Posted by: ahmedashfaque | August 15, 2014

What is SAP – SAP integration


In my last post I discussed about SAP structure. In this post i will discuss about integration of various modules in SAP.

When any business transaction is performed, many accounting entries happen. For instance, when a product is purchased, then the purchaser’s financial account is debited and the seller’s financial account is credited. At the same time, stock of products at seller’s is debited by the quantity of purchase and the stock of products of buyer is credited.

This credit and debit business for both goods and financial accounts happen at all points where goods are either transferred or sold or destroyed or taken for sample etc. This means, a credit and a debit may happen for both goods accounts and financial accounts when a goods movement like goods receipt, goods issue, goods transfer etc. happens within or outside of any business organization. Goods receipts happen when goods arrive at the customer’s premises from a vendor. goods issue happens when goods are issues for production. A goods receipt will again happen when goods are moved from production to inventory or warehouse. Goods issue can again happen when goods are shipped to a customer from inventory against a sales order.

So you see, both financial and material transaction happen through out any business organization and also outside as well. This means when a procurement transaction is done then accounting entries also need to be done in financial documents. This is true for production transactions and sales transactions as well. In fact, any business transaction involves financial entries apart from entries into material stocks.

This means integration of financial book of accounts is necessary for any procurement, production or sales transaction.

In SAP integration of modules is achieved through various means. For example when a goods receipt happens for any material received from a vendor then both a material document as well as a financial document is generated in SAP. Similarly when a goods issue happens then again both a material document and a financial document is generated. The material document contains information about debit and credit entries for material stocks. The financial document contains information about debit and credit entries about financial accounts.

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Responses

  1. […] my last post i discussed about integration of SAP modules. In this post, we will discuss what SAP materials […]

  2. The best thing about SAP is this integration. I was SD customizer in two projects, now a key user.
    Once you set it in a right way everything works automatically, and you don’t need to do things twice or even more times. From one sales order till the ending accounting document. Best business application ever!

    • Thanks for comments. Integration is the nervous system of SAP. Like functioning of our body requires connections of each part of our body to the brain and other parts, integration allows data flow through out the SAP system. Without integration SAP will never work


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