SAP Integration

Agenda
SAP R3 and Integration

The different modules

Unisup and Salsa are based on SAP R/3

SAP is used by more than 17500 companies over the world. AllRichesse the petroleum fonctionnelle companies have chosen SAP. It enjoys the benefit of more than 20 years feedback and is grounded on the best sectorial and industrial practices.
Solution key points SAP intgre Integrated system Single database Systmes ouverts Common application
Single input

Key benefits
Sound, reliable data Real time

Overall view of the process

Reporting

Destins Improved tous les steering types d'activits

Common language Shared data

Harmonised processes

User-friendly Architecture system client/serveur

Multinational
Windows type ergonomics

Overall time saving

3

Business coverage of the System

Finance
Finance
General Accounting Corporate and statutory reporting Accounts Payable & Receivable Treasury Fixed assets accounting
FI-AA SAP Modules

Maintenance & Inspection *

Maintenance and inspection

PM SAP Module

Corrective maintenance Preventive maintenance Resource workload Historical events and reporting

Delegation of Authority
Profiles System authorisations

Cost control
Controlling Project management
Budget monitoring Commitment monitoring Timesheeting Controlling
CO/PS SAP Modules

JV
Procurement**
Materials management
Purchasing Stock movements Inventory management
MM SAP Module

* Unisup affiliates ** Unisup & Salsa affiliates V3

The SAP R/3 modules

Integrated solution MM
Materials mgt.

SD
Sales

FI
Financial ACCOUNTING

Rich in functions JVA AA

Fixed assets

Joint Venture

PP
Production

Open systems

R/3
Client / Server ABAP/4
HR
Ressources Humaines

CO

QM
Quality assurance

PS
WF
Workflow

Cost control

Project mgt

PM

Destined for all types of activity

Maintenance

IS
Metier solutions

Client/server Architecture

Multinational

Definition of the SAP Structures

Client Controlling Area Company Code Purchasing Organisation Plant
The system environment (all the structures, all the material and financial flows of a company or group of companies are defined at that level The Controlling Area contains all the Cost Objects and the structures used Analytical Accounting Within a client, the Company Code is a legal independent entity, which produces its own balance sheet and has its own separate profit and loss statement

Structural unit, whose role is to negotiate the general purchasing conditions with the vendors for one or more plants so as to prepare purchasing contracts
The Plant is an operational unit, which takes care of all the aspects around logistics (Independent on stock, purchasing management, and permissions). The Warehouse is a physical storage unit managed by the division.

Warehouse

Integrated Business Flows - Link between Functional Areas

PM Maintenance
Manpower hours
An event in one domain impacts the other domains Reservation by WO Purchase requisition

MM Purchasing /Stock

Purchase requisition Order, Stock movement Goods Receipts and Invoices Receipt

Invoices and Financial postings Out of Commitment

Controlling
CO/PS Accounting FI/AA JVA

The ERP

JV accounting

MM-FI-CO Integration - Integrated Business streams

Logistics flow

Purchase requisition

Purchase Order

Good Receipt

Invoice Receipt

Availability control if put in place

Controlling flow

Generation of the commitment

Updating of the commitment

Transfer of the commitment to actual

Update of the actual

Accounting flow

Data and flow consistency is maintained over the time

GR/IR Accruals

Posting of the invoice

The Core SAP Modules

The Modules
MM PM FI CO & PS AA JVA Material Management - Purchasing Plant Maintenance FInancial Accounting COntrolling & Project System Assets Accounting Joint Venture Accounting

Purchasing : The MM module

MM Material Management
The MM module is used to : Manage and optimize the purchasing and procurement

processes
Manage the Stocks Manage logistics to the production sites

Purchasing : The MM module

Planning

Functions

Purchasing
External procurement

Invoice Verification

Goods receipt Mgt. of storage locations

MASTER DATA
Material Vendors BoMs (Procurement sources)

Stock management
Invoice receipt Goods issue Stock transfers

Controlling, Accounting

Users

MM: Purchasing flow

Material & Resource Requirement Planning

Call for Tender

Invoice Verification

Invoice Payment Vendor Selection

Service Acceptance

Contracts Goods Receipt Dispatch Purchase Orders

MM: the master data

The master data are depending on the structure. They are stored at different levels.

