Compiere 3

By Andries L Pretorius

This book is a concise guide that focuses solely on implementing Compiere. It uses a business scenario case study throughout to illustrate the sort of decisions and considerations required at critical stages in a real-life Compiere implementation. If you are considering or want to easily implement Compiere in your organization, this book is for you. This book will also be beneficial to system users and administrators who wish to implement an ERP system. No previous knowledge of Compiere is required.

• Language: English
• Publisher: Packt Publishing
• Release date: Jul 1, 2010
• ISBN: 9781849510851

Book preview

Table of Contents

Compiere 3

Credits

About the author

About the reviewer

Preface

What this book covers

What you need for this book

Who this book is for

Conventions

Reader feedback

Customer support

Errata

Piracy

Questions

1. Evaluating the Compiere System

When do you look at Compiere

Compiere's core ERP functionality

Compiere system administration

Sales cycle to accounts receivable

Purchasing cycle to accounts payable

Business partner management

Financial Accounting Management

Cash management

Customer Relationship Management

Inventory and material management

Light Production

Integrated advanced ERP functionality

Critical ERP decision factors

Budget

Up-front functional design and data relationships

Static out-of-the-box versus dynamic flexible ERP

Internal learning curve and time availability

Enterprise readiness

Technology

Personal career aspirations

Brand Loyalty

Do you evaluate Compiere differently because it is open source?

It must meet your functional needs

It must offer the Assurance Support Levels to suit your needs

Community-supported edition

Paid-for enterprise editions

It must provide an open source advantage

Compiere editions

Getting more information

Getting Compiere

Summary

2. The Initial Compiere Setup

Compiere Terminology

Compiere setup overview

Starting and stopping the Application Server

Launching Compiere and logging in

Desktop launch

Web launch

The Compiere menu and windows

The Compiere menu

Compiere transaction window

Initial set-up process

Defining the account elements (Chart of Accounts) import

Setting up a tenant

Defining the calendar, year, and periods

Setting up your organizations

Setting up your warehouses and locators

Set up and verify your account element tree

Setting up and verify your accounting schema rules

Accounting Schema overview

Account schema elements (Information Dimensions) tab

General Ledger tab

Defaults tab

Account Combinations and aliases

Understanding Unit of Measures (UOM) and conversions

Document sequences

Creating a user

Set up roles

Creating a role

Summary

3. Customers and the Sales Process

The Sales Overview

Defining your business partners

Proxy business partners

Linked organization business partners

Credit management

Entering leads and converting to business partners

Sales order to invoice processing

Sales order delivery rules

Sales order invoicing rules

Manually generating invoices from orders

Batch generation of invoices

Document status and actions

Reporting on open orders

Finding sales order documents

Zoom on field names

Order info view

Order and invoicing reports

User list reporting with or without querying

Return Material Authorization (RMA)

RMA category

Return policies

Customer RMA (Return Material Authorizations)

Return credit memo

Distribution runs

Sales processing accounting consequences

Default accounts

Receivables accounts

Revenue accounting

Cost of sales accounting

Tax accounting

Summary of the accounts posting

Sales regions

Commissions

Summary

4. Product and Material Management

The product definition

Describing a product

Setting up a Product

Price Lists

Pricing logic flow

Setting Up a Price List and version

Illustrating a price list increase

Discount Breaks

Pricing Decimal Precisions

Managing Products as Services

Material Management

Warehouse Overview

Adjusting Product Quantities

Physical Inventory Entry

Internal Use Inventory

Moving Inventory

Material Shipments to Customers

Material Receipts from Vendors

Internal Inventory Move

Product Replenishment

Product Costing and Accounting

Typical Accounting of product warehouse transactions

Basic Product Reports Available

Product Info Window

Summary

5. Procurement Management

The Procurement flow

Requisition documents

The Purchase Order

Capturing the Purchase Order

Material Receipt

Capturing the Material Receipt

Accounts Payable (AP) invoice

Capturing the AP invoice

Invoices for expense items (charges)

Matching the Purchase Order, Receipt, and Invoice

Manually matching lines

Vendor payments

Batch processing

Manual selection of invoices for payment

Returns to vendors

Compiere accounting for Procurement

Procurement reports

Summary

6. Compiere Financial Management

Accounting terminology in Compiere

Understanding the accounting entry

Accounting setup flow

Calendar year and period

Account elements

Accounting schema and information dimensions

General Ledger (GL) document types

Rules in processing accounting documents

Accounting info view

Open item management

Payment selection—Paying vendors

Accounts Receivable and Payable Ledger Reconciliation

Cash management and banking reconciliation

The Bank in transit account reconciliation

Posting General Ledger journals (GL journals)

Unposted documents

Financial reporting

Financial reporting hierarchy

Running the financial report

Other available financial reports

Summary

7. Advanced Aspects

The Compiere Application Dictionary (AD)

