July Certification Diet

1. You are using special prices in SAP Business One and you observe blue rows in the special prices window. Blue rows shows that
A. The item rows are not in stock.
B. Special discount groups are the row items.
C. No special prices were defined for the item rows.
D. The item rows have validity/quantity based special prices defined for them.

Answer: D

There are business requirements in which you do not want special prices to depend directly on the business partners, but on the items and associated price lists. If a customer buys an item, and neither a special price nor a discount group has been defined for the customer or this item, the special prices for the price list applies. This is setup under Inventory > Price Lists > Hierarchies and Expansions. When the lines for special price are expanded, the special price is displayed in blue in the Hierarchies and Expansions window.

2. Commission can only be calculated for the following except

A. Sales Employee
B. Item group
C. Item
D. Customers

Answer: B
During system setup, under Administration > System Initialization > General Settings, BP Tab, you can define how commission is calculated. Commission can be awarded based on the sales employee, item or customer specified in the document. This setting influences where you can specify the sales commission percentage, but does not automatically calculate any commission transactions. This setting is not static; it can be changed at any time. Commission calculation cannot be defined for Item group.


3. You want to use the Pick and Pack manager in SAP Business One, what are the statuses available?
A. Open
B. Picked
C. Released
D. Blocked

Answer: A, B, C
The Pick and Pack Manager is used to handle the picking process. The process starts with the creation of a pick list, then to the reporting of picked quantities, and ends with the packaging and delivery of the picked items. The possible Pick and Pack statuses are Open, Released and Picked.
Open - Displays the open Sales Order or Reserve Invoice rows.
Released - Displays the released quantities ready to be picked that exist in the pick list
Picked - Displays the picked quantities.
Blocked is not valid status.


4. What happen when you define the opening balances function and the system currency differs from the local currency?

A. An error message appears
B. You must manually convert the balances
C. The balances are converted automatically
D. It is not possible to enter opening balances when different system and local currencies are used in a company.

Answer: C
When using the opening balances functionality, enter opening balances in the local currency in column OB (LC) only if data is to be entered in the local currency. If the system currency is different from the local currency, the system automatically calculates the opening balances in the system currency and displays the values in column OB (SC). Hence, it is possible to enter opening balances even when the local and system currencies differ and an error message is not displayed as a result. If a foreign currency has been defined for an account, the OB (FC) field will be active. The system automatically calculates the amounts in the local and system currencies, using the valid exchange rate on the value date. It is important to state that opening balance for a multi currency account can only be entered in local currency


5. Which of the following is/are true about the Data Transfer Workbench when it encounters an error?

A. Rollback occurs and all data records that are already imported are removed from the system
B. An error message is displayed and nothing happens.
C. The import process stops after a number of errors, yet to be imported records are stored in an error file
D. The import process stops after a number of errors and all records that have already been imported are retained in the system.

Answer: A, C, D

The Data Transfer Workbench is a tool for data migration. Another functionality that can be used for importing data into SAP Business One is the native import functionality. SAP Business One has a number of ways of handling errors while importing data into the system. When error is encountered while data upload is in progress, a rollback occurs and all data records already imported are removed from the system. Alternatively, the Data Transfer Workbench stops the import process after a certain number of errors and does not rollback. All records that are yet to be imported are stored in an error file while the records that are already imported remains in the system.

6. Which of the following are true about the uses of user defined fields in SAP Business One.
A. It is used for integration into document templates
B. It is a tool used to generate SQL statements
C. It is used to find objects
D. It is used to format data records

Answer: A, C
User defined fields can be used for document template integration, search objects, store additional information such as pictures and files and reporting. It is not a tool for generating SQL Statements. The Query Wizard and Query generator are tools used for generating SQL statements. However, user-defined fields can be displayed in the print layout designer or in the Query Generator window. Also, it is not used for formatting data records.


7. What are the levels of authorization available in SAP Business One?
A. None
B. Read Only
C. Full
D. Peer

Answer: A, B, C
SAP Business One has it's own in built authorization levels. Authorizations allow users to view, create, and update documents and you assign them according to data ownership definitions. This is to enforce some sort of data security and controlled access. By default, a new user has no authorizations. The three possible levels available are None, Read Only and Full.
None: the user has no access to that functionality.
Read Only: the user can only view, but not change data.
Full : the user is able to display and modify data for that functionality per module.
Peer is solely related to data ownership concept in which the user and the owner share the same manager on their corresponding employee records.

