FI - Finance

The ]po[ Finance Module implements a financial system specifically designed for profit and loss calculation of projects in real-time with specific emphasis on [|controlling] processes and easy reporting using the ]po[ data-warehouse and other analytical functions.

Financial Objects

The financial modules defines a number of different types of financial objects, that are ordered in a hierarchy:

• Financial Item:
  This is the base type of all financial items. It defines important files including amount, currency, cost_type, customer_id and provider_id.
  
• Financial Document:
  The financial document represents Customer Invoices, Customer Quotes, Provider Bills, Provider Purchase Orders and several other exotic documents. All of these financial documents consist of a "header" with an ID, a customer and a provider, plus a number of "lines" each with a description, unit of measure, number of units and price per unit.
• Expense Item:
  Expense items represent individual travel cost elements including airfare, hotel costs or similar.
• Expense Bundles:
  Expense bundles represent a stack of "bundle" of expense items. Expense bundles are usually associated with a package_acs_workflow workflow that manages the expense approval process.
• [Repeating Costs]:
  Repeating costs are used to represent recurring expenses including employee salaries etc.
  

Financial Items in a Matrix Structure

Every financial item can be associated with four other objects:

• A project:
  Associating a cost items with a project allows to calculate the profit & loss per project.
  Employee salaries and several other financial items representing structural costs don't need to be associated with a project.
• A Cost Center, Profit Center or Department:
  This association allows to calculate profit and loss per profit center or department.
• A Customer Company:
  The customer is the company that pays for the financial document.
• A Provider Company:
  The provider will receive the payment of the financial document.
  

The following figure explains the association of financial documents with projects and departments/cost centers:

PSA Accounting Integration

For PSA (Professional Services Automation, i.e. small or medium independent service companies) the ]po[ financial system is designed to work together with an accounting back-end system. The accounting system can be the SAP FI system of a large enterprise or a small country-specific accounting package in the case of a smaller organization. I]project-open[ is normally used for the creation of invoices to customers and bills to providers

]project-open[

• Creates Customer Invoices and Provider Bills,
• captures travel expenses and
  
• captures time sheet expenses.

Based on this information, ]po[ will:

• Calculate Profit & Loss per project, customer and cost center and
  
• export financial items to the accounting back-end using one of the predefined financial reports.
  

The Accounting Back-End

• Import customer invoices and provider bills from ]project-open[ and
  
• generate the reports required by the tax authorities including tax declarations, income statement, balance etc.
  

Corporate Accounting Integration

In a corporate setting, the accounting integration usually works the other way round. In these settings, ]project-open[ usually manages the finance of a project-oriented department, while the rest of the corporation uses SAP FI or other corporate accounting solutions in order to handle invoicing, purchasing and other financial functions.

In these environments ]po[ will:

• Import financial items (external project costs) from the accounting system and
• associate these financial items with ]po[ projects.
  

This way, project managers gain access to financial information that were difficult to access previously.

"Group" or Multi-Company Accounting Integration

]project-open[ represents in some settings the finance of a group of companies. For instance a software company might have a central office producing software and several sales and support offices in different countries with staff servicing local customers.

In this case ]po[ will represent an organization with multiple accounting systems. Please see the our Multi-Company Finance HowTo for details on how to manages these cases.

Financial Functionality

The financial functionality of ]project-open[ is implemented in the following packages:

• Cost Core:
  This "core" implements financial items and cost centers.
• Invoices & Financial Documents:
  Implements the financial document type representing invoice, bills, quotes etc.
• Finance Payments:
  Implements payments and the accounts payable process.
  
• Expenses:
  Implements expense management and travel costs.
• Expenses Workflow:
  Implements an approval workflow for expense management.
  
• Profit Center Permissions:
  Implements special permissions per cost centers required to keep profit centers from interfering with other profit centers.
• [Time & Material Invoicing]:
  Implements a specific invoicing process for service companies billing time and material based projects to customers.
• [Translation Freelance Invoicing]:
  Implements a specific invoicing process for translation providers.
• [Translation Invoicing]:
  Implements a specific invoicing process for translation agencies and other translation related organizations.
• Financial Reports:
  Defines a number of standard financial reports.
• Data-Warehouse:
  Defines several data-warehouse cubes, some of them related to finance.
  

References

Related Tutorials

• Finance User Guide