Brazil Localization

Knowledge Sharing Workshop
<Topic>
August, 2005
1
Introduction
Procwork
Introducing PW team
PP Consultant : Leonardo Abreu MM Purchasing Consultant : Marcelo Stieger & Rafa
el Costa IM/WM Consultant : Reanato Penna FI / CO Consultant : Alexandre Matoso
SD Consultant : Marcelo Stieger & Marcell Mascarenhas PM : Marcelo Stieger
2
Output & Deliverables

Understanding
Impacts of Brazil local legal requirements on Global Solution
Brazil
Consultant Risk
Complexity and effort to meet the Brazilian local legal requirements
PW
3
Localization Principles
Where do all these requirements come from?

Culture of bureaucracy
reality since very early in Brazils history continued regardless of many attempts
to modernize
Long period of high inflation
during the last decade required complex calculation rules
High historic level of tax evasion
creation a very complex set of rules and regulations
5
Legal and Tax Requirements for Brazil

What are their impacts on a SAP R/3 implementation ?
.. Mainly the requirements are concentrated on tax calculation and reporting, ne
w document flow (nota fiscal) and specific accounting rules (p.e., product costing
) .. There are specific SAP hierarchy elements and some additional customizing r
equired for Brazil in a R/3 implementation
6
Brazil Localization
Benchmark data based on Procwork Roll Out Experiences
Based on several SAP R/3 roll out projects in Brazil, Procwork have learned the
following * :
Over 300 process variants can be impacted by localization requirements Average l
evel of adherence of international templates (developed without Brazilian requirem
ents) for implementation in Brazil SAP Module Adherence* SD 40% MM 50% CO 60% FI
60% PP 90% Average 60% Some processes not fully supported by standard SAP R/3
- Foreign trade document flow & documentation - Tax reports for different region
s and/or for specific requirements of the business - some aspects of Payroll, Ex
ternal Warehouse, Bank EDI, etc ...
* impact varies significantly considering client specific business requirements,
therefore, data should be used as a benchmark reference only
7
Hierarchy
Hierarchy - Branch
The Filial (branch)
tax reporting Nota Fiscal reporting
Company
Filial
Plant
Plant
Legally represents each physical address of the company in which there will take
place any tax related operations Important data is maintained at this level
Storage Location
Nota Fiscal and Legal books are issued at this level
9
Hierarchy Company Code

JABIL Circuit Brasil
Company Code
Banch 1
Branch 2
Branches
Jabil Circuit could be structured as only one Company Code. Reports could be tak
en at Company Code level, for Legal and Business requirements.
10
Brazilian Localization
Nota Fiscal Most important fiscal/tax document for
Invoicing Accounting Goods movement

Contains taxes and business requirements Pre-printed form Sequenced numbers by p
hysical site (branch) Audited by local Fiscal Authorities Source of key integrat
ion data
Accounting information Tax information
12
Nota Fiscal Nota Fiscal Types
Nota Fiscal Fatura (invoice) Nota Fiscal Complementar (complement) Nota F
e Correo (correction) Nota Fiscal de Devoluo (returns) Nota Fiscal de Transferncia (t
ransfers) Nota Fiscal de Simples Remessa (issue goods without billing) Nota Fisc
al de Entrada (incoming - e.g. Importation) Nota Fiscal de Conhecimento de Trans
porte (freights) Nota Fiscal de Energia Eltrica (energy) Nota Fiscal de Telefonia
(telecomunications)
SAP Configuration
Nota fiscal has internal and external number ranges Depends on Sales document ty
pe Depends on Movement type
13
Taxes There are many taxes in Brazil
Main ones affecting almost all goods movements:
ICMS - Material Circulation tax IPI - Manufacturing tax PIS - Social Integration
COFINS - Contribution for social funds ISS - Services tax IRRF - Withholding ta
x INSS - Withholding tax social purpose
14
Taxes IPI is a federal tax and depends on:
Control code (in Brazil is used as NCM code) Material exception
ICMS is a state tax and depends on:

Goods movement State from (plant) / State to (ship-to) for outgoing State from (
vendor) / State to (plant) for incoming Material exception
PIS and COFINS:

Could be customized using sales organization and country
15
Taxes IRRF is a tax related to natural person (IRPF) and legal entities (IRPJ) a
nd depends on:
Vendor for incoming
INSS is a tax related to natural person and depends on:

Vendor for incoming
ISS is a city tax and depends on:

Material number for outgoing Vendor for incoming
16
Tax Reports Tax related transactions should be stored in Fiscal Books (livros fis
cais) There are rules on how to register them Requirements for printing and archi
ving are needed Different sorts of industry (or even company) operations require
reports adaptation
17
Product Costing Real Cost Method is mandatory Requires a significant amount of c
onfiguration and testing (Material Ledger) SAP have developed specific programs
to be executed every time a period is closed Localization Brazil now is part of SA
P standard.
18
Master Data
Master Data Records Material

NCM Code Brazilian naming of goods CFOP Category the type of operation Material
Destination Resale, Consumption & Asset Material Origin
Domestic Imported

Produced in-house or not Taxes Classification
ICMS / IPI ISS
20
Material Master Screen

21
Material Master Screen

22
Master Data Records Vendor

Natural person or Legal entity indicator Legal Information
CNPJ number (identification for legal entity) or CPF number (identification for
natural person) Natural person (must be set when CPF number is informed) Inscrio Es
tadual (regional tax code state inscription) Inscrio Municipal (city tax code mun
inscription) Domiclio Fiscal (jurisdiction code, ex. SP So Paulo

Situao Tributria IPI and ICMS Withholding category indicator
indicates that a tax will be withheld for payment. ex. IRRF Income tax held at t
he origin
23
Vendor Master Screen

CNPJ CPF Insc.Estadual Insc.Municipal
24
Master Data Records - Customer

Natural person or Legal entity indicator Legal Information
CNPJ number (identification for legal entity) or CPF number (identification for
natural person) Inscrio Estadual (regional tax code state inscription) Inscrio Mun
city tax code municipal inscription) Domiclio Fiscal (jurisdiction code, ex. SP So
lo

Text code
texts are printed in the Nota Fiscal
Tax Classification
0 : Not Taxable 1: Taxable 2: Zona Franca
CFOP Category
25
Customer Master Screen

CNPJ
Insc.Estadual
26
Nota Fiscal - Sales

Nota Fiscal Number Operation Description CFOP Code Inscrio Estadual CNPJ Outgoing
or Incoming Nota Fiscal ICMS item rates
Observations
Tax related part of the Nota Fiscal
27
Nota Fiscal - Symbolic Return

Nota Fiscal Number Operation Description CFOP Code Inscrio Estadual CNPJ Outgoing
or Incoming Nota Fiscal ICMS and IPI item rates and IPI amounts
NCM Code
Observation and Special Rule description
Tax related part of the Nota Fiscal ICMS and IPI Texts and observations
28
Bolt-ons
Indicative Map of Interfaces (Bolt-ons)

Payroll Banks DWWD
(EDI)
WinChem
SAP R/3
Global Marketing
Export Web Shopping Legal Books Import
30
Bolt-ons
Legal Books Export/ Import
31
Bolt-ons
Legal Books Objectives :
1. Generate the Legal Books according to the Federal, State and City laws 2. Cal
culate the amounts to be paid, issue the legal documents (gias) and generate elect
ronic files, when applied
Notes :
SAP provides some of the Legal Books based on So Paulo state only It is necessar
to issue the other books / same books for other states Most clients decide to u
se specialized bolt-on systems to support these legal requirements Even with the
se bolt-on systems its absolutely necessary to do all the configurations in the S
AP side Bolt-ons just get the information from SAP and put it into the specific
lay-outs, according to the legislation
32
Bolt-ons
Legal Books Effort :
Dependant on the fiscal requirements of the company Should start at the Realizat
ion phase
Resources :
Business input tax resources Designers tax resources Specialists bolt-on special
ists
Options :
Mastersaf Aspen-Sati Syncro ...
33
Bolt-ons
Export Objectives :
1. 2. 3. 4. 5. 6. 7. Export Data Bases Control Export Orders and Shipments Proce
sses Follow-Up Issue Documents Export Exchange Control Issue Reports Generate da
ily and monthly accounting postings
34
Bolt-ons
Import Objectives :
1. Import documentation from the Import Order to the issue of the Receipt Fiscal
Invoice 2. Import Data Bases 3. Issue Documents 4. Follow-up reports 5. Import
exchange control 6. Generate daily and monthly accounting postings
Note :
The physical receipt, as well as the fiscal and accounting receipt are not inclu
ded in the scope but may be executed in SAP
35
Bolt-ons
Export / Import Effort :
High Should start at the Realization phase
Resources :
Business input import/export resources Designers import/export resources Special
ists bolt-on specialists
Options :
Bergen Aspen CE (Procwork) Bysoft Average ...
36
The Scenarios & Presentation Approach
Customer to Cash Scenarios

For discussion SD:
Standard Sales Export Orders 3rd Party Sales Consignment Samples and Free of
rge (FOC) Customer Returns with customer Nota Fiscal Customer Returns with Compa
nys own Nota Fiscal Correction of prices or quantity
Other Local Legal Scenarios
38
Purchase to Pay Scenarios