8. The types of Balance Sheet accounts includes the following except
A. Asset
B. Equity
C. Liability
D. Cost of Sales

Answer: D
A typical Chart of accounts is made of two major types of accounts, namely the balance sheet accounts and profit and loss accounts. For the balance sheet accounts, three types of accounts are available. They are Asset, Liability and Capital and Reserve, otherwise called equity. Cost of sales is a typical Profit and Loss accounts and not a balance sheet account.when a balance sheet report is processed, the asset account is displayed on the active side while the liability and equity accounts are displayed on passive side.

9. Where in SAP Business One is the system and local currencies configured.
A. Administration > System Initialization > Company Details
B. Administration > System Initialization > General Setting
C. Administration > setup > Financials > Currencies
D. Financials > Chart of Accounts

Answer: A
SAP Business allows you to manage your accounts using system currency, local currency and multi currency. These definition can be made under Administration > System Initialization > Company Details, choose Basic Initialization. The system and the Local currency can be the same or different, however, the reporting currency is the system currency. This definition is not made under Administration > System Initialization > General Settings. All currencies used in a company are defined under Administration > Setup > Financials > Currencies. The chart of accounts is accessed under Financials > Chart of Accounts. The chart of accounts is an index of all general ledger accounts; hence, system and local currencies are not defined there.

10. Is it possible to have a negative balance in a credit field? True or False.

Answer: True
It is possible to display credit balances in negative. This is setup under Administration >System Initialization >Company Details >Basic Initialization tab. By default, the debit balances are displayed with a negative sign. The system displays a credit balance with a negative sign because the credit balance depicts liabilities in an asset account. This setting is sensitive because it impacts on Opening balances for G/L account and business partners. Furthermore, the settings cannot be changed after transactions have been posted.

MRP in SAP Business One: A Business Scenario.

Introduction
MRP – Material Requirement Planning in SAP Business One creates recommendation for purchase orders and production orders based on some inputs such as Purchase Orders, Sales Orders, Inventory Status, Forecast, Bill of Material, Lead time, Minimum Order quantity, Parent dependent requirement, Parent Production Order, etc.
Essentially, MRP works like an expert system, which determines how much would be purchased for a purchase item and produced for a manufactured item at a particular point in time.
It can be said that it is an intelligent system!

In this posting, I will concisely explain the SAP Business One MRP Run, Result and Recommendation. This I intend to achieve by using a simple business scenario detailed below. A number of screen shots are provided to better analyze the concept.

Business scenario
Company ABC produces and sells item X. Item X is a produced (make) not a purchased (buy) item and it is managed by MRP. It is assumed that the components needed to produce Item X is in stock. It has a lead time of 6 days and a minimum order quantity of 10. As at today, the inventory status of item X is shown below.
1. 40 quantities of item X are in stock.
2. 60 quantities of item X are ordered as a result of a production order raised with due date in one month from today.
3. 30 quantities of item X are committed as a result of a sales order received with delivery date in two months from today.
4. 70 quantities of item X are available. This can be calculated from this formulae:
Available = in stock – committed + ordered
= 40 – 30 + 60 = 70
(see Figure 1 and Figure 2)

Figure 1


Figure 2


The planner knows from his prior knowledge of how the demand for item X flows, hence, he forecasts that, there will be a demand for 100 and 8 quantities of item X in the next 4 months and 6 months respectively. He also wants to plan for the next 8 months starting from today at an interval of 2 days. Furthermore, the MRP run for item X is designed to consume the forecast, existing stock, production orders and sales orders.

Forecast Definition
The forecast for the business scenario can be defined by accessing the path below.
MRP > Forecasts (See Figure 3)

Figure 3


Enter FORECAST 4/6 in the Forecast Code
Enter FORECAST 4/6 in the Forecast Name
Start Date: Today’s date + 4 months
End Date: Today’s date + 6 months
Item No: X
Today’s date + 4 months: 100 (See Figure 4)
Today’s date + 6 months: 8 (See Figure 5)

Figure 4


Figure 5


The MRP Run
The MRP wizard in SAP Business One has 5 major windows.
The following figures show the windows and information required or transactions performed on each window.
The functionality can be accessed under
MRP > MRP Run

Figure 6


Click Next in Figure 6 above, Figure 7 displays

Figure 7


Enter values for the Scenario Name and Description
Scenario Name: SCENARIO X
Description: SCENARIO X
Then click Next. Figure 8 displays

