Enabling Financial Management

This document provides an overview of how you set up a basic configuration of M3 Finance Management.


All basic components in the financial system are configured to support the company's processes, including transaction entry, financial monitoring and tax management.

Before you start


  1. Define Number Series

    • Define Journal Number Series
    • Define Voucher Number Series
    • Define Other Financial Number Series
    • Define Invoice Number Series for MUC
  2. Enter Currency-Related Information

    • Define Currencies
    • Define Exchange Rate Types
    • Define Exchange Rates
  3. Define Chart of Accounts

    • Define Accounting Dimension Names
    • Define Account Groups
    • Register Accounting Identities
  4. Define Accounting Rules

    • Create Accounting Events
    • Create Accounting Types
    • Define Accounting Rules
  5. Tailor Presentation of General Ledger Balances

    • Define Accounting Structure Levels
    • Define Accounting Structures
    • Define Balance Keys
    • Define Column Templates for Balance Inquiry
  6. Enable General Ledger Management

    • Define Payment Types
    • Define Payment Methods
  7. Define FAM Functions for Transaction Entry

  8. Define Payment Categories

  9. Enable Tax Management

    • Enable VAT Management
    • Enable Trade Statistics Reporting
    • Enable Supplier Tax Reporting
  10. Register Customers and Suppliers

    • Register Customers/Payers
    • Register Suppliers/Payees
  11. Register Bank Information

    • Register Banks and Branches
    • Register Bank Accounts

1. Define Number Series

2. Enter Currency-related Information

3. Define Chart of Accounts

4. Define Accounting Rules

For a detailed description of how accounting rules are defined and applied, see Accounting Rules Setup and Usage.

For a brief description of all accounting rules, see "List of Accounting Rules in M3".

5. Tailor Presentation of General Ledger Balances

One of the main requirements from a financial system is that you can access your information quickly and easily. In M3, you collect information in a systematic way in the General Ledger balance file by using accounting structures and balance keys. Whereas the General Ledger stores detail transactions, the balance file stores totals per periods. Whenever the General Ledger is updated, the balance file is updated simultaneously. By using the balance file for inquiries, the reply times are shortened. The balance file is available in 'GL Balance File. Display' (GLS215) and in the M3 Report Generator.

The accounting structure is a group of accounting identities or other accounting structures in a hierarchical model corresponding to your organization, for example. You integrate these structures as filters in balance keys. The balance keys are used in the General Ledger balance file to retrieve and present balances by product, or product line, region, customer or salesperson, etc. This can be done online or in the form of printed reports. For each balance, you can drill down into detail all the way to original transaction like materials, production or invoicing. There are two types of balance keys: fixed and user-defined. Accounting structures can be included in the user-defined balance keys. Since you can set up the balance file based on the fixed balance keys only, defining accounting structures is not a mandatory part of the basic configuration. However, accounting structures provides an almost unlimited flexibility when tailoring different financial views of the financial database. Another advantage of using accounting structures is that they make organizational changes easier. Substructures containing many accounting identities can be easily moved to new accounting structures. This has an immediate impact on all reports and queries that are based on the structure.

For details how accounting structures can be used, see Tailoring Presentation of General Ledger Balances.

6. Enable General Ledger Management

Some of the basic functions in the financial system are configured in a separate program for General Ledger settings. This include settings for:

Where defined: 'Settings – General Ledger' (CRS750). See Enable General Ledger Management.

7. Define FAM Functions for Transaction Entry

In order to make the entry of new transactions as smooth and automated as possible, settings or rules specific to certain types of entry are collected in entry templates called FAM functions. The FAM function is applied automatically in certain situations, for example at the period calculation of exchange rate gains or losses. In complex flows, where transactions are entered manually and a high degree of flexibility is needed, you chose among different variants – detail records – of a FAM function to find the one matching the particular type of transaction.

Each FAM function has at least two parts: a predefined main entry (the overall ID) and one or more user-defined detail records containing the rules. All detail records contain information on voucher number series, voucher name, and valid date range. Also, they can contain parameters specific to a function such as invoice accounting template, exchange rate type, and which panel layout to use at manual posting. Every main entry is predefined and generated during configuration or when upgrading the system. You then configure the detail records.

Where defined: 'FAM Function. Open' (CRS405)– press F14 to retrieve the standard set.

8. Define Payment Categories

A company may have to process many different categories of customer payments and supplier payments. In order to manage all these payments efficiently, they are grouped into classes and sub-classes with the following hierarchy:

  1. Payment class

  2. Payment type

  3. Payment method

This division not only enables you to sort and total payments for enhanced processing. On the payment type and payment method level, you can also add settings to minimize the manual work involved.

There are six fixed payment classes in M3, with two exceptions used in both Accounts Receivable (A/R) and Accounts Payable (A/P):

Class   Description A/R A/P
0 = Cash payments Yes Yes
1 = Payments by check with separate allocation to invoice Yes No
2 = Payments by check with direct allocation to invoice during entry Yes Yes
3 = Payments by bank transfer (giro), manual or electronic Yes Yes
4 = Payments by draft (bill of exchange). (This includes definite postdated checks, which are managed like drafts in M3.) Yes Yes
5 = Payments by direct debiting Yes Yes
6 = Factoring Yes No

9. Enable Tax Management

10. Register Customers and Suppliers

Customers and suppliers are registered at company level. However, you can define division-specific exceptions for each one of them. These exceptions may include different currency or VAT code, for example. For both categories you specify the following values:

11. Register Bank Information

You register information about the banks and different types of bank accounts the company is in contact with. This includes the company's own banks as well as banks used by suppliers, customers, employees, etc.

Related topics