[0:01]This conference will now be recorded. Okay, so uh thank you all for joining this uh demo session or webinar, whatever you want to call it as. Uh as I uh I think you already know the agenda of this particular call is helping you understand what exactly SAP RA R is and then uh what you can expect out of the course that we are about to start in the next month. So before I start with the technical topic, let me introduce myself. My name is Vikram and I am working as a SAP consultant from more than 15 years. Uh in SAP consulting, I have worked on different modules. I started with SAP FICO, but then from last few years, I'm focusing more on the advanced topics related to SAP for example, SAP FSCM, SAP Central Finance, SAP RA R and not only I restricted myself to or from the FI or CO domain, but I also got to get the exposure on the logistics component also, that is because before I entered into the SAP industry, I was working in a small company where I was taking care of not only the particular department but it was like logistics, HR, finance, I was exposed to all the different areas and that is the reason it was easier for me to understand all the different areas within SAP. So as I told you, I got around 15 years of experience into SAP and uh currently, uh I am working as a freelancer plus I am having my own consulting firm where we are uh helping customers implement SAP and implement as I told you, the advanced module. So we are working on few projects where we are implementing SAP FSCM for customers, SAP controlling for customers. We have worked on various different projects on SAP RAR. I worked as a freelancer also and I have within my company, uh as I told you, I have a consulting company, there also we are helping customers implement SAP RAR or supporting the customers who have already implemented SAP RAR. So this is about me. uh talking about the topic what we are going to cover today is SAP RAR. Okay, so first we will understand what SAP RAR is, we will understand what which companies are implementing SAP RAR, which are the industries which are affected by the new accounting principle due to which SAP RA R is being implemented. So before I proceed, please confirm on the chat screen if my voice is clear, you are able to hear me clearly. Okay, perfect. So let's continue with our discussion. So SAP revenue accounting and reporting or SAP RAR, what exactly is SAP RAR? So you can see revenue accounting and reporting, the name itself is revenue accounting and reporting. So you can see from this definition itself, it is concentrating on the revenue part. Okay, and what is revenue? Revenue is when you sell some products or services to the customer. Okay, whatever amount you get in return, that is your revenue.
[3:41]Okay, so for example, if I'm uh sailing my product to the customer. Uh in this examples and whatever we are going to cover during the course also, we will be taking the example of the telecommunication company, because that is the industry which is most affected and this is the industry where most of the customers are implementing SAP RAR. Okay, so let's take an example of a telecommunication company, which is selling the mobile devices and the data plans or the calling plans to the customers. Okay, so in this example, let's focus first on the mobile device, which is a uh, which is a physical material, which we are selling to the customer. So when we are selling the physical material to the customer, okay, if I talk only from the SAP point of view, in SAP what we do normally, we get an order from the customer. We do the PGI or we do the delivery and PGI to the customer and finally we send the bill to the customer. So normally, in SAP again, if I'm, if I focus only on SAP, when the revenue is booked? So when we created create the sales order, is it the revenue is getting booked? Definitely not, sales order doesn't generate any accounting entry. When we are delivering the material to the customer, is it generating the revenue? Again, no. When we deliver the material to the customer, uh our COGS account gets debited and our inventory account gets credited, right? So here also we are not generating the revenue. The third step is billing. When you are doing the billing, is it the revenue getting generated? The answer is yes. So we are when we are generating the bill to the customer, at that time itself the revenue is getting generated, revenue is getting booked. Right?
[5:28]So let's focus on this example itself. We are generating the revenue or we are recognizing the revenue when the bill is done to the customer. But if the requirement from the uh if the requirement from the IFRS 15 is the revenue should be generated at the time of delivering the material to the customer, which means the as soon as the material is delivered to the customer, the revenue has to be recognized. Okay, so now let's assume we are talking about July month. In July month, we have delivered the material to the customer, but due to some XYZ reason, we were not able to bill. So what will happen in this case? In this case, system will not show you any revenue done in the July month. Okay, if I talk about the normal SAP system without using any RA R functionality, system will not show you the revenue booked in this particular month because the billing is not done. And as I told you, normally in SAP the billing generates the revenue entry. Okay, revenue is recognized only when the billing is done. Right?