For discussion in MM :
Standard Purchasing Stock Transfers Import Subcontracting Consignment Vendor Ret
urns
39
Finance Integration Scenarios

For discussion in FI / CO :
Product Costing Legal Books & Files
40
Finance Specific Scenarios

For discussion FI :
Accounts Payable and Payments Accounts Receivable Collections Legal Books and Fi
les Preparation
41
Presentation Approach
A Generic Business Process Model

Define & Maintain Data
Forecast
Order Handling
Planning
Purchasing
Inventory
Production
Shipping & Logistics
Invoice & Payment
Claims & Feedback
Inquiry & Quotation
Execute Work
Finance
43
Agenda <Scenario>
Overview Description of Scenario Overview Business Process Flow Main Localizatio
n Requirements Solutions SAP configuration Special Development Bolt Ons Manual w
orkaround Summary Reminder of Key Points
44
<Scenario Description>
Define & Maintain Data Forecast Order Handling Planning Purchasing Inventory Pro
duction Shipping & Logistics Invoice & Payment Claims & Feedback
Inquiry & Quotation
Execute Work
Scenario : <Scenario Name> This scenario describes
45
<Overview Business Process Flow>

Customer
Request for quotation Quotation Approved, Purchase Order Receives Goods & docume
nts Nota Fiscal for Domestic Sales
Local Legalisation Impact Description of Impact etc.
Plan Shipments & Book Transport Confirm qty Sales order
Loa d Tru ck Create/ Confirm Transfer Order
Print Shipping Doc.
Quotation (optional)
Create Sales order ref. quot.
To Production & Purchasing
Transfer Goods from production to Warehouse
Create Delivery
Post Goods Issue
Create Billing Doc. Bolt-on
Posting G/L
Account Receivable
Fiscal Books
Suppliers
Confirm Purchase order
46
<The Scenario Solution>

The Solution
What is the solution?
SAP configuration special development bolt-on manual workaround Is it a mixture
of these?
What does the solution do?
Implementation
How COMPLEX is this to do? How much EFFORT is required, type of resources, durat
ion, etc.
C
E
47
Brazilian Localization Review


ion data
48

Main ones affecting almost all goods movements are:
ICMS - Material Circulation tax IPI - Manufacturing tax ISS - Services tax PIS Social Integration COFINS - Contribution for social funds IRRF - Withholding ta
49
Master Data Records

Material
NCM Code Brazilian naming of goods CFOP Category the type of operation Materi
Destination Resale, Consumption & Asset Material Origin (domestic / imported) Pr
oduced in-house or not Taxes Classification (ICMS, IPI/ISS)
Vendor
Legal Information (tax code i.e. CNPJ) Situao Tributria IPI and ICMS Withholding ca
tegory indicator
Customer
Legal Information (tax code ie. CNPJ, Insc.Estadual) Text code (texts are printe
d in the Nota Fiscal) Tax Classification (Taxable, Zona Franca) CFOP Category
50

For discussion now:
rge Customer Returns with customer Nota Fiscal Customer Returns with Companys own
Nota Fiscal Correction of prices or quantity
52
Agenda Standard Sales

53
Standard Sales
Inquiry & Quotation
Execute Work
Scenario : Standard Sales This scenario describes the main flow of activities to
be performed in Brazil from the creation of a sales quotation (optional) and co
nvert it to a sales order until the delivery the goods to the customer, the bill
ing and the Sales Nota Fiscal generation.
54
Standard Sales
Customer
Request for quotation Quotation Approved, Purchase Order
Customer Region (state) Tax Code for Brazil Pricing Procedure for BR Domestic Sa
les Taxes calculation (ICMS, IPI, PIS,COFINS) Fiscal Texts for ICMS & IPI
Plan Shipmen ts & Book Transpor t Create Delivery Print Shipping Doc. Receives G
oods & documents
Nota Fiscal for Domestic Sales
Create Sales order ref. quot. (ORB)
Confirm qty Sales order
Post Goods Issue
Create Billing Doc. (F2B)
Generate Nota Fiscal (N1) Bolt-on
Pricing Procedure for BR Domestic Sales Taxes calculation (ICMS, IPI, PIS,COFINS
) Suppliers
Confirm Purchase order Posting G/L
Posting G/L
Account Receivable
Fiscal Books
Account Keys for BR Dom. Sales Fiscal Texts for ICMS & IPI
55
Standard Sales
The Solution
SAP configuration
Configuration specific for Brazil; New Sales order type and item category; New B
illing document; New Incompletion proc.for Brazilian mandatory fields; New Prici
ng procedure and Account keys assigned to the new condition types; Legal Text fo
r ICMS and IPI; SAP Script development for Nota Fiscal
MASTERSAF, Aspen-Sati, SYNCRO [Fiscal Books]

Special development
Bolt-on
Implementation
C
E
A standard sales order process is not difficult to be implemented. There are som
e points of attention to consider: Standard pricing procedure for Brazil must be
adjusted; Complex SAP Script development for NF; All business variants relevant
to Brazilian operations must be tested; Knowledge of the BBRAUN fiscal area to
handle correctly the Brazilian requirements in SAP
56
Pricing Procedure
* Sales Pricing Procedure for Brazil (Std.: RVXBRA)
Initial Price (PR00) -/+ Discount/Surcharge * (without taxes) __________________
____________ + Price with ICMS (ICMI) -/+ Discount/Surcharge * (including taxes)
______________________________ Tax Base + IPI + ICMS + ISS _ _ Final Sales Pric
e (NF) _______________________________ Base of PIS/COFINS PIS (statistic) COFINS
(statistic)
*Optional conditions for pricing -Automatic condition calculated by a formula IPI calculation: NCM code / material -ICMS Region-from/ Region-to -ISS Tax for s
ervices
- PIS and COFINS calculation: Condition records
57
Agenda Export Orders

58
Export Orders
Inquiry & Quotation
Execute Work
Scenario : Export Orders This scenario describes the main flow of activities to
be performed in Brazil from the creation of a export quotation (optional) and co
nvert it to a sales order until the export documentation preparation, the delive
ry to the external agent, the billing and the Export Nota Fiscal generation.
59
Export Orders
Customer
Request for quotation Quotation Approved, Purchase Order
Customer Country Tax Code for Brazil (I0,C0) Pricing Procedure for BR Export Sal
es NO Taxes calculation Fiscal Texts for ICMS & IPI Shipme
nts & Book Transpo rt Plan
Receives Goods & documents
Create Packing List
Create Commercial Invoice
Create Sales order ref. quot.
Create Delivery
Post Goods Issue Bolt-on Posting G/L
Create Billing Doc.
Generate Nota Fiscal Bolt-on Bolt-on Fiscal Books
Bolt-on
Posting G/L
Account Receivable
Agent
Request for export docum. Confirm Purchase order
Pricing Procedure for BR Export Sales NO Taxes
Confirm calculation export Doc. Nota Fiscal / Invoice for Export
Account Keys for BR Export Fiscal Texts for ICMS & IPI
Add Export Doc. Deliver to customer
Suppliers
60
Export Orders
The Solution
SAP configuration
Specifics for Brazil; Sales order type, item category and billing document; New
incompletion proc.for Brazilian mandatory fields; New Pricing procedure specific
for BR Export and Account keys assigned to new condition types; Legal Text for
Export; SAP Script development for Nota Fiscal Bergen, Aspen CE [Export and docu
mentation Control]; MASTERSAF, Aspen-Sati, SYNCRO [Legal Books] Extra export doc
umentation, communication with SISCOMEX

Special development

Bolt-on
Manual workaround
Implementation
C
E
Its a complex solution because requires or a large manual documentation for expor
t process or an new integration with the bolt-on system to solve this. Besides,
new SD documents, pricing procedure and accounting assignment must be created.
61
Agenda 3rd Party Sales

62
3rd Party Sales

Inquiry & Quotation
Execute Work
Scenario : 3rd. Party Sales This scenario describes the main flow of activities
to be performed in Brazil when for the same customer, you have a payer different
from ship-to address. Locally this process is called Venda por conta e ordem. In
this case, to support the Brazilian legal requirements, SAP system must provide
2 different types of Notas Fiscais. The first one must to be issued to the payer (
just to bill the customer) and another one must to be issued and sent to the shi
p-to address (just to follow the goods to the customer plant).
63
3rd Party Sales

Customer (payer)
Request for quotation Quotation Approved, New Sales order type (1) Purchase Orde
r
Use Customer-Payer (address)
Pricing Procedure for BR 3 rd. Party Sales Taxes calculation (ICMS, IPI, PIS,COF
INS) Account Keys for BR 3rd. Party Fiscal Texts for ICMS & IPI and Loa Plan d m
anual fiscal text Shipments
Nota Fiscal W/ ref.to Payer (send by mail)
Pricing Procedure for BR 3 rd. Party Sales Taxes calculation (ICMS, IPI, PIS,COF
INS) New Sales order type (2) Fiscal Texts for ICMS & IPI Use Customer-Send to (
address) Pricing Procedure for BR 3 rd. Party Sales
Tru & Book ck No Accountings Transport
Create Nota Fiscal (N1)
Create To Sales order Taxes calculation (ICMS, IPI, Quotation Production & PIS,C
OFINS) ref. quot. Purchasing (RCS)
Manual texts for NF (if necessary) Reference w/Confirm the first NF Goods issued
Delivery
(1) Transfer Order Issue Create Create/ Post
Create Billing Doc. (F2B) Bolt-on
Fiscal Texts for ICMS & IPI Payer
Step 1
Reference: Billing doc. Step 1 Confirm Purchase order Create Sales order ref. Bi
ll.doc. (RCM) Ship-to Create Billing Doc. (FST) Create Nota Fiscal (N1) Bolt-on
Posting G/L
Account Receivable
Fiscal Books
Step 2
Suppliers Customer (send-to)
Ref. First NF
Nota Fiscal W/ ref. Send-to
Receives Goods & documents
64
3rd Party Sales