Figure 8


Enter values for the scenario details
View Data in Periods of: 2 Days
Start Date: Today’s date
End Date: Today’s date + 8 months
Item Code From: X
Item Code To: X
Choose Save Scenario
Choose Next, Figure 9 displays

Figure 9


Enter values for the data source
Select Existing Stock
Select Sales Orders
Select Production Orders
Select Min. Inventory Level
Forecast: FORECAST 4/6
Select the Warehouses

Click Run, Figure 10 displays. This is the MRP Result screen

Figure 10


MRP Result
Typically, MRP result is made up of four major parameters: Initial stock (for the period), Receipt (for the period), Gross requirement (for the period) and Final stock (net requirement for the period).

Using our business scenario, two due dates are worthy of note as it relates to the MRP result.
1. 18.8.06 (After one month)
2. 19.9.06 (After two months).
See Figure 11 below.

Figure 11


As at (1) above, there’s an initial stock of 40 (from today’s stock), a receipt of 60 and the final stock is 100.
As at (2) above, initial stock is 100 (a summation of today’s stock of 40 and receipt of 60 from the purchase order). Gross requirement is 30, from the sales order. The final stock therefore is 70, which is initial stock – gross requirement.

The MRP Recommendation report
As earlier stated, MRP creates recommendation for purchase order and production order depending on whether the item in question is a purchase item or production item. Item X in our business scenario is a produced item, hence the order recommendation report for the business scenario will contain two lines of production orders as shown in Figure 12 and 13 below.

Figure 12


Figure 13 - Order Recommendation Report


The first line will be a recommendation for 30 quantities of item X while the second line will be for 10 quantities of item.

Reason
Line 1. Remember that we have 70 in stock for the gross requirement from the first forecast quantity (next 4 months) of 100.
Line 2. Remember that we designed a gross requirement of 8 quantities of item X from the second forecast (next 6 months). However, item X has a minimum order quantity of 10. Take note that the due dates picked by the system is calculated from the dates defined for the forecast.

The pegging Information
The pegging information in SAP Business One can be analyzed by checking the quantity displayed in either the receipt row or the gross requirement row of the MRP result window.
When the quantity for the receipt row is clicked, the source of the receipt is displayed. The source can be a purchase order or/and production order. The pegging information for gross requirement displays the source of the requirement, which can be open purchase orders, sales orders or forecasts.
The pegging information for the MRP result of our business scenario are shown in the figures below
Pegging information for receipt of 60 – 18.8.06 (see Figure 12) Note: I chose 2 Days interval

Figure 12


Pegging information for gross requirement of 30 – 19.9.06. (see Figure 13)
Figure 13


Colour Attributes
The MRP result has some “graphics sense”. Pale gray cells depicts periods where due date can not be met as a result of long lead-time. The values in these cells are displayed in red. Yellow cells depict periods in which receipt or gross requirement takes place.

Conclusion
Conclusively, there’s more to just running an MRP system. Been able to critically and objectively analyze the MRP is key to the success of an MRP system, especially when it is dependent on the ERP system – SAP Business One. This is because; the flaws in some definitions like lead-time, due date and even forecast, can impair on other modules like inventory, which can rubbish, not only the MRP system but also the ERP system.

The Procure - to - Pay Cycle

Introduction

SAP Business One has the capability to meet the procurement process needs of SMBs - small and medium scale businesses. In a typically organization, there's usually a purchasing department. The responsibility of this department is to handle the procurement of materials. However, this process impacts on other departments - inventory, material requirement planning, production and Financial. Suffice to say that, at any point in time, you are either impacting on stock quantity and/or stock value.

In this posting, I shall be explaining the procurement process in SAP Business One as it relates to inventory and of course financial. Ideally, the process starts with a purchase requisition is created and then purchase order. A goods receipt that is based on the purchase order is then created. Based on the goods receipt, an invoice is then created upon which the outgoing payment transaction is based. However, in SAP Business One, purchase requistion is not catered for.


Figure 1.

At this juncture, it is worth mentioning that SAP Business One leverages the draw document wizard to facilitate the creation of a target document (e.g Goods Receipt PO) based on a source document (e.g purchase order). During the copying process, options as to how the inheritance of definitions should be carried out can be customized if need be. It is important to state that the A/P Invoice is the only document that is mandatory in order to register a procurement process. Base documents such as the purchase order and the goods receipt PO are optional.

