
The handle price system by warehouse box is checked when different costs are defined for individual item and warehouse. This field (box) cannot be unchecked once stock postings are made in system.

10. Allow Stock Release without a Cost Price
The implication of choosing this option is that stock will be released without a cost price. If this option is not activated initially, it cannot be activated after transactions have been created.

11. Display Credit Balance with Negative Sign
The implication of activating this option is that credit balance is displayed with minus in front. This definition cannot be changed once posting transactions have been made.

12. Allow changes to existing Order
Activating this option allows modification to be made to sales orders that have already been created. You cannot change this setting after a sales order has been created.