The Solution
SAP configuration
Specifics for Brazil; Sales order type, item category and billing document (one
for each step of the process); New incompletion proc.for Brazilian mandatory fie
lds; New Pricing procedure specific for BR 3rd.party and Account keys assigned t
o new condition types; Legal Text for ICMS and IPI;
SAP Script development for Nota Fiscal MASTERSAF, Aspen-Sati, SYNCRO [Fiscal Boo
ks]

Special development

Bolt-on
Implementation
C
E
This scenario has a medium effort to be implemented. There are some points of at
tention to consider:
Distinct configurations to support the first and second Nota Fiscal, its take more
time to prototype and test; The scripts are important to drive the user in order
to choose the correct documents in the right sequence; Knowledge of the BBRAUN
fiscal area
65
Agenda Consignment Sales

66
Consignment Sales
Inquiry & Quotation
Execute Work
Scenario : Consignment Sales This scenario describes the main flow of activities
to be performed in Brazil when you need to send products in consignment to the
customer without bill him, but to support the Brazilian legal requirements, you
need to send a Nota Fiscal to follow goods. When customer consumes your products,
you have to invoice him, sending another Nota Fiscal. In the first Nota Fiscal, we
have to bring the taxes but we will not charge the customer, and then in the se
cond Nota Fiscal, it will have the same taxes
67
Consignment Sales
Customer (payer)
Customer request Customer Use Customer Region informs consumed Pricing Procedure
for BR quantity
New Sales order type (KBB)
Receives Accountings only for ICMS with ref. goods Step 1 No account receivable
Nota Fiscal Nota Fiscal just to follow goods
Step
Account receivable and IPI Taxes calculation (ICMS statistic, IPI, PIS,COFINS) T
axes calculation (ICMS statistic, IPI, PIS,COFINS) Fiscal Texts for ICMS & IPI 1
: Fill-up Fiscal Texts for ICMS & IPI
Create Sales order ref. Bill.doc. (KEB)
Plan Taxes calculation (ICMS, IPI Shipme Taxes calculation (ICMS, IPI statistic)
nts & statistic) Book Fiscal texts for ICMS, IPI New Sales order type (KEB) Fis
cal Texts for ICMS &Transpo IPI rt Use Customer Region Confirm To Transfer Goods
Post Pricing procedure for BR Create Create qty Pricing Procedure for BR& Produ
ction fromConsignment production Delivery Goods Sales order Issue Sales order Pu
rchasing Consignment Issue to Warehouse (LFB) Issue (KBB) Consign. Special Stock
Consignment Fill-up
Create Billing Doc. (FCR) Posting G/L
Generate Nota Fiscal Bolt-on Fiscal Books
Create Symbolic Delivery
Post Goods Issue from consig. stock
Create Billing Doc. (FC)
Create Nota Fiscal Bolt-on
Step 2: Issue
Posting G/L
Posting G/L
Account Receivable
Fiscal Books
Suppliers
68
Consignment Sales
Customer (payer)
Customer request Return customer Nota Fiscal & goods Receives goods Plan Shipme
nts & Specific Sales Order type (KAB) and Book item category Transpo for Brazil
rt Use same Pricing Procedure for BR Confirm Create Post Consignment Fill-up qty
Delivery Goods Sales order (LFB) NF number Issue (Legal Inform Customer Nota Fi
scal just to follow goods
Create Sales order (KBB)
Create Generate Billing Nota Its not necessary Doc. Fiscal to issue another NF (F
CR) (N1)
Books) w/o reference in SAP
Step 1: Fill-up
Consign. to a Usually created with reference Special billing Stock
to receive goods. Bolt-on The customer NF Posting Fiscal will G/L support the Bo
oks process
Create Sales order ref. Bill.doc. (KAB) Register customer Nota Fiscal ref: bill.
doc. Confirm Purchase order
Create Delivery (LRB)
Post Goods Receipt from consig. stock
Create Billing Doc. (REB+N4) Bolt-on
Step 3: Pick-up
Specific Register Reason (REB)
Billing document Consign.
Special Stock
Posting G/L
Fiscal Books
Use same Pricing Procedure for BR Consignment Fill-up
Suppliers
69
Consignment Sales
The Solution
SAP configuration
Specifics for Brazil; Sales order type, item category and billing document (one
for each step of the process); New incompletion proc.for Brazilian mandatory fie
lds; New Pricing procedure specific for BR 3rd.party and Account keys assigned t
o new condition types; Legal Text for ICMS and IPI;
SAP Script development for Nota Fiscal MASTERSAF, ASPEN-SATI , SYNCRO [Fiscal Bo
oks]

Special development

Bolt-on
Implementation
C
E
This scenario has a medium effort to be implemented. There are some points of at
tention to consider:
Distinct configurations to support the first and second Nota Fiscal, its take more
time to prototype and test; The scripts are important to drive the user in order
to choose the correct documents in the right sequence; Knowledge of the Jabil f
iscal area
70
Agenda Samples and FOC

71
Samples and Free of Charge

Inquiry & Quotation
Execute Work
Scenario : Samples and Free of Charge This scenario describes the main flow of a
ctivities to be performed in Brazil to send some samples or free of charge produ
cts to a customer. Every product must be followed by a Nota Fiscal, even if it i
s free of charge. Samples with less than 5 kg are tax exempt, otherwise they wil
l have ICMS and/or IPI. In cases we have taxes, we need to account them and regi
ster in Legal Books.
72

Customer
Request for Samples
Customer Region (state) Tax Code for Brazil Pricing Procedure for BR Samples Tax
es calculation (ICMS, IPI) Fiscal Texts for ICMS, IPI
Plan Shipme nts & Book Transpo rt Confirm qty Sales order Create Delivery Post G
oods Issue Create Billing Doc. (ZXX)
Nota Fiscal for Samples
Create Sample Order (ZXX)
Generate Nota Fiscal Bolt-on
Tax Code for Brazil Pricing Procedure for BR Samples Suppliers
Posting G/L
Posting G/L
Fiscal Books
Taxes calculation (ICMS, IPI) Fiscal Texts for ICMS, IPI
73

The Solution
SAP configuration
Configuration specific for Brazil; New Sales order type and item category; New
illing document; New Incompletion proc.for Brazilian mandatory fields; New Prici
ng procedure and Account keys assigned to the new condition types; Legal Text fo
r ICMS and IPI; Billing has to account the ICMS and IPI, but not account receiva
ble. SAP Script development for Nota Fiscal
MASTERSAF, ASPEN-SATI , SYNCRO [Fiscal Books]

Special development
Bolt-on
Implementation
C
E
A sample or free of charge process is not difficult to be implemented. There are
some points of attention to consider: Standard pricing procedure for Brazil mus
t be adjusted; Complex SAP Script development for NF; All business variants rele
vant to Brazilian operations must be tested; Knowledge of the BBRAUN fiscal area
to handle correctly the Brazilian requirements in SAP
74
Agenda Customer Returns

75
Customer Returns
Inquiry & Quotation
Execute Work
Scenario : Customer Returns This scenario describes the main flow of activities
to be performed in Brazil when a customer returns the goods for commercial or qu
ality reasons. The difference in Brazil exists only because of the Nota Fiscal t
hat will be used during the process. There are two different process: one with o
wn Nota fiscal that Jabil has to create another incoming nota fiscal and the oth
er with Customers nota fiscal where Jabil has only to inform in incoming Legal Bo
ok.
76
Customer Returns Companys own NF

Reject goods before receiving Return BBRAUN Nota Fiscal & goods
Customer
Specific Sales Order type (ROB) and item category for Brazil Use same Pricing Pr
ocedure for BR Standard Sales Inform Jabil NF number (Legal Receive Books) the g
oods Usually created with reference to to stock a billing
to return Analyse the goods and release or Reject
Create specific Sales Order (ROB) Register Jabil Nota Fiscal ref: bill.doc.
Confirm Qty Order
Post Goods Receipt
Create Billing Doc. (REB) Account Payable (Credit)
Generate Incoming Nota Fiscal (N5) Bolt-on
Register Reason
Posting G/L
Posting G/L
Fiscal Books
Specific Billing document (REB) Suppliers Use same Pricing Procedure for BR Stan
dard Sales
77
Customer Returns Customer NF

