ERP Systems (SAP/Oracle)

Q: What is an ERP system?

Enterprise Resource Planning software that integrates finance, procurement, sales, inventory, HR and more into one shared database so data flows across modules.

Q: What is the role of the General Ledger module in an ERP?

It is the central book of record where all sub-ledgers (AP, AR, assets, inventory) post, and from which the financial statements are produced.

Q: What is a sub-ledger and how does it reconcile to the GL?

A sub-ledger holds transaction detail (e.g. every customer invoice); its total must reconcile to the corresponding GL control account.

Q: Explain the procure-to-pay (P2P) and order-to-cash (O2C) cycles.

P2P runs purchase requisition -> PO -> goods receipt -> invoice -> payment; O2C runs quote/order -> delivery -> invoice -> receipt. ERPs enforce three-way matching in P2P.

Q: How does period-end close work in an ERP?

Sub-ledgers are reconciled, accruals/adjustments posted, foreign currency revalued, the period is locked to prevent new postings, and reports are generated.

Q: Why is master data important in an ERP?

Vendor, customer, GL and item master records drive every transaction; poor master data (duplicates, wrong tax codes) causes errors across all modules.

6 question(s)

What is an ERP system?

Beginner

Enterprise Resource Planning software that integrates finance, procurement, sales, inventory, HR and more into one shared database so data flows across modules.

GL + AP + AR + Inventory + Procurement sharing one database

Real-world example A large company runs finance and operations together in SAP or Oracle.

What is the role of the General Ledger module in an ERP?

Intermediate

It is the central book of record where all sub-ledgers (AP, AR, assets, inventory) post, and from which the financial statements are produced.

AP, AR, Fixed Assets sub-ledgers -> post to GL -> Financial Statements

Real-world example Every module ultimately reconciles to the ERP general ledger.

What is a sub-ledger and how does it reconcile to the GL?

Intermediate

A sub-ledger holds transaction detail (e.g. every customer invoice); its total must reconcile to the corresponding GL control account.

AR sub-ledger total 1.2m = GL Receivables control 1.2m

Real-world example A month-end control is proving each sub-ledger ties to the GL.

Explain the procure-to-pay (P2P) and order-to-cash (O2C) cycles.

Advanced

P2P runs purchase requisition -> PO -> goods receipt -> invoice -> payment; O2C runs quote/order -> delivery -> invoice -> receipt. ERPs enforce three-way matching in P2P.

P2P: PO 1,000 + GRN 1,000 + Invoice 1,000 -> 3-way match -> pay

Real-world example Three-way matching in SAP stops payment of invoices without a matching receipt.

How does period-end close work in an ERP?

Advanced

Sub-ledgers are reconciled, accruals/adjustments posted, foreign currency revalued, the period is locked to prevent new postings, and reports are generated.

Reconcile -> post adjustments -> FX revalue -> lock period -> report

Real-world example A structured close checklist in Oracle ensures a fast, controlled month-end.

Why is master data important in an ERP?

Intermediate

Vendor, customer, GL and item master records drive every transaction; poor master data (duplicates, wrong tax codes) causes errors across all modules.

Duplicate vendor master -> duplicate payments risk

Real-world example A master-data governance process prevents duplicate or fraudulent vendors.