The Purchase Order
The purchase order is a document used to request a supplier to supply goods or services. This document usually contains strict conditions on which the supply is based. A purchase order can be tied to cost centers or projects. The essence is to allow for better analysis as to what it's actually meant for. Goods receipt and invoicing ideally references the purchase order.

You can minimize data entry by duplicating an existing purchase order. Also, when purchase order data such as the vendor and items are entered, default values are displayed based on the definition in the relevant master data. For example, the address of the vendor, the payment terms and payment systems, price and item description are copied from the corresponding master data.

The purchase order contains the header part, line details and the footer. The header part contain information about the entire purchase order such as document currency, document date and due date. The line item level contains information about the items ordered such as item code and name. The footer also displays general document information such as payment due and total discount value.

When a purchase order is created, no entry is made in accounting; however, the inventory status is updated based on the quantity ordered. This is reflected in the ordered and in stock fields in the inventory tab of the item master data and the inventory report. The Purchase Order can be accessed under:
Purchasing - A/P > Purchase Order

Figure 2 shows the Purchase Order screen.

Figure 2


Goods Receipt PO (GPO)
The second step in the procurement process in SAP Business One is the creation of goods receipt that is based on a purchase order. Ideally, referencing a previously created purchasing order creates this document. However, it can be created without referencing the purchase order. When you record the receipt of goods, the system updates the open item for the purchase order.

At this stage, it is pertinent for the appropriate department to check whether the correct items are delivered and whether the actual quantity has been delivered, over delivery and under delivery is also ascertained at this level. In more complex situation that involves perishable items like pharmaceuticals, the expiration date can also be validated at this stage.

It is possible to create several goods receipt by referencing a single purchase order especially when batch delivery is practiced. When a goods receipt is created based on a purchase order, the information entered in the purchase order is inherited. Hence, the elimination of the need for double entry. However, some of these definitions can also be edited or modified when creating the goods receipt.

When goods receipt PO is created in the system, the inventory status is updated by the quantity received. Also, if stocks are continuously managed, relevant accounting information is updated in financials. The Goods Receipt PO can be accessed under
Purchasing - A/P > Goods Receipt PO

Figure 3 shows the Goods Receipt PO screen.

Figure 3

AP Invoice
After purchase order and goods receipt creation, comes invoicing. When you reference a purchase order or goods receipt when creating an invoice, the system copies the data defined in the preceding document(s). This information includes vendor details, item code, item description and quantity. These inherited values can be modified, for example, installment payment. However, the system verifies if there are irregularities between the purchase order or goods receipt and the invoice. System messages are displayed accordingly depending on the business rule defined in the system and invoices can be blocked as a consequence. Basically what happens at the background is that when an invoice is based on a purchase order and goods receipt, the system copies the order prices from the purchase order document and the received quantities from the purchase order document. Furthermore, the system determines the quantities that are yet to be invoiced by calculating the difference between the quantity delivered and the quantity that was invoiced earlier. The system also calculates the expected value for the items, which is a product of the quantity to be invoiced and the order price. This value is not static. It can be modified accordingly. When an invoice is created, the corresponding vendor accounts is updated accordingly. The AP Invoice can be accessed under this path:
Purchasing - A/P > AP Invoice

Figure 4 shows the AP Invoice screen

Figure 4

Outgoing Payment
Most times, outgoing payment is based on account payable invoices. When a vendor is chosen, a list of all invoices awaiting payment is displayed. You simply click on the particular invoice to be paid and effect the transaction. When an outgoing payment transaction is created, corresponding journal entry is created. Payment could be made in check, bank transfer, credit card or cash. If you create outgoing payment for a vendor that has a pre-defined consolidating business partner, the journal entry is created against the consolidating business partner.

It is possible for outgoing payment to be based on one or more invoices that were fully paid. In such case, the transaction of the paid invoices and the outgoing payment are automatically reconciled. Furthermore, the amount due and the paid/credit fields in the paid invoice are updated accordingly and the status of the invoice changes to closed.
The outgoing payment can be accessed under this path:
Banking > Outgoing Payments > Outgoing Payment

Figure 5 shows the Outgoing Payment screen

Figure 5

It is important to state that workflow - approval procedures and document reversal - Goods Return and Credit Memo are not discussed here.