Customer
Reject goods before receiving Return customer Nota Fiscal & goods
Specific Sales Order type (REB) and item category for Brazil Use same Pricing Pr
ocedure for BR Standard Sales Inform Customer NF number (Legal Books) w/o refere
nce in SAP Receive Usually created with billing
the goods reference to a to return to stock Analyse the goods and release or Rej
ect
Create specific Sales Order (REB) Register customer Nota Fiscal ref: bill.doc.
Confirm Qty Order
Post Goods Receipt
Create Billing Doc. (REB + N4) Account Payable (Credit)
Its not necessary to issue another NF to receive goods. The customer NF will supp
ort the process.
Bolt-on Register Reason Posting G/L Posting G/L
Specific Billing document (REB) Suppliers Use same Pricing Procedure for BR Stan
dard Sales
Fiscal Books
78
Customer Returns
The Solution
SAP configuration
Configuration specific for Brazil; New Sales order type and item category (cons
der 2 scenarios); Billing document; New incompletion proc.for Brazilian mandator
y fields; Automatic Legal Text for ICMS and IPI and manual texts (if necessary)
SAP Script development for incoming Nota Fiscal (Scenario: Returns w/ BBRAUN NF)
MASTERSAF, Aspen-Sati, SYNCRO [Fiscal Books]
Special development Bolt-on
Implementation
C
E
The returns from the customers process isnt difficult to be implemented. There ar
e some points of attention to consider:
Two different scenarios for Brazil, using specific documents types, will demand
a effort of configuration and testing The scripts are important to drive the use
r in which documents must be used Knowledge of the Jabil fiscal area to understa
nd and fill correctly all the Brazilian legal fields in SAP and how the process
must be handle in SAP
79
Agenda Correction of price or qty

80
Correction of price or quantity

Inquiry & Quotation
Execute Work
Scenario : Correction of price or quantity This scenario describes the main flow
of activities to be performed in Brazil when Jabil makes a mistake related to t
he price or quantity and the customer or the own firm recognize issue and decide
to correct the amounts. For Brazil, the SAP needs to provide a Nota Fiscal (Com
plement NF) to match the legal requirements.
81

Customer
Notifiy NF Error: Qty NF < real price/qty
Specific Sales Order type (DRB) Complement and item category for Brazil Specific
Billing type (L2B) Nota for Brazil Fiscal Manual condition type to inform de di
fference of price Manual condition type to inform de difference of price Inform
BBRAUN NF number (Legal Books) Inform BBRAUN NF number (Legal Books) Usually cre
ated with reference to a billing
Create Billing Doc. (L2B) Inform the Difference (PR00 or Qty) Generate Complemen
t Nota Fiscal (N2) Bolt-on
Create Debit Request Sales Order (DRB)
Inform Original NF Ref.:bill.doc.
Inform order reason
Account Receivable (Debit/ Credit)
Posting G/L
Fiscal Books
Suppliers
82

The Solution
SAP configuration
Configuration specific for Brazil; New Sales order type and item category; New B
illing document; New incompletion proc.for Brazilian mandatory fields; Automatic
Legal Text for ICMS and IPI
Special development
SAP Script development for Nota Fiscal
Bolt-on
MASTERSAF, ASPEN-SATI, SYNCRO [Fiscal Books]
Implementation
C
E
This scenario requires a low effort be implemented. There are some points of att
ention to consider:
Besides the low complexity, this scenario is very important to the day by day fo
r all the companies in Brazil.
83
Customer to Cash
Services; Industrialization; Resales; Sales for consumption; Zona Franca (Res
s and Industrialization; Scrapping; Fixed Assets; Credit Memos;
84

For discussion now:
urns
86
Agenda - Standard Purchasing

87
Standard Purchasing
Inquiry & Quotation
Execute Work
Scenario : Standard Purchasing This scenario describes the main flow of activiti
es to be performed in Brazil from the creation of a purchase requisition for an
item and its release procedure until payment of the item when it is received.
88
Standard Purchasing
Customers
- At
Nota Fiscal Receiving Invoice Verification, inform Nota Fiscal Number, Issuing d
ate, receiving date, total amount, Nota Fiscal Type
- At Goods Receipt, inform Nota Fiscal Number, Issuing date, receiving date
Posting G/L
Posting G/L
Accounts Payable
Fiscal Books
Outline Agreement
Purchase requisition
Request for quotation
Evaluate quotations
Release purchase requisition
Purchase order
Enter order Confirm.
Follow-up on delivery
Goods receipt
Invoice verification Bolt-On
Pricing Schema Tax code
Pricing Schema
Suppliers
Quotation
Tax code - Nota Fiscal Type - Additional data: Material - Additional data: Mater
ial - Tax code Usage, Material Origin, Usage, Material Origin, Create Confirm De
liver Nota Material Category, Material Category, NCM code - PO Number Sales NCM
code
Order order material
Fiscal
89
Standard Purchasing
The Solution
SAP Configuration Pricing Schema with Brazilian taxes (ICMS, IPI); Tax code conf
iguration. Special Development SAPscript for Purchase Order Printing. Bolt-Ons M
ASTERSAF, ASPEN_SATI, SYNCRO.
Implementation
C
E
A standard purchasing order process configuration isnt difficult to be implemente
d. The complexity will be the fiscal variants to be tested and configured. There
are 3 points of attention to consider: pricing schema configuration; SAP Script
development; basic fiscal knowledge of the buyer to understand which tax code s
hould be used.
90
Pricing Procedure
Example of basic Pricing Procedure for Brazil: ZRM0000
Price with ICMS IPI + (((Gross Price (Preo Bruto) Consumption ICMS) Industrializa
tion ICMS) IPI) + Net Price (Preo Lquido) IPI ICMS
- Automatic IPI calculation: Standard; By NCM Code; Exception by material. - Aut
omatic ICMS calculation: Standard; By State; Exception by material.
+
IVA CODE
91
Agenda - Stock Transfer

92
Stock Transfer
Inquiry & Quotation
Execute Work
Scenario : Stock Transfer This scenario describes the main flow of activities to
be performed in Brazil while transferring a material from one plant to another.
93
Stock Transfer - Unplanned

Customers
Posting G/L Fiscal Books
Nota Fiscal Issuing Generate Nota Fiscal to support material transfer from one p
lant to the other (outgoing Nota Fiscal) using a special movement type
Cotia
Goods Issue of Material/ Transfer Nota Fiscal Bolt-On
Fiscal Texts for ICMS and IPI
Nota Fiscal Receiving Receive Nota Fiscal from the other (incoming Nota Fiscal)
using a special movement type
Pirapozinho
Goods Receipt of Material/ Transfer Nota Fiscal Bolt-On
Supplier
Posting G/L
Fiscal Books
94
Stock Transfer - Planned