Common data
Client

Plant

Plant-specific data

Warehouse

Warehouse-specific data

MM: e.g. Vendor Master data

General Data View Number Address Telephone Fax Bank view Bank details

Client level

001 0001 0002 0001 0002 0003 00010004 0002 0003

Company Code level

Company view Payment methods Collective account Payment conditions

FI

Purchasing organisation level

Purchasing view Order currency Payment conditions Incoterms

Partner functions view Partner functions

MM

MM: Purchase Request Flow

By a user Launch

Decentralised purchaser

Purchasing Dept.

By PM

Purchase request

Call for Tender

Order

By the MRP

Necessary: Material or service Date Quantity

Maintenance management: The PM module

PM

Plant Maintenance

The PM module is used to follow-up the repair actions on the production equipments.

It helps following up the material consumptions, the time spent by time sheeting resources, the timeline of the repair action.

Plant Maintenance : Integration with the other modules

Integration with MM
Material Reservation, Purchase requests generated through PM work orders The order release validates the stock reservations and the purchase requisitions

Integration with FI and CO

The work order is considered as an Internal order, therefore useable as a receiver cost object for maintenance purchases Types of costs
Human resources based on activity types Technical resources based on activity types Stock consumption Direct purchases Services

Financial Accounting : The FI module

FI

Financial Accounting

The FI module is used to follow-up :

Accounts Payable : Vendor Accounting Accounts Receivable : Vendor Accounting

General Ledger Accounting Inventory Valuation

Financial Accounting : Invoice Receipt process

FI Module MM Module

Invoice verification
Invoice with Order commitment (order)

Purchase Request

Purchase Order

Goods Receipt

Invoice Receipt

Payment

Invoice without commitment (e.g. electricity)

Invoice parking

Invoice posting

Financial Accounting : Invoice posting scheme

MM invoice (PAM activated: Purchase Account Management)
32xxxx Stock 2400 EM/EF 408000 2400

Receipt of a goods item

602 Stock purchases 2400

603-Stock variation 2400

EM/EF 408000

Vendor 401100 2400

Posting of the invoice

2400

This is the standard SAP posting scheme (for affiliates using MM)
Accounting entries only for PAM affiliates Inventory is reflected in Controlling

Financial Accounting : Invoice posting scheme

MM invoice for a Service
605xxx Service purchases 2000 EM/EF 408000 2000

Receipt of a service

EM/EF 408000

Fournisseur 401100 2000

Posting of the invoice

2000

Financial Accounting : Invoice process

FI invoice
Parking: the parking operation creates NO posting in general ledger. It is just an information or a memo posting Posting : either using a parked invoice or directly entering an invoice for posting.

Financial Accounting : Inventory

Thanks to the MM-FI Integration, most of the accounting
entries related to inventory valuated postings are automatically generated The good in transit process has its own specific process. The postings that still need to be done directly in FI are :
Depreciation on non moving stocks (automatic computaion in MM, manual posting to be done in FI) Scrapping and partial sales.

Controlling : The CO and PS modules

CO-PS Controlling & Project System

The CO and PS modules are used to monitor operational costs, the overhead and projects costs.

Controlling : Vocabulary

1/6

Important, the creation of a Cost object is never a minor event. It has to be considered is relation to a structure change, an operation to follow, a project phase, a field Cost Center Cost Object for analytical postings, most of the time collecting operational costs, generally the common costs that will be reallocated. The cost centers are emptied :

by sending activity types (human and technical resources)

through additive costs (storage costs), through monthly allocation cycles

Controlling : Vocabulary
Work Breakdown Structure Element (WBSe)
Cost Object for analytical postings linked to a WBS project

2/6

The WBS can be an operating field or an asset, structured in WBS Elements

This structure is done considering the requirements of both the technical and the corporate reporting The WBS Elements are long lasting objects, most of the time on several years.

They are the final costs receivers They have several statuses allowing different actions such as
planning, posting,

They are the receivers of the operational costs (activity,

overhead, common costs) linked to production.

Controlling : Vocabulary
Internal Order (just for information)

3/6

Cost Object used to track short lifecycle operations such as

maintenance action (PM work orders) or long lifecycle (asset depreciations, large maintenance operations) The internal orders are intermediate cost object in the cost settlement cascade done each period end (whether they are statistical or not). They are settled to Cost centers or WBS Elements each period. This settlement is handled through settlement rules defined at he same time as the order master.