[6:42]So you can see in this example, if I follow the normal SAP practice, if I follow the normal SAP SD and FI scenario, my revenue is not generated in this month, although the activity when the revenue should be generated as per the IFRS 15 is already completed. Okay, so this is a this is a reason why SAP introduced SAP RAR. This is a very simple example which I gave you. There are n number of scenarios, which we need to discuss from IFRS 15 point of view. So this is one of the reason why SAP introduced SAP RAR, so that the revenue is recognized based on the standards of IFRS 15. Right? So if you want to understand SAP RAR, the first thing that you need to understand is what exactly is IFRS 15, okay, and how the different scenarios are handled in IFRS 15. If you know those scenarios, you just need to understand how this can be configured in SAP, so that the revenue is recognized, depending upon the activities or depending upon the different scenarios, at what point in time the revenue should be recognized as per IFRS 15. Right? So what exactly is SAP RA R? As I told you, SAP RAR is stands for Revenue Accounting and Reporting and it is a, you can say, module or sub-module or the uh functionality, which is available in SAP, which allows the customers to recognize the revenue as per the IFRS 15 requirement. And it is by default integrated with SAP SD and SAP FI. So in the example which I gave you, the process starts from SAP SD.
[8:48]You create a sales order in SAP, you do the delivery in SAP, you do the invoicing in SAP, okay, and then SAP FI.
[9:50]So based on when you do the delivery, the system will generate the accounting document. When you are uh doing the billing, again the system is generating the accounting document. But if I go through the normal SD FI process, my revenue is not getting generated at the right time and that is the reason I need SAP RAR in between. So I will directly go to this slide so that I can explain you how it works. So you can see this is my operational system. Operational system means this is where my transaction is done. I am doing the sales order, I am doing the delivery, I am doing the billing from the SD point of view, and before it reaches to SAP FI for making the accounting postings, okay, or maybe, you can see, uh you can say, there is SAP RAR in between which will calculate how much revenue should be recognized. So at the month end, okay, so normally we are focusing from the month end point of view here. Why? Because entire month, whatever you do the delivery, whatever you do the bill and billing, it will directly go to SAP FI, it will not go through SAP RAR. But at the month end, whenever you are shaking whether how much delivery I have done and how much billing has been done, if there is any difference, that amount will get calculated in SAP RAR and finally, the adjustment posting will be made in SAP FI.
[11:27]So don't get confused what will go through this, what will not go through this at this stage, but just remember at the end of the month, I want to do my proper financial reporting. And in my financial reporting, we want to show how much revenue was recognized for a particular month depending upon IFRS 15 requirements. And that is the reason each and every transaction that you create in your operational system, that has to flow through SAP RAR, so that the calculations can be performed and finally, the accounting entry should be made as per the rules and regulations of IFRS 15. Okay, good. Okay, so now uh last thing is so what you can expect out of this course?
[12:30]Okay, I assume that you got the idea of what exactly SAP RA R is, why SAP RAR was introduced by SAP and then how the RAR calculation engine works and finally how the architecture of SAP RAR works. So let's go to the last slide which I think there are a lot of questions on the chat screen.
[12:59]What will be covered during the course? So we are going to start with the introduction to IFRS 15 and SAP S/4HANA RAR.
[13:13]We will talk about various different scenarios, so you can expect first or second sessions to be theoretical sessions, where we will understand how IFRS 15 works, what are the different scenarios. So if you have the scenarios listed, it would be easier for us to track how much part we have already covered in SAP RAR and what not we have covered.
[13:40]So first we will understand the basic scenarios according to IFRS 15 and we will introduce what SAP RAR is.
[13:54]Okay, then we will understand how SAP RAR is integrated with the operational systems. So SAP has provided the default integration with SAP SD without any additional effort because SAP SD and SAP RAR, normally they are within the same system. So there is no separate integration required. But yes, if you are having SAP SD system separately and SAP RAR system separately, then definitely there will be some technical steps required in order to integrate the two systems. Okay, but what we are going to cover in this course, I'll give you the summary of what server we are going to use and how it is configured. So we are going to see SAP SD and SAP RAR within the same system.
[14:48]Okay, within the same system we have SAP SD and we have SAP RAR. So if I want to learn SAP RAR as I told you, there will be around one session on making you understand the basic concepts of SAP SD, how the sales orders are created, how the distribution sorry, how the deliveries are done, how the invoicing are done. Okay, those are the things which will be discussing and within the same system we have SAP RAR.
[15:27]We will see what are the configurations required for inbound processing, how we can tell the system that this order type should go through SAP RAR, but this order type should not go through RAR. Right? So those setups in inbound processing we have to configure.