Customers
PO Type UB Item Category U Pricing Schema Tax code
Goods Receipt of Material/ Transfer Nota Fiscal Bolt-On Fiscal Books
Cotia
Create Transfer Purchase Order
data: Material Usage, Material Origin, Material Category, NCM code Nota Fiscal R
eceiving Receive Nota Fiscal from the other (incoming Nota Fiscal) using a speci
al movement type
- Additional
Pirapozinho
Analyse pending deliveries
Nota Fiscal Issuing Generate Nota Fiscal to support material transfer from one p
lant to the other (outgoing Nota Fiscal) using a special movement type
Goods Issue of Material/ Transfer Nota Fiscal Bolt-On
Supplier
Posting G/L
Fiscal Books
95
Stock Transfer
The Solution
SAP Configuration
Nota Fiscal Association to special movement types; Associate Issuing Plant as a
customer; Create Receiving Plant as a vendor; Tax Code configuration.
Special Development
Adjustments to SAPscript for Outgoing Nota Fiscal form (Nota Fiscal de Transfernc
ia).
Bolt-Ons
MASTERSAF, ASPEN_SATI, SYNCRO.
Implementation
C
E
The process has an standard operation in SAP. The complexity will be the plannin
g and control of the transfers between plants. In case of using business areas s
ome complex ABAP programs should be developed to support the transfers.
96
Agenda - Import
97
Import
Inquiry & Quotation
Execute Work
Scenario : Import This scenario describes the main flow of activities to be perf
ormed in Brazil from the creation of a purchase requisition for an item and its
release procedure until payment of the item when it is received for a material b
ought out of the country. It also shows the integration points of SAP to bolt-on
systems that control the imports.
98
Import
Customers
Nota Fiscal Writer Receiving
Posting
Custom Expenses Invoice Verification
Accounts Posting G/L
The Nota Fiscal issued by G/L the agent to support Payable material transfer fro
m the harbor to the plant Outline should be received manually at the Nota Fiscal
Agreement Writer Transaction
Release purchase requisition Create Downpayment Bolt-On
The Custom Expenses declared by the agent to nationalize the imported materials ar
e received with a Nota Fiscal Accounts Posting Fiscal transaction as in the Invo
ice Verification Payable G/L cost receipt Books a planned (if the cost was plann
ed in the pricing schema in the purchase order) Exchange
rate variation
Fiscal Books
Purchase Order Purchase requisition
Enter order Confirm. Bolt-On
Invoice verification Bolt-On Nota Fiscal Writer Receipt Custom Expenses Invoice
verification Bolt-On
Bolt-On
Nota Fiscal type Company Code
Goods receipt
Bolt-On
Foreign Suppliers- Branch
Schema - Pricing Nota Fiscal Type Receive Create Confirm Deliver code Down- Invo
ice Sales - Vendor number - Tax Tax code order Material payment Order data: Mate
rial - Material information (Quantity, Unit price, CFOP, - Additional PO Number
Agent
ICMS Tax Usage, Material Origin, Situation, IPI Tax Situation, Material Usage, M
aterial Origin, - Planned costs Material Category, NCM code Material Category, N
CM code)
Receive Material Deliver Material Nota Fiscal
Nota Fiscal Custom Expenses
99
Import
The Solution
SAP Configuration
Pricing Schema with import pricing (Import Tax, freights, ).
Special Development
SAPscript for Purchase Order Printing; SAPscript for Incoming Nota Fiscal form (
Nota Fiscal de Entrada).
Bolt-Ons
Bergen, SIGA-EIC (Easy Management) [Import Control]; MASTERSAF, ASPEN_SATI, SYNC
RO [Fiscal Books].
Manual Workaround
Nota Fiscal Writer to receive the materials in stock; Distribution of custom exp
enses.
Implementation
C
E
Its a complex solution because requires the configuration of an import pricing sc
hema, manual Nota Fiscal Writer for the goods receipt and the integration with t
he bolt-on system.
100
Agenda - Subcontracting
101
Subcontracting
Inquiry & Quotation
Execute Work
Scenario : Subcontract This scenario describes the main flow of activities to be
performed in Brazil from the creation of a purchase requisition for an item and
its release procedure until payment of the item when it is received for a mater
ial that was processed outside the plant using components sent by the plant. In
this process, the company sends components to the vendor which processes it and
send back to the company the processed material.
102
At goods receipt the components used in the ubcontracting process are consumed t
o produce the material that was subcontracted
A specific Nota Fiscal is required to support this operation and can be sent by
the vendor in 2
Subcontracting
Nota Fiscal Receiving
- At Invoice Verification, inform Nota Fiscal Number, Issuing Posting Accounts d
ate, receiving date, total G/L Payable amount, Nota Fiscal Type and Posting syst
em Fiscalwill include the line items for Books the symbolic return of the G/L co
mponents used by the vendor
Issuing of Components Customers separated from the Nota Fiscal to bill the (Reme
ssa para service (special transaction to receive it) Beneficiamento)
- AtFiscal goodsto issue the components used in together with the Nota bill the
the subcontracting service (received at invoice verification) process are sent t
o vendor
Fiscal Books
Outline Agreement
Posting G/L
Fiscal Books
Evaluate quotations
Purchase order
Goods Issue of Components
Goods receipt
Invoice verification
Suppliers
Quotation
Bolt-On Type - Pricing Schema - Fiscal Texts for ICMS and IPI - Tax code - Nota
Fiscal Type - Tax code - Amount of each component - Additional data: Material Tax code being sent to subcontracting - Additional data: Material Usage, Materia
l Origin, Create Nota Fiscal Usage, Material Origin, Confirm Deliver Nota Materi
al Category, NCM code - PO Number Sales to receive - PO Number order material Fi
scal Material Category, NCM code Order Components
- Special Movement - Pricing Schema
Bolt-On
Bolt-On
103
Subcontracting
The Solution
SAP Configuration
Pricing Schema with Brazilian taxes (ICMS, IPI); Special Nota Fiscal type to sup
port Subcontracting Nota Fiscal; Special movement type to support Subcontracting
components issue and Subcontracting components return (symbolic); Nota Fiscal A
ssociation to Movement types for Subcontracting; Account association to subcontr
acting movements. SAPscript for Purchase Order Printing; Adjustments to SAPscrip
t for Outgoing Nota Fiscal form (Remessa para Beneficiamento). MASTERSAF, AspenSati, SYNCRO. Price of each component to be sent to subcontracting should be inf
ormed manually.
Special Development

Bolt-Ons

Manual Workaround
Implementation
The complexity of this solution is high due to:

C
E
control the components sent to subcontracting and do the manual movements to adj
ust stock in case of material loss; look for the price of each component to be s
ent to subcontracting and calculate the amount of the material to be sent to inf
orm in the goods issue transaction to generate the Nota Fiscal; match the values
of the components sent to subcontracting in the Symbolic Nota Fiscal of Return
of the Components used in the subcontracting; process definition difference betw
een subcontracting (components <> processed material) and industrialization (com
ponents = processed material).
104
Agenda - Consignment
105
Consignment
Inquiry & Quotation
Execute Work
Scenario : Consignment This scenario describes the main flow of activities to be
performed in Brazil from the creation of a purchase requisition for an item and
its release procedure until payment of the item when it is received for a mater
ial that was received in the plant used a consignment process. In this process,
the material is sent by the vendor without payment and at a certain period (for
example, the end of the month) it is verified the usage of this material and the
vendor invoices the company the quantity used. Replenishments of this stock are
performed during the month to avoid lack of material in stock.
106
Consignment
Customers
- At Invoice Verification, inform Nota Fiscal Number, Issuing - At goods receipt
the materials in date, receiving date, total consignment are received in SAP in
a amount, Nota Fiscal Type and special stock (or accounting control) and a Post
ing Fiscalto the Nota Fiscal the reference Nota Fiscal of Remessa em Consignao G/L
Books received in consignment is generated in SAP (that has all the information
of the Nota Fiscal sent by the vendor)
Goods Receiving of Materials in Consignment (Remessa em Consignao)
Nota Fiscal Receiving Posting Accounts
G/L Payable
Fiscal Books
Outline Agreement
Posting G/L
Fiscal Books
Evaluate quotations
Purchase order
Goods receipt
Follow-up on next deliveries
Invoice verification
Goods receipt
Suppliers
Quotation
Bolt-On - Pricing Schema - Pricing Schema - Special Movement Type - Tax code - T
ax code - Fiscal Texts for ICMS and IPI - Nota Fiscal Type - Additional data: Ma
terial - Additional data: Material - Tax Code - Tax code Usage, Material Origin,
Usage, Material Origin, Create Deliver Material Category, NCM Material code Cat
egory, NCM code Confirm - PO Number - PO Number Sales Material/ order Order Nota
Fiscal
Bolt-On
Bolt-On
Nota Fiscal
Deliver Material (replenishment)
107
Consignment
The Solution
SAP Configuration

Pricing Schema with Brazilian taxes (ICMS, IPI); Special Nota Fiscal type to sup
port Consignment Nota Fiscal; Special movement type to support Consignment recei
pt; Nota Fiscal Association to Movement type for Consignment receipt; Account as
sociation to consignment movement; Special Tax Code configuration for Consignmen
t process. SAPscript for Purchase Order Printing. MASTERSAF, ASPEN_SATI , SYNCRO
. Use of SAP standard reports to gather information about consignment stock in h
and, materials received in consignment and usage of materials.
Special Development

Bolt-Ons Manual Workaround
Implementation
C
E
The process has an standard operation in SAP. The complexity will be the control
of stock in consignment because its required to use some SAP standard reports to
control these stocks.
108
Agenda - Vendor Returns

109
Vendor Returns
Inquiry & Quotation
Execute Work
Scenario : Vendor Returns This scenario describes the main flow of activities to
be performed in Brazil when a material received is rejected by any reason and i
t is necessary to return the goods to the vendor.
110
Vendor Returns
Customers
Return to Vendor Nota Fiscal Create a Credit Memo to the vendor informing Purcha
se Order Number, total amount being returned, materials being returned, amounts
per material being returned, Nota Fiscal Type, Fiscal Texts for ICMS and IPI
Posting G/L
Reverse Accounts Payable
Fiscal Books
Posting G/L
Reject Material
Return Nota Fiscal (Credit Memo)
Goods issue of returned materials
Reopens Purchase Order balance
Bolt-On
Suppliers
Nota Fiscal receipt Receive Returned material
111
Vendor Returns
The Solution
SAP Configuration Pricing Schema with Brazilian taxes (ICMS, IPI); Special Nota
Fiscal type to support Return to Vendor Nota Fiscal; Special movement type to su
pport Return to Vendor issue. Special Development Adjustments to SAPscript for O
utgoing Nota Fiscal form (Vendor Return). Bolt-Ons MASTERSAF, ASPEN-SATI , SYNCR
O.
Implementation
The process has an standard operation in SAP.
C
E
112
Purchase to Pay
Utilities Nota Fiscal (Energy, Phone, Water); Future Delivery on purcha
rd-Party; Complementar Nota Fiscal; Free of Charge (Donations, Samples); Return
of Repairs; Test; Returnable Packaging; Freights; Inventory Write-offs; Purchase
of Services.
113
Reminder of Key Points - Logistics

MASTER DATA:
Material, vendors and customer master data should have the localized fields fill
ed correctly in order to allow localization operation and minimize the fiscal pr
oblems;
CONFIGURATIONS:
Different pricing schemas for several scenarios in Sales and Purchasing (comple
configurations); New SD documents should be created using specific doc. types f
or Brazil; Different Nota Fiscal types to support business processes; New moveme
nt types to support business processes; Different tax codes should be created to
support business process; Upload or input exceptions related to taxes calculati
on (ICMS and IPI rates - exception by material, ICMS and IPI Fiscal Texts, withh
olding taxes - IRRF, INSS, ISS); Extra configuration required in case of using b
olt-on systems.
DEVELOPMENTS:
SAP Script development for the main documents in Logistics (purchase order, sale
s order and picking list); SAP Script development for the Nota Fiscal and high e
ffort to test all the business variants and validate the Nota Fiscal printing (O
utgoing and Incoming); Extra ABAP developments in case of using interfaces of SA
P to other systems.
114
Reminder of Key Points - Logistics