Controlling : Vocabulary
Cost elements

4/6

Primary Cost Elements = P&L G/L account of the FI Chart of account Secondary Cost Elements = used for analytical postings only, to transfer costs or revenues from one Cost object to another. Activity Types They are used to input activity quantities, in planning and actual, that will be valuated at a given rate. T allows the transfer of quantifiable costs from a Sender Cost Center (provider) to a Receiver Cost Object (consumer) The price is constant the hole year. The sender Cost Center is monthly emptied by an actualization of the activity price, based on the consumptions and the monthly variance. Business Rule : For a giver Sender Cost Center, there can be ONLY ONE Activity type provided.

Controlling : Vocabulary
Allocation cycles

5/6

They are used send costs from Cost centers to other Cost Objects, based on the following criteria : Fixed amounts Fixed percentages Variable portions of costs on Cost elements Statistical Key figures All these criteria cannot be changed during the fiscal year in cumulative mode, because it will induce instability.

Statistical Key Figures Document

It is the documents linked to the SKF values. It is a set of receiver values. It is the flexible way to change the allocation cycles basis. It is the only possible variable parameter useable in cumulative cycles.

Settlement rule
Mainly for Internal Orders (exists for WBS Elements, but should be used as WBS are final receivers). It contains the rules along which the internal order will send its costs to receiver cost objects.

Controlling : Vocabulary
Planning preparation

6/6

All the tasks related to collecting the information and values to plan budget, costs and revenues. Tasks related to Cost follow-up and actual realizations

Planning
The support and collector of all the above actions

Budget
Approved expenses planning related to the effective funds avalibility.

Additive Costs (used only in some affiliates)

Some overhead or common costs can be done through a complex allocation scheme. The overhead origin is always held in a Cost Center.

Analytical structure and allocations

WBS Project

100%
100% WO1 WO2 70% 30%
Timesheet based

100% IO2

CC2

80%
CC1 IO1
Fix costs

5% 15%

CC3 CC4

The Cost Objects

Upstream processes
Purchase request Allocation cycles Stock Movements Labor hours Invoices and Accounting postings without commitment

Purchase order

WBS element

Cost Center

Internal Order

Receiver Analytical Cost Objects

Assignment on cost centers

Purchase requisitions

Order

Stock movements

Labor hours

Invoices & accounting postings without commitment

Cost center (K)*

WBS element

Internal order

Fixed assets

Assignment Settlement

* K : A type of assignment on cost centre to be filled in on the item in the purchase requisition or purchase order

Assignment on Internal Orders

Purchase requisitions

Order

Stock movements

Labor hours

Invoices & accounting postings without commitment

Internal Order(F)*

WBS element

Cost Center

Fixed assets

Assignment Settlement

* F : A type of assignment on internal order to be filled in on the item in the purchase requisition or order

Assignment on WBS Elements

Purchase requisitions

Order

Stock movements

Labor hours

Invoices & accounting postings without commitment

WBS element (P)*

Only for CAPEX projects

Internal order

Cost centre

Fixed assets

Assignment Settlement

* P : A type of assignment on WBS element to be filled in on the item in the purchase requisition or order

Assignment on Fixed Assets

Purchase requisitions

Order

Stock consumption

Labor hours

Invoices & accounting postings without commitment

Fixed assets (A)*

WBS element (P)*

Assignment Depreciation Settlement.

Internal order

Cost centre

* A : A type of assignment on Fixed asset acquired to be filled in on the item in the purchase requisition or order

Finance Accounting: The AA module

AA Asset Accounting

The AA module is used to monitor fixed assets (AA)

The AA module
In some affiliates, depending on its size (large Unisup and Salsa affiliates) this module is integrated with the modules CO and PS In that case, the Receiver of the Fixed assets information and, later, depreciations, is the WBS element (on CAPEX Structures) The costs are settled monthly to an asset under construction (AuC) first, and then on final fixed assets at the Asset installation.

