Critique of Sap System Essay Example

include goods movement posting, physical inventory management, inventory valuation, and material requirements planning. Additionally, the material master is divided into client level, plant level, and storage level. This division allows the company to determine which information is valid within specific departments.

The vendors' information is recorded and updated in the vendor master data. Different departments can access synchronous and up-to-date information. However, a faulty transported object, like a configuration change or code for an interface, can impact other SAP functionality in the production environment. For example, a change to the HR module within payroll can affect functionality in the FI-CO module. If there is a server failure in this model, it could result in the entire organization being unable to process transactions.

However, it is possible to connect two linked servers in redundant backup mode. Similar to material master records, vendor master records are categorized into three levels: General data (Client level), Purchasing data (purchasing organization level), and Accounting data (company code level). Once a vendor master record is created, it is associated with the relevant reconciliation account in the General Ledger. The issue of control arises when determining the authorization to access the data warehouse.

The organization should implement protocols for supervising the authorization process of individuals who will be granted access to their data warehouse at customer and supplier sites. Unauthorized access to Material Master records and Vendor Master records can result in the disruption of the entire expenditure cycle. Regarding purchase requisitions: When the inventory falls below a specific level, the SAP system can automatically generate a requisition when predetermined reorder levels are reached. However, the issue arises when goods are requisitioned for unauthorized intentions.

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is preferable for purchase requisitions to be prenumbered within each originating department as a means of control. This ensures that goods requisitions are properly ordered and received, instead of receiving a number after creating a purchase requisition. For purchases other than inventory replenishment, specific individuals are granted requisition authority. This authority is typically limited to the value and types of goods and services relevant to the person's role and level of authority. Special procedures are usually followed for requisitioning plant and equipment or for entering into lease contracts.

In SAP, purchase orders can be generated with or without a reference to a purchase requisition or a RFQ, which can lead to unauthorized purchases. To mitigate this risk, we propose implementing a system whereby purchase orders are only issued by the purchase department upon receipt of requisitions properly approved by an employee with the necessary requisitioning authority. Additionally, centralizing purchasing in a specialized department could enhance system efficiency.

The purchase department can negotiate more favorable terms and prices, and by combining orders, can get better volume discounts. When goods are received, SAP suggests data from the purchase order, making it more efficient because the system provides the receiving department with the correct amount immediately. However, compared to manual processes, the SAP system often removes the segregation of duties.

However, SAP is the optimal ERP system for addressing the issue of segregation of duties, an essential internal control. Currently, SAP offers over 150 preconfigured user roles that restrict a user's access to specific functions and corresponding data. Upon logging in, users are presented with a menu based on their assigned role, thus limiting their actions to their designated tasks. Moreover,

when inputting an invoice linked to a purchase order, the system automatically proposes data from both the purchase order and the goods receipt.

If the order or goods receipt and the invoice do not match, the system alerts the users and prevents payment for the invoice. However, sometimes the discrepancies occur due to errors in the goods receipt process, resulting in delayed payment to the vendor. To address this issue, it would be beneficial for the organization to implement manual reviews in this step. When a discrepancy arises, a specially authorized staff member investigates the purchase order, inventory report from the warehouse, and the goods receipt report to promptly identify and rectify the mistake.

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