TESTING:
High effort to map and consider all business and fiscal variants that must be us
ed during the test of the scenarios. The validation process should involve the k
ey-users and also the Fiscal Area.
FISCAL KNOWLEDGE:
BBRAUN Fiscal Area participation during the project is essential in order to tra
nsfer their fiscal knowledge, provide information during configuration, validate
the tests and learn how to handle the SAP system; Basic fiscal knowledge of the
buyers and the sales team to understand all Brazilian legal fields and their co
rrect application in SAP documents affected by localization (sales orders, purch
ase orders, goods movements, Nota Fiscal).
115


ion data
116

Main ones affecting almost all goods movements are:
ICMS - Material Circulation tax IPI - Manufacturing tax ISS - Services tax PIS Social Integration COFINS - Contribution for social funds IRRF - Withholding ta
117
Material
NCM Code Brazilian naming of goods CFOP Category the type of operation Materi
Destination Resale, Consumption & Asset Material Origin (domestic / imported) Pr
oduced in-house or not Taxes Classification (ICMS, IPI/ISS)
Vendor
Legal Information (tax code i.e. CNPJ) Situao Tributria IPI and ICMS Withholding ca
tegory indicator
Customer
Legal Information (tax code ie. CNPJ, Insc.Estadual) Text code (texts are printe
d in the Nota Fiscal) Tax Classification (Taxable, Zona Franca) CFOP Category
118

For discussion now:
rge Customer Returns with customer Nota Fiscal Customer Returns with BBRAUN Nota
Fiscal Correction of prices or quantity
119

For discussion now:
urns
120
Finance Integration Scenarios
Agenda - Product Costing

122
Scenario: Product Costing

Accounts Payables Closure Accounts Receivables Closure Inventory Adjustments Pro
duct Costing General Ledger Closure Fiscal Books Closure Reporting
Actual Cost Method is mandatory in Brazil for legal requirements. It requires sp
ecific configurations and a significant amount of testing. SAP developed specifi
c programs that have to be executed at every period end. The solution was part o
f Localization Brazil but now, it is part of SAP standard through the Material Led
ger tool. An additional feature is the inventory control in 3 currencies
123
Description of Scenario Std Cost

Customer
Production Order
Finished Product Cost Center Expenses
AMBEV CBB Entidade Legal rea de Negcio rea de Negcio ITB Filial/Planta ITB
Production Order
Semi-finished Product
Filial/Planta Paulnea
Spending Variance (c.c. balance)
Production Order
Planned Rates (std costing structure)
Price Variance Raw Material
124
Description of Scenario Std Cost

Customer
Production Order
Finished Product Cost Center Expenses
Production Order
Production Order
P&L Price Variance Raw Material
125
Description of Scenario Actual Cost

Cost Center Expenses
Customer
Production Order
Finished Product
Production Order
Production Order
126

Customer
Production Order
Finished Product
Production Order
Production Order
127

Customer
Production Order
Finished Product
Production Order
WIP Inventory
Production Order
Planned Rates (std costing structure) Price Variance Raw Material
128

Customer
Production Order
(COGS)
Finished Product
Expenses
Production Order
Semi-finished Product Planned Rates
Production Order
CC. Balance
129
Product Costing
All goods movements within a period are valuated preliminarily at the standard p
rice. At the same time, all price and exchange rate differences for the material
are collected in the material ledger. At the period end, the periodic unit pric
e (actual price) is calculated based on each materials actual costs. The periodic
unit price is used to revaluate the inventory at period close. Actual costing de
termines the portion of the variance debited at the nexthighest level using mate
rial consumption. With the actual BOM, variances can be rolled up over multiple
production levels to the finished product and COGS (if sold). The revaluation is
automatic reversed in next period and it is input back as "price difference". I
t will only definitely revaluate the inventory after the next standard cost calc
ulation, which will probably take a good portion of the price variance.
130
Product Costing
The Solution
Material Ledger activation Actual Costing functionality activation SAP Configura
tion Automatic Postings Movement Type Classification Special Correction Note App
lication Variance Adjustments Development for WIP inventory Abap Reporting (opti
onal)
Implementation
Some difficulty to understand the concept ; High effort (resources and time) ;
C
E
131
Detail analisys
Ensure correct costing in materials movement Period End Closing
132
Price Control
Standard
Raw Material Package Semi-Finished Product Finished Product
All material movements are valuated at standard price and at period end, they ar
e revaluated at moving average price.
Moving Average
All the remaining materials consumed at cost center level, not in production ord
ers.
The moving average price is calculated at the moment of the entrance (Logistics
Invoice Verification ). The consunption is valuated by the moving average price
at the moment of each consumption.
133
Example
Date: 01/05 Date: 02/05 Date: 03/05 Date: 04/05
Logistics Invoice Verification of Soya oil: Quant. = 1.000 Kg Amount = R$ 1.000
Soya oil consumption in Production of I / Mono-di: 900 KG
Complementary cost (ex. Freight) Of soya oil: Quant. = 0 Kg Amount = R$ 5.000
Soya oil consumption in Production of Mono-di: 100 KG
Inventory Movement of Soya Oil Soya oil Init Bal.: 0 Entrance: 1.000 Kg End Bal:
1.000 Kg Soya oil Init Bal: 1.000 Kg Sales: 900 Kg End Bal: 100 Kg Soya oil Ini
t Bal: 100 Kg End Bal: 100 Kg Soya oil Init Bal: 100 Kg Sales: 100 Kg End Bal: 0
Kg
134
Example
I / Mono-di
Glicerine
Unit Price R$ 1,00
Soya oil
Soya oil Value: R$ 900,00 Quantity: 900 Kg
135
Example
Mono-di
Glicerine
Unit Price R$ 51,00
Soya oil
Soya oil Value: R$ 5.100,00 Quantity: 100 Kg
136
Transfer between plants

SAP R/3
Transfer at standard price (during month)
Plant A
Plant B
137
Transfer between plants

SAP R/3
Transfer at standard price (during month)
Plant A
Plant B
Material ledger price variance update (period end)
138
Example of purchase with PRD

139
Example of goods issue to a process order

140
Month End Closing Steps

The shaded steps refers to financial postings .
Actual Activity Split
Calculate Actual Activity Prices
Revaluation Process Order
Calculate STD WIP amount Material Selection Single Level Costing
Calculate Variances
Order Settlement Single Level Costing Multi Level Costing
Material Sequence Multi Level Costing
Adjust Actual WIP (GAP)
Post Periodic Unit Price (inventory reval)
COGS Revaluation
141

The shaded steps refers to financial postings .
Calculate Variances
Order Settlement Single Level Costing Post Periodic Unit Price Multi Level Costi
ng and calculate plus post Actual WIP Inventory and COGS Revaluation
Solution available in November 2002
142

Calculate Variances
COGS Revaluation
143
KSS2 Actual Activity Split

The cost center XXX produces 2 activities (labour and machine). The building renti
ng actual expense is posted to the cost center and then split accross the activi
es labor and machine.
144

Calculate Variances
COGS Revaluation
145
KSII Actual Price Calculation

Actual activity rate = Actual expense posted against the activity Actual activit
y utilization
146

Calculate Variances
COGS Revaluation
147
Cost center cost report - before P.O revaluation

Utilization and Spending variance
148

Calculate Variances
COGS Revaluation
149
Cost center cost report - after P.O revaluation

No more utilization and Spending variance
150

Calculate Variances
COGS Revaluation
151
CKM3 Before Order Settlement

Material: AM0657050AG
152

Calculate Variances
COGS Revaluation
153
CO88 Order Settlement

154
CKM3 After order settlement

The variance is posted as a price difference in the ML. This means it will be po
sted back to inventory when running the actual price revaluation
155
CKMLCP Cockpit Actual Costing

156

Calculate Variances
COGS Revaluation
157
CKMLCP Selection of materials

158

Calculate Variances
COGS Revaluation
159
CKMLCP Determine sequence

160

Calculate Variances
COGS Revaluation
161
CKMLCP Single-level price determination

162

Calculate Variances
COGS Revaluation
163
CKMLCP Multi-level price determination

164
CKMLCP - Check all calculations (single and multi-level)

165
CKM3 after multi-level price determination

The finished products receive the price difference from the lower levels accordi
ng to the proportionality of the lower level consumption
Double Click
166

Double Click
167

640,000 X 0.028 = 0.18 100,017,373
168
Reminder of Key Points

Logistics Invoice Verification required Impacts every logistic scenario Price Co
ntrol issues
Raw material price control : Moving Average or Standard
WIP Inventory variance allocation when MTO
169
Financial Accounting Scenarios
Finance Specific Scenarios

For discussion now:
Accounts Payable and Payments Accounts Receivable Collections Legal Books and Fi
les Preparation
171
Agenda Acc.Payable and Payments

