Integrate Your Extended Warranty Program with FI/CO

  • by Qian Sharon Tang, System Program Manager
  • April 15, 2004
Once the SAP Customer Service (CS) component is fully integrated with your FI/CO modules, it can track many business processes such as standard warranty. However, it may not be able to effectively account for all of your business processes. The author, who recently created an extended warranty workaround to adapt a company's system to provide better service to customers, shares her lessons learned.

The Customer Service (CS) component in R/3 allows you to track and account for complex common business processes such as standard warranty and extended warranty programs. However, you first must fully integrate those processes with your FI/CO modules.

Far from what is commonly believed, FI/CO integration with CS involves more than just automated accounts determination. You have the option to use the standard R/3 cost object controlling system for certain CS processes. For other processes, you may find that the standard functionalities in R/3 do not meet all your business requirements.

During a recent implementation for a company I'll call Company X, I researched various SAP standard and custom solutions to integrate the service application with finance modules. I will describe one of the most common service offerings — extended warranty — and demonstrate how to build a workaround that meets the business requirements where I found standard functionalities inadequate. (For a brief overview of the standard warranty contract in R/3, see the sidebar, "Standard Warranty Contract.")

Revenue Recognition Basics

In some cases at the sale of equipment, customers sign up for an extended warranty program for their service needs after the standard warranty period has expired. The complexity of this process lies in revenue recognition.

Qian Sharon Tang

Qian (Sharon) Tang is a system program manager who is responsible for the support and development of various areas of SAP systems. Prior to this, she was a senior FI/CO application consultant at SAP China. She has been working with SAP since 1995, with emphasis on FI/CO modules such as FI-GL/AR/AP/SPL, CO-CCA, CO-PC, CO-PA, CO-ML, EC-PCA, and cross-module integration between FI/CO and logistics. She also has experience with MM, SD, SM, and PP.

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