ENTERPRISE they are achieving with the implementation of the

ENTERPRISE RESOURCE PLANNING TERMPROJECT                                                                                                   ERP SYSTEM AT  ENGRO FERTILIZER(FI MODULE)                                                                                                   AYESHA KHAN 17191

Introduction of the Company

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Engro
Fertilizer’s Limited ,which  is a
subsidiary of Engro
Corporation  produces leading fertilizer brands  .  According to Pak investors guide ,Engro is a
renowned name in Pakistan Fertilizer Industry 
and it holds a vast nationwide production infrastructure. According to
Universal Hunt, It is also a leading   seller 
and importer of  Phosphate
products.

                                                                                                                                                       Objective                                                                                                                                                      The objective of this research is to
study the implementation, automation and   challenges behind ERP processes. The intention
backed for this research is to study how the   Accounting and Finance  department in companies are using ERP to
software to integrate system, and what they are achieving with the
implementation of the software.                                                                                    Methodology                                                                                                               The team member
underwent detailed interview with the  Finance
head in Engro Fertilizer, so as to get insight of the running SAP processes,
what challenges they face and how they are integrating their processes using
SAP ERP solutions.                                                                                           Literature Review                                                                                                                                  In the Research  about the effects of ERP in the
Accountants  function, (Keller 2004)
stated that  ERP – Enterprise Resources
Planning is a concept broadly diffused to organizations, since it was coined by
Gartner Group in early 1990 as the next-generation of Material requirement
Planning . According to Burns et ali (1999 ), the growing use of ERPs such as
SAP and the progresses in the technology have great implications for the
accountants. The information is now thoroughly dispersed in the organization .As
a result, managers have direct access, in real time, instead of depending on
the accountants to get them. Enterprise resource planning system which is a kind of integrated information
transformation system is widely used in various enterprises.  The enterprises resources planning system SAP
R/3 benefits the structures of many organizations. It works as an tool to
consolidate data flows and record business transactions in the organization
(Granlund 1998) .According to (Hayen 2007) the key technological skill of this
software is in the computer controller of all the main processes of a business:
from sales order entry to manufacturing to invoicing to collection More than
80% of international companies are organized under this information
system(Eresurce 2013).                                                                                                         According
to the study  “Effects
of Implementation  of Sap on Management
Accounting” an ERP system offers technological, process efficient, financial,
strategic and organizational benefits over diverse computing systems .This
study focuses on  how enterprise resource
planning system changes management accounting in an organization .Before the
implementation of Erp software , managers had the responsibility for monitoring
budgets, producing forecasts  and
explaining variances .The work previously done by a management accountant, are
now undertaken by SAP software.                                                         

Benefits
 that the 
Accounting and Finance Department gets with the implementation of ERP
System

                              .

                                                          
                                                                                                        As stated in Udemy Blog ,Financial Accounting (FI) is the core module which
manages all financial transactions, for internal as well as external auditing
purposes in Engro Fertilizer Limited. With the help of this module, Engro
Fertilizer was able to track financial accounting data within a framework of
multiple  languages and currencies(Actouchtech
article). According to article Opensource
ERP,Financial accounting  Module
helped to gather financial data from various functional departments of Engro,
and it  generates valuable financial
reports such as general ledger, trail balance, 
balance sheet and quarterly financial statementsAs stated in Udemy Blog ,before the implementation of
this module at Engro,business and financial accounting processes  used to consume a lot of time and resources
in preparing statements, reports, forecasts, charts and other important data on
a day-to-day basis. The SAP ERP software has redefined the way businesses are
conducted at Engro, making them highly efficient and profitable.  According to Sssbi
Article, SAP FI Module is integrated with many parallel modules such as Material Management (MM), Sales & Distribution (SD), Human Resources (HR), Production  Planning (PP),
Controlling (CO),  that enabled Engro to
unify processes that may have needed the utilization of many software packages(my
erp guide blogspot)

 

                                                                                                      
                                                                According to  the article ERP technicals and tutorialspoint,Financial
Accounting module Of  Sap mainly deals
with the following financial components which are as follows:
• Fixed asset
• Accrual
• Cash journal
• Accounts receivable and payable
• Inventory
• Tax accounting
• General ledger
• Fast close functions
• Financial statements
• Parallel valuations
• Master data governance        

                                                                                                                                                                                According to the
article SAP Financials and SAP Accounting Modules, Sap Fi Module comprises of the folllowing submodules                                                                                                                                                                                                 

·        
General Ledger

·        
Accounts Payable

·        
Accounts
Receivable

·        
Bank Accounting

·        
Asset Accounting

·        
Funds Management

·        
Travel Management                                                                                                                                                                                   SAP General Ledger:  The major aim of general ledger accounting is to provide a
system for managing all external accounts of Engro Fertilizer limited. It
records all the business transactions along with various other operation areas
and It also provides real-time assessment of cost accounting areas.

SAP Accounts Payable and Receivable:  SAP accounts payable  helps
to records all the components and data for vendors .SAP account receivable
records all the components and data for customers. Balance sheets and account
statements are created using these modules.

SAP
Bank Accounting: As
stated in Simplilearn,this module handles all bank accounting transactions.
From managing bank master data, cash balance management to processing incoming
and outgoing payments; everything is managed using this module                                                                                                                                             Asset Accounting: This module is
designed to manage and supervise fixed assets along with providing detailed
information and reporting data.

SAP Funds Management: This SAP
accounting module supports all the related tasks in creating and managing
budgets.

SAP Travel Management: According to
simplilearn ,this SAP module accounts all the transactions related to corporate
trips organized by Engro.Approvals, bookings, settlement and diverse travel
expenditures are recorded and managed with the help of this module 

As stated in
Sssbi article the Implementation of Financial accounting Module at Engro
Fertilzer  simplified processes such as
scheduling, financial consolidation, reporting and allowed better management of
cash-flow, receivables and payables, credit management, collections, finance
and treasury functions etc. FI module
store large amounts of financial data to generate helpful reports and maintain
a highly reliable financial system at Engro Fertilizer Limited

The inclusion of ERP in the
Financial Area gives support to decision making since it guarantees reliability
and total security on the accounting information

According to exforsys ,another
advantage provided by ERP is the great operational flexibility it is a very
useful tool for multinational companies and corporate bodies like Engro
Fertilizer since it permits them to execute the fiscal closing.                                                                                                               

As stated in Exforsys,ERP also
offers better access and more safety. All the components of the financial
department are able to access the chain of flow management

                                                                                        
     Evaluation Rubric

References                                                                                                                                            Wang,Y.(2013).Effects
of implementation of SAP on Management Accounting.Retrieved fromhttp://www.theseus.fi/bitstream/handle/10024/58320/Wang%20_Yingyu.pdf?sequence  .                                                                                                                          Riccio,E.L.(n.d).Erp Systems –Study about the
effects of ERP in the Accountants 
function.Retrieved from
http://www.tecsi.fea.usp.br/disciplinas/5846/textos/pdf/effects.erp.systems.accounting.organization.pdf.

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