172
Vendor Master Records

Vendor Master Records:
Vendor Master maintenance follows standard procedures. However, for Brazil, you
must maintain the following fields: Partner bank type in order to enter the vend
ors bank into the open item. Bank address When paying in general individually, us
e the indicator individual payment. For vendor that send boletos, the maintenanc
e of payment terms with payment block.
173
Boleto Forms
174
Bank Transfer
Bank Transfer:
The following Brazilian-specific print program must be entered in the country de
pendent customizing of all payment methods that are used to create bank transfer
s. As part of localization, payment methods U and N are already customizing this
way: RFFOBR_U This program prints a payment list (Bordero) or a DME (Data Mediu
m exchange/Arquivo Remessa) file containing all payment information. The followi
ng Brazilian-specific payment transfer must be customized per company code.
J_1B_BORDERO: Payment list J_1B_DME: accompanying sheet
175
Bank File Formats

Bank File Formats:
Brazilian localization supports the following bank file formats for DME: SISPAG
Ita PFEB Bradesco FEBRABAN/CNAB
176
Bank File Formats

Payment Forms
The Brazilian localization supports all Brazilian-specific payment forms summari
zed in the table below.
For each of the both payment forms 02 and 10, a respective payment method has to
be defined country dependent as a copy of the released payment method U (bank t
ransfer) with a corresponding entry (02 or 10, respectively) in the field key in
code line.
For payments without boleto, that is, for payment forms 01, 02, 03 and 10, any e
ntry in the field Key in code line overwrites the automatic selection. However,
if the field barcode number is entered into the open item, the resulting Payment
form is 30 or 31 pending on the above conditions and the field key in code line
is of no relevance. House bank and partner bank are identified by the first thr
ee digits of the entered barcode number.
177
SPB - Brazilian Payment System

SPB
The law that controls the new Brazilian Payment System is Law 10.214, March 27th
of 2001. Payment systems is a set of rules, procedures, instruments and operati
ng systems integrated used to transfer funds from payer to receiver. The objecti
ve is to reduce the credit risk and liquidity. The payment system will make tran
sfers and payments between economic agencies safer and efficient, with benefits
that will be reflected in the companies and people and in the perception outside
of Brazil decreasing the risk for Brazil. Nowadays customers transfer their res
ources using checks or DOCs. By this way, the money is just available after the
traditional clearing that lasts at least one day. Starting on April, 22nd of 200
2, the new Brazilian Payment System allows the customers to transfer the money,
in the same day, for payments and other purposes in a safer way and it will not
take so long as the tradition clearing system.
178

TED
The new SPB offers a new transfer option from one bank to the other named as Tra
nsferncia Eletrnica Disponvel TED. Through TED the amount will be credited in the b
ank account and it will be available as soon as the bank receives the transfer m
essage. Transfer options: STR huge amount interbanks Clearing / Payments big / m
edium amount via electronic payments Compe checks, DOCs below R$5.000,00 in reta
il
179

Definitions :
STR Sistema de Transferncia de Reservas The Transfer of Funds System manages the
funds transfer between financial institutions (STR) in real time, managed by the
Central Bank of Brazil. The system will check the bank fund account balance and
rejects the debits greater than the bank account balance. The customer can tran
sfer funds from his own bank account to other bank using STR. COMPE - Compensao de
cheques e outros Papis This system is responsible for check clearing and other p
apers, it is managed by Banco do Brasil. The objective is to remove from Compe t
he critical payments or high value payments, as well as other payments that can
be done by STR. CIP Cmara Interbancria de Pagamentos The payment clearing is manag
ed by the Banks for values higher than R$5.000,00 and the liquidation is done in
the end of the day. The objective of Clearing House is to liquidate payments in
a faster way, secure and cheaper than traditional liquidation system.
180
Accounts Payable and Payments

Inquiry & Quotation
Execute Work
Finance
Scenario : Accounts Payable and Payments This scenario describes the activities
flow regarding documents registering in Accounts Payable through the utilization
of bar code reader device and also payments execution with files generation and
exchange with banks.
181

Customer
Purchase/ Goods Mov.Op.
document posting without typing payment confirmation of payments
-Automatic
-Automatic
Pass boleto onto bar code reader
Register Payable in SAP
Carry out payment routine
Generate file to banks w/ posting
Integrate confirmation file
Bank / Interchange
-Automatic
file generation
Payments
Generate payment confirmation file
Supplier
Generate boleto
182

-Acquire
appropriate bar code device and extensive testing
Customer
-Configuration
bank has its own file layout (Ita, Bradesco and Interchange) and extensive testin
g involving banks folks and testing environment
-Configuration
-Each
Purchase/ Goods Mov. Op.
Pass boleto onto bar code reader
Register Payable in SAP
Carry out payment routine
Generate file to banks w/ posting
-Development
is required
Integrate confirmation file
Bank / Interchange
-Each
bank has its own file layout and extensive testing involving banks folks at its s
ystem environment for testing is needed is required
Payments
Generate payment confirmation file
-Configuration
Supplier
Generate boleto
-Development
183
Accounts Payable and Payment

The Solution:
SAP configuration at payment program transactions Special ABAP development regar
ding files generation to be exchanged with bank
The objective of this solution is address automatic payment through bank exchang
e files
C The complexity of this solution addresses:
E
extensive configuration required by payment program extensive testing with each
one of the banks involved. contact banks folks to ask them to create system test
ing environment to start testing files exchange ASAP
184

Bar code reader device utilization Complex payment program configuration ABAP de
velopment is needed in order to generate files Extensive testing with banks invo
lved since the beginning of the project. High level of interaction with banks is
needed Electronic/Manual Extracts
185
Agenda Acc. Receivable Collections

Overview Description of Scenario Overview Business Process Flow Main Localistion
Requirements Solutions SAP configuration Special Development Bolt Ons Manual wo
rkaround Summary Reminder of Key Points
186
Accounts Receivable Collections

Duplicata:
An essential element of accounts receivable in Brazil is the concept of duplicat
a. For each debit liability the vendor collects the expected money with the acti
ve help of its house banks. For this purpose, information on the liability must
be passed to the respective bank. This information is called duplicata. The loca
lization Brazil supports the automatic generation and processing of duplicatas i
n local currency. The duplicata information is based on the related open items a
nd is extended through additional information such as the instruction key. The i
nformation returned by the bank can be electronically processed (Arquivo retorno
).
187

Customer Master Data:
Customer master maintenance follows standard procedures. However, for Brazil, yo
u must maintain the following fields: Interest calculation indicator This indica
tor is used to charge interest payment for overdue items. Individual payment Thi
s must be entered because a duplicata is created for each open item.
188

Bill of Exchange Payment Request:
Duplicata creation is represented by a standard R/3 payment method, namely the c
reation of a bill of exchange payment request. As for any other R/3 payment meth
od, specifications have to be customized country and company code dependent. Whe
n running the payment program for the duplicata creation, one bill of exchange p
ayment request is created for each open item. This BOE is only a statistical doc
ument in the context of the Brazilian localization. It has two main function: It
labels the related item as being processed, meaning it indicates that the dupli
cata has been created. Thus, no second duplicata is created for this specific it
em when running the payment program again. It carries the information on the sel
ected bank.
189

Print Programs and Forms for Payment Transfer Media
The following Brazilian-specific print program must be entered in the country de
pendent customizing of all payment methods that are used to create duplicatas. A
s part of localization, payment methods A is already customizing this way: RFFOB
R_A This program prints a duplicata list or a DME (Data Medium exchange/Arquivo
Remessa) file containing all duplicata information. The following Brazilian-spec
ific payment transfer media must be customized per company code. J_1B_DUPLICATA:
Duplicata list
190

Data Medium Exchange (Arquivo Remessa)
Bank File Format Cobrana Ita Cobrana Bradesco Febraban/Cnab
Instruction Code
The instruction code specifies further processing of the duplicata. Basic instru
ction codes are part of the localization Brazil. However, if required, additiona
l instruction codes may be added though customizing. Instruction Code 1 = Codigo
de ocorrencia Instruction Code 2/3 = Instrues de cobrana The instruction code can
be entered into each individual item, when creating a duplicata the entered inst
ruction code is transported into the duplicata. If there is no instruction code
entry in the open item, instruction code defaults (e.g. REMESSA) are set either
through the customer master or the respective house bank.
191

SAP Query
A report on issued duplicatas in the form of a SAP Query is part of the localiza
tion for Brazil. This specific SAP Query is called DU. It is linked to the funct
ional area / SAPQUERY/J1B1 and the user group /SAPQUERY/XX. This report covers t
he legal requirements for the Registro de Duplicatas a receber such as reporting d
ue date, duplicata issue date, gross amount, customer name/street and amount. Th
e list is sorted by due date. You can select via customer, company code, due dat
e, issue date and document number.
192

Inquiry & Quotation
Execute Work
Finance
Scenario : Accounts Receivable Collections This scenario describes the activitie
s flow regarding the execution of accounts receivable collections with files gen
eration and exchange with banks (Ita and Bradesco) and Interchange.
193

Customer
Sales Operations Receive boleto Proceed boleto payment
-Automatic
payment confirmation and posting in accounting
Register Receivables in SAP
Carry out collection routine
Print boleto
Generate file to banks w/o posting
Integrate collections file w/ payment postings
Bank / Interchange
-Automatic
file
Collections
generation
Generate collections file w/ clients payments
Collections Updated
Supplier
194