[15:56]Uh we will be having the overview of integration with SAP BRIM and non-SAP system. This we will not be able to see practically, let me be very open. Okay, so I have heard a lot of questions whether the BRIM will be covered. See BRIM is a separate module all together and I'm not the expert as of now. I have worked on it, but as of now, I don't feel that I'm in the position to give the training on SAP BRIM as up to date. Okay, but maybe yes, in future once I'm comfortable, I can start another training on BRIM. At this moment, I'll be just giving you the overview of what exactly is SAP BRIM and how it is integrated with SAP RA R. But let me tell you one thing, it doesn't mean that if you don't know SAP BRIM, you will not be able to work on SAP RAR. As a SAP RAR consultant, you need to understand this completely, this entire section. Inbound processing, revenue accounting and engine, BRF plus. There can be any operational system. It can be SAP SD, it can be, uh FICA, it can be BRIM, it can be non-SAP, you cannot control that, right? Even if you know all the things, if a customer comes up with the requirement that they have non-SAP system, this doesn't mean that if I don't know non-SAP system, I will not be able to use SAP RAR.
[17:33]SAP RAR starts from here.
[17:38]Okay, this integration is some of the integrations are by default, as I told you, SAP SD, we don't need the technical consultant to integrate it, as long as those are in the same system. Same way goes for BRIM also. BRIM is also supported if it is in the same system. Right? Same system means obviously, uh from the BRIM point of view, there are technical activities which might be required. But if BRIM is directly coordinating with the SAP S/4HANA system, within the same system, SAP RAR is automatically integrated. Right? And for more information, like what would be the integration requirement from the BRIM point of view, that will be definitely taken care by the BRIM consultant. Okay, so normally as a SAP RAR consultant, we need to discuss with the BRIM consultant, what information will be sent to our SAP RAR component. And obviously, at the end, whatever calculations will be done, those will be sent to the financial accounting.
[19:02]Okay, one more thing which we are going to discuss as an overview is COPA. SAP RAR previously, if I talk about uh three, four months back, before 1909 version, so it was not possible to directly send the entries or integration between SAP RAR and COPA. Now with what we are going to learn is SAP S/4HANA 2022, within SAP S/4HANA 2022, SAP RAR is also integrated with COPA.
[19:43]Okay, so again, I'm not saying I'll be teaching you COPA here, but I'll be giving you the overview of how the SAP RAR entries will be passed to COPA.
[20:00]Okay, so this course which we are planning, I I think most of you already know, it is starting from 19th of August, and uh this is going to be the weekend course only on Saturdays and Sundays. India Saturdays and Sundays, so if you are from US, I think for you, it would be Friday and Saturday. And the timings will be 9:00 AM IST.
[20:30]Okay, India time, morning 9:00 AM. This is as of now, I think six weeks should be more than enough, but if required, one or two weeks that is not a problem. So normally six weeks, which means 12 sessions, multiplied by two hours, around 24 to 25 hours normally are enough, wherever I have conducted the corporate sessions. Normally we go with the schedule of 24 to 25 hours and that is normally enough. But at the same time, it is not like, okay, we completed six weeks and we are done. If there is any scenario, which is left, if there is any topic, which is left, definitely we can extend that, if required for one or two weeks. Okay, that is not a problem. Now, I think I clearly gave you what you can expect out of this course. Now, I also have some expectations out of this course. Okay, expectations from the audience. So I want to be very open that who should join and who should not join. My recommendation would be, if you are completely new to SAP RAR, definitely this is a course for you if you want to start your career. If you have a little bit background, then also it is good. But if you are a consultant, who already worked on SAP RAR, and if you want to refresh your knowledge, okay, definitely no harm, you can definitely join this, if you want to refresh your knowledge.
[22:23]But my request would be, my priority would be, whenever I'm discussing something, a topic, my concentration would be everyone is able to understand that. So it should not be like, if I'm discussing one topic, and because you are working on the project and you are getting some error, okay, don't expect that you will ask the question on that particular call and I'll be able to answer. Okay, definitely not. So if I'm discussing step one, I'm not expecting the questions on step four, because that is the step which I have never explained till now. Definitely, once we reach to step four, you can definitely ask that question. Okay, so this is the problem normally I face for the experienced consultants. They they are very uh like they they want to get the answers in the first session itself. I can clearly guide you. I can clearly help you, but I need your support. I need your cooperation. Okay, please make sure that we follow the topics in the curriculum so that everyone who is joining this course can understand this clearly. And there are also participants from the functional background like who are not from finance or controlling. Okay, so my priority would be everyone is able to understand. So if you are having questions on the technical topics, please park that. Uh I will give you my email ID, my phone number. You can personally contact me. I can help you, but it should not be like you are putting your practical scenario in the course. Okay, for this I will definitely request. So that is from my end. Now I will be opening the chat screen uh if you have any questions. Thank you all for joining and I'll be opening the chat screen for the questions now. Okay, go ahead.