PS FI AA Integration

FI
CO PM CATS MM

Assignment

Settlement, Allocation cycles (order, activity)

Fixed asset

FI

Time sheets PR/PO commitments

c PS

(*) purchase requisition / purchase order

AA Module Assets Accounting

Capitalized expenditure : the investment process using PS

Project Creation

Posting of costs on the WBS element

Period-end closing

Fixed Asset Installation

WBSe
CA Asset under Cons Asset in service

Characteristics: . Investment profile . Linked to an AUC . Linked to a fixed asset at installation . Definition of settlement rules

Costs Monthly settlement Final Settlement

The different steps towards capitalization

1 - Creation of a WBSelement (PS) - Creation of the AuC (link with AA) 2 - Creation of purchase requisition (MM) and creation of commitment 3 - Creation of Purchase Order (MM) and transfer of commitment to (CO)

4 Good Receipt (MM)

6 Posting preparation (transfer from the expense account to AUC account) after Cutback 7 Settlement in Fixed Asset 8 Definitive Fixed asset accounting, movements (AA) 9 - Depreciation (AA) 10 - Closing (AA)

Finance Accounting: The JVA module

JVA

Joint Venture Accounting

The JVA module is used to monitor the accounting with the Associate Partners

SAP JVA philosophy

FI
Balance sheet accounts (1 to 5) Primary cost elements (6 to 7)
Secondary cost elements Class 8

CO/PS

JVA

P&L accounts (6 to 7)

Integration JV (1 to 8)

Analytical posting flows

E X T E R N A L E X P E N D I T U R E

Running

Operations

Results
Partners E% CAPEX / OPEX

DF
Personnel Procurt.

Appro s IS SI

Operated works 100% Drilling

IO
or Nonopd works E%

C U Group T E% B CAPEX / A OPEX C K

Group Non-opd works

Environt

DAP

W O

R E C E T T E S

Objects:

Cost Centers

Orders

WBS

JVA

SAP JVA philosophy

The JVA module collects all the FI and CO posting among Joint Ventures = Association
All the FI entries are linked to a Joint Venture through its cost object Each Cost object (cost centre, WBS element, internal order) is assigned to only one Joint Venture

Some postings and processing JVA specific also generate FI and CO postings
Cash Calls
The allocation of exchange currency differences to the relevant JV Venture Bank Switching (VBA): verifies that the expenses have been effectively paid through the relevant JV (bank account linked to the JVs) and makes the necessary funds transfers cross-joint venture to correct if needed

Cutback: invoices the costs to each partners according to its % share in each JV
Netting: automatic clearing and posting of the balance in the partner accounts (Client and Vendor accounts). Its clears cutback and cash-calls Parent Company Overheads

Master data, Operational and Functional requirements

Company code

1
The partners are created as Vendors and Customers They are then linked to the JV in which they are associated

JV partners

Object type A Recovery Indicator B

JOA * 3 Joint Venture

(Field, platform, etc.

Equity Group(s) 3 Equity Type(s)

Relative equity shares of the JV partners Operator equity share (TOTAL) Funding Currency
Mgt. Of the Equity Types in the JV Capture of the Equity Group in the JOA Validity Date of the equity type Mgt. of the "Inter-company Venture" Billing Currency Activation

Cost Objects
Cost Centers WBSe Internal orders

* Branch or Establishment

Each cost object must mandatory be linked to a Joint Venture a Recovery Indicator (RI) an Equity Type an Object type

JVA master data: some definitions

Each cost object is linked to:

The Joint Venture and an Equity Type (participation class)

The Recovery Indicator determines whether or not the costs received a this Cost object can be re-invoiced or not to the partners (through the cutback)
BI Billable CP Corporate NB Non Billable CB Cutback (posting of partner invoicing)

the object type classifies a cost object as Capex or Opex (item of JVA reporting) Class (JIB) code for JVA print management (details of costs invoiced,
invoicing to partners)

Sub-class A (JIBE) subcode, for managing JVA printing

(details of the costs invoiced, invoicing to partners

Operator as Partner Scheme

Exploration of license "A"

JV1o Billing to partners

Exploration of license "A"

Assets JV1c

Operation costs of field "B" JV2o Structure costs

Operation costs of field "B" Depreciation Sales JV2c Non operated activity Billing from partners Depreciation Sales Non operated JV Sole costs Sole JV

P r o f i t & L o s s

Assets

Common JV

Common JV 100 %

Operating JV 100 %

JV contract ant Quote-part

Operator as Operator Scheme

Exploration of license "A" - Partner share JV1o Assets

Operation costs of field "B" Structure costs - Partner share Depreciation Sales JV2o

Billing to partners

Non operated activity Depreciation Sales Non operated JV Sole costs Sole JV

Billing from partners Assets

Profit & Loss

Common JV Common JV 100 % Activities 100 %

JV (Operator) share