Customer
Sapscript development form
Sales Operations
Receive boleto
Proceed boleto payment
Register Receivables in SAP
Carry out collection routine
Print boleto
Generate file to banks w/o posting
Integrate collections file w/ payment postings
bank has its own file layout Bank / Interchange and extensive testing involving
banks folks at its system environment for testing is needed
-Development -Configuration
-Each
Collections
Generate collections file w/ clients payments
-Each
Collections Updated
is required
Supplier
bank has its own file layout Configuration and extensive testing involving banks
folks and testing environment is required
-Development
195
Account Receivable - Specific Scenarios

Bank issues the BOLETO
Accounts posting Accounts Receivable
Bordero
Payment program Nota Fiscal
Duplicatas file
Customer
Boleto
Bank
196

Company issues the BOLETO
Accounts posting Accounts Receivable
Bordero
Payment program Nota Fiscal
Duplicatas file
Boleto
Customer
Bank
197

Return file
Import R/3 (Treasury) Bank Return file
Automatic posting
Posting error log
198

The Solution:
SAP configuration at payment program transactions for collections (as the same a
s payments) Special ABAP development regarding files generation that will exchan
ged with bank and boleto form
The objective of this solution is address automatic collection through bank exch
ange files
C
E
The complexity of this solution addresses basically to:
extensive configuration required by payment program extensive testing with each
one of the banks involved. Its important to contact banks folks since the beginni
ng of the project in order to ask them to create system testing environment to s
tart testing files exchange ASAP
199

Complex payment program configuration for collections ABAP development is needed
in order to generate files and boleto form Extensive testing with banks folks inv
olved since the beginning of the project. High level of interaction with banks i
s needed Electronic/Manual Extracts
200
Agenda Legal Books and Files Prep

Overview Description of Scenario Overview Business Process Flow Main Localistion
Requirements Solutions SAP configuration Special Development Bolt Ons Manual wo
rkaround Summary Reminder of Key Points
201
Legal Books and Files Preparation

Inquiry & Quotation
Execute Work
Finance
Scenario : Legal Books and Files Preparation This scenario describes the activit
ies necessaries to address Brazilian Legal and Tax requirements through legal bo
oks and files preparation. Its important to mention that most of sales, purchases
and goods movement have tax impact in the books and files and based on these da
ta repositories, taxes are calculated to be paid. There are three taxes levels:
country, state and city levels.
202

Customer
Receive and book Nota Fiscal
Configuration of all fiscal variations
Extensive testing of all fiscal variations of sales and purchases operations
Register Nota Fiscal at tax tables within SAP Generate Legal Books Bolt-on Generat
e Legal Files Calculate tax to be paid Prepare Guias de Recolhim. Accounts Payable
Accounting books and reports
Sales Operations
Send Nota Fiscal
Purchase / Goods Mov. Operations
Bolt-on implementation in parallel with SAP
Authorities
development of Interface between SAP and Bolt-on (e.g. Mastersaf, Syncro, AspenSati)
Send Nota Fiscal
- ABAP
Send files as required
Display books as required
Manual workaround for Fiscal and Accounting issues not treated even by Bolt-on
Supplier
files and Books generation through Bolt-on
-Legal
203

The Solution:
Tax configuration with high level of complexity: IPI
for purchases operations IPI is calculated based on:
C

E
NCM code identified at material master Tax code defined at purchase order Its boo
ked in accounting and Legal Books at invoice verification posting Tax calculated
only at manufactured goods Tax accounts by plant NCM code identified at materia
l master Tax code defined at sales order Its booked in accounting and Legal Books
at billing document posting Necessity of releasing billing documents which acco
unting documents werent booked Tax calculated only at manufactured goods Tax acco
unts by plant
for sales operations IPI is calculated based on:

ICMS
for purchases ICMS is calculated based on:

Jurisdiction Code defined at vendor master data (to define rate) Jurisdiction Co
de define at plant address data (to define rate) Tax code defined at purchase or
der Its booked in accounting and Legal Books at invoice verification posting Tax
calculated based on goods movement and services (e.g. freight) Tax accounts by p
lant
204

The Solution:
for sales ICMS is calculated based on:

Jurisdiction Code defined at customer master data (to define rate) Jurisdiction
Code define at plant address data (to define rate) tax code defined at purchase
order Its booked in accounting and Legal Books at billing document posting Necess
ity of releasing billing documents which accounting documents werent booked Tax c
alculated based on goods movement and services (e.g. freight)
Tax accounts by plant
Withholding Tax (IRRF and ISS on services purchases) WT field in Vendor Master i
dentify if WT should be calculated or not WT can be booked in two different mome
nts: during invoice verification / FI invoice posting or Invoice payment / Down
Payment Services are classified by fiscal codes (e.g. code 1708, 3205). Standard
Sap report by code is developed to reach this necessity. ISS for services sales
ISS is calculated based on: ISS tax code defined at sales order Its booked in ac
counting and Legal Books at billing document posting Necessity of releasing bill
ing documents which accounting documents werent booked
205

The Solution:
Third-party software bolt-on for legal books below: Mod-1 Registro de Entradas (
List of incoming documents) Mod-2 Registro de Sadas (List of outgoing documents)
Mod-3 Controle de produo (Overview of production and inventory) Mod-7 Registro de
Inventrio (Physical of inventory overview) Mod-8 Registro de Apurao do IPI (Directo
ry for calculating IPI tax) Mod-9 Registro de Apurao do ICMS (Directory for calcul
ating ICMS tax) Listagem Operaes Interestaduais (List of interestate goods movemen
ts) Livro Dirio (with historical description) Livro Razo (with historical descript
ion) Razo Auxiliar de Fornecedores (Statement for Vendor accounts) Razo Auxiliar d
e Clientes (Statement for Customers accounts) Registro de Duplicatas a Receber (
List of open items to receive) GIA Guia de Informao e Apurao (Tax payment form)
206

The Solution:
Third-party software bolt-on for legal files below: Arquivo Magntico Convnio ICMS
no. 57/95 (file as per law ICMS) DIRF IN 86 (Master data, documents files and ta
bles) Manual workaround LALUR (Taxable Income Control Register) DOAR (Source and
Funds) Mutaes do Patrimonio Liquido (Equity Moviment) Lucros ou Prejuzos Acumulado
s (Retained Earnings Demonstration) PIS (Employees Profit Participation Program)
and COFINS (Tax for Social Security Financing) calculation IR (Income Tax): Pro
vision, normal calculation, and calculation with indirect benefits
207

The Solution:
C
E
Assets Its important to mention that assets control in Brazil is treated through
SAP standard functionality however there is an specific topic called CIAP. It ad
dresses to the ICMS recovering of assets purchased for utilization at productive
process. It has legal requirements represented by specific legal book and rules
for its calculation. The main activities necessaries to implement CIAP control a
re: extensive configuration ABAP development for reports patches aplication into
system environment
208

The complexity of this solution addresses basically to:
extensive configuration and testing of all legal requirements and fiscal variant
s at SAP definition of procedures for legal issues treatment after SAP implement
ation Definition of procedures about how to handle manual workarounds Develop AB
AP program for interface between SAP and Legal Books bolt-on Patches application
for CIAP control for assets besides configuration and ABAP development
209

Legal Books bolt-on implementation doesnt avoid extensive configuration and testi
ng at SAP, because SAP is bolt-on information source Extensive configuration and
testing of all legal variants in SAP Bolt-on implementation in parallel with SA
P and ABAP development to integrate both SAP and bolt-on Necessity to define pro
cedures to handle manual workarounds for cases not treated by SAP or bolt-on Pat
ches application for CIAP
210
Questions
211

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Output & Deliverables

Where do all these requirements come from?

Legal and Tax Requirements for Brazil

Hierarchy Company Code

ICMS is a state tax and depends on:

PIS and COFINS:

INSS is a tax related to natural person and depends on:

ISS is a city tax and depends on:

Master Data Records Material

Material Master Screen

Material Master Screen

Master Data Records Vendor

Vendor Master Screen

Master Data Records - Customer

Customer Master Screen

Nota Fiscal - Sales

Nota Fiscal - Symbolic Return

Indicative Map of Interfaces (Bolt-ons)

The Scenarios & Presentation Approach

Customer to Cash Scenarios

Purchase to Pay Scenarios

Finance Integration Scenarios

Finance Specific Scenarios

A Generic Business Process Model

<Overview Business Process Flow>

<The Scenario Solution>

Brazilian Localization Review

Brazilian Localization Review

Master Data Records

Customer to Cash Scenarios

Customer to Cash Scenarios

Agenda Standard Sales

Agenda Export Orders

Agenda 3rd Party Sales

3rd Party Sales

3rd Party Sales

3rd Party Sales

Agenda Consignment Sales

Agenda Samples and FOC

Samples and Free of Charge

Samples and Free of Charge

Samples and Free of Charge

Agenda Customer Returns

Customer Returns Companys own NF

Customer Returns Customer NF

Agenda Correction of price or qty

Correction of price or quantity

Correction of price or quantity

Correction of price or quantity

Purchase to Pay Scenarios

Purchase to Pay Scenarios

Agenda - Standard Purchasing

Agenda - Stock Transfer

Stock Transfer - Unplanned

Stock Transfer - Planned

Agenda - Vendor Returns

Reminder of Key Points - Logistics

Reminder of Key Points - Logistics

Brazilian Localization Review

Brazilian Localization Review

Customer to Cash Scenarios

Purchase to Pay Scenarios

Finance Integration Scenarios