Financial Contract Analysis for SAP BI-Intellectual Property Management

[kkmishra14]

Summary:

This Article answers various questions on how to model financial contract analysis buckets in BI for SAP CRM IPM solution

FCA answers various questions for which the organization is seeking answers viz. What is the value of contracts that meet specific criteria? How much of it could be considered as earned revenue? What portion of this earned revenue is billed? Did customer pay what we billed? Are there any payments that could not be associated contract (Cash on Account)? What is the effect of Foreign Exchange variations (F/X Variation) on international deals? Is it favorable or un-favorable?

Financial Contract Analysis (FCA) is an important activity that needs to be performed to check the health of an organization and ensure the profitability. While most of the revenue comes from TV Deals, analyzing these deals is not simple. This document provides a solution to this problem through a series of complex transformations of data in a layered approach.

The Challenge:

While the SAP solution for media (IPM) provides a frame work for by-title FCA using the Special Purpose Ledger (FI-SL) data, granularity of data needs to be refined for analysis and reconciliation purposes. Also, there are several characteristics that are to be derived based on the data available. FCA needs to serve as the basis to Title/Deal/Scope level split of A/R data.

The Solution:

The cash ledger (C3 – Ledger) data is pulled in BW system and is stored in a staging Data Store Object (DSO) after deriving the profit center, location code, and cost type information. This data is also stored in a corporate database data store object called FCA corp. data DSO at document item level for quick look-up and audit purposes. The data from staging DSO is then transformed into desired format by using complex coding that uses the reason codes, account numbers, document types to classify the data into various measures (amount fields/ key figures) called FCA buckets and is stored in a second level DSO. The transformed data is stored in a data mart (InfoCube) for quick reporting.

Here are the FCA buckets :

FCA Buckets

Total Sales

Recognized Revenue (Total Earned Revenue)

Unrecognized Revenue (Total Unearned Revenue)

Total Billed

Total Unbilled

Paid (Total Cash Applied) or (Billed / Paid)

Billed /Paid Withholding Taxes

Unpaid (Billed / Unpaid)

Cash on Account

Foreign Exchange Gain / Loss

Total Receivables

Earned Revenues Billed

Earned Revenues Unbilled

Earned Revenues Paid

Earned Revenues Unpaid

Total Earned Receivables

Unearned Revenues Billed

Unearned Revenues Unbilled

Unearned Revenues Paid

Unearned Revenues Unpaid

Total Unearned Receivables

Earned Revenues Paid Withholding Taxes

Unearned Revenues Paid Withholding Taxes

Earned Foreign Exchange Gain / Loss

Unearned Foreign Exchange Gain / Loss

Accrued Billed WH taxes

Accrued Unearned Billed WH taxes