Table and columns

System elements

Validation rules

Reference

Windows, Tabs, and Fields

Forms

Info windows

Report Views

Reports and processes

Setting up a Compiere menu item

Adding a new field to a window and database

Final step in column creation—Create / Synchronize with the database

Adding our custom field to the Order window

Setting up a basic approval workflow

Illustrative workflow example

Defining a custom node in a workflow

Testing the workflow

Summary

8. Project Planning for Go-Live and Beyond

Managing people (and the project) for success

Finish with the people you start with

The people you start with are not necessary the people you end-up with

Project communication and follow up

Project documentation control

Technical and infrastructure go-live

Hardware and environment for development and testing

Hardware and environment for production

Hosted versus on-premise installation

Stress testing and performance tuning

Network and security environment

Backup-strategy

The go-live milestone

The technical go-Live

The functional go-live

A Compiere standard implementation project plan

The Compiere pre-implementation project plan

The implementation project plan

The go-live milestone project plan

Post implementation

Finishing off the project and closure

Change management of production environments

Supplier Service Level Agreement (SLA) management

Keeping up-to-date: Compiere migration

What is migration?

How does migration work?

Application Dictionary (AD) changes

Keeping AD changes after the migrate

Planning for the migration

Summary

Index

Compiere 3

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Compiere 3

Copyright © 2010 Packt Publishing

All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, without the prior written permission of the publisher, except in the case of brief quotations embedded in critical articles or reviews.

Every effort has been made in the preparation of this book to ensure the accuracy of the information presented. However, the information contained in this book is sold without warranty, either express or implied. Neither the author, Packt Publishing, nor its dealers or distributors will be held liable for any damages caused or alleged to be caused directly or indirectly by this book.

Packt Publishing has endeavored to provide trademark information about all the companies and products mentioned in this book by the appropriate use of capitals. However, Packt Publishing cannot guarantee the accuracy of this information.

First published: June 2010

Production Reference: 1220610

Published by Packt Publishing Ltd. 32 Lincoln Road Olton Birmingham, B27 6PA, UK.

ISBN 978-1-849510-84-4

www.packtpub.com

Cover Image by Faiz Fattohi (<[e-mail]>)

Credits

Author

Andries L Pretorius

Reviewer

Yves Sandfort

Acquisition Editor

Steven Wilding

Development Editor

Wilson D'Souza

Technical Editor

Pallavi Kachare

Indexer

Hemangini Bari

Editorial Team Leader

Akshara Aware

Project Team Leader

Priya Mukherji

Project Coordinator

Prasad Rai

Proofreaders

Dirk Manuel

Chris Smith

Production Coordinator

Melwyn D'sa

Cover Work

Melwyn D'sa

About the author

Andries L Pretorius, CA(SA) ACMA(UK), an accountant by training who understands programming, is founder of Astidian Systems a leading Compiere and professional open source applications development and consulting house, which is a pioneer in deploying Compiere within its market for more than the last seven years.

He has led many Compiere implementations as well as SAP R/3 and Great Plains (now MS Dynamics) implementations both from a consulting and business owner perspective. He has been the lead architect in many custom Compiere enhancements and has over 15 years of experience in ERP and CRM applications.

His experience includes CFO and COO of leading South African retail, wholesale, and distribution enterprises, financial manager at a telecoms provider in Singapore as well as being articled at Deloitte Johannesburg and New York offices.

You can reach him on his blog on www.astidian.com/blog.

To my wife Erika and family who had the patience for endless weekends of stolen time.

Thanks to Jorg and Kathy for architecting the next generation ERP, Ashley G Ramdass, Neil Gordon, Steven Wilding for his patience, Prasad Rai and Wilson D'Souza at Packt Publishing.

About the reviewer

Yves Sandfort is a veteran in the Internet business and a well known and respected commercial open source evangelist. He combines in-depth technical knowledge with the ability to quickly adopt real business demand. Especially his good understanding of national and international financial relations and how to build, maintain and successfully rollout financial solutions (CRM/ERP/BI) make him an expert you don't want to miss on your project.

Yves Sandfort has implemented commercial open source applications like Compiere, Pentaho or SugarCRM in companies of all sizes around the world (Europe, USA, Hong Kong, Australia). The comdivision group, which he founded in 1996, is proud partner of many commercial open source projects and shows that there is the possibility of commercial success in the open source industry.

I would like to thank some open source veterans and investors like Andre Boisvert, Larry Augustin, and Jorg Janke who always supported my work and helped me to build a successful business around the open source ecosystem. Without these people I would not be in the position to work around the globe and review books like this one.

Preface

In its simplest form a business entity is the legal or otherwise manifestation of the entrepreneurial spirit of human beings. Information is required in order to record, control, analyze, and predict the entrepreneurial process. Information systems supporting these activities have greatly evolved in the last 40 years from the very basic to the very complex. By its very nature information systems have been required to constantly change to keep up with the entrepreneurial spirit. ERP (Enterprise Resource Planning) systems as they have come to be known evolved from the eventual requirement to have an integrated system across the entire business process (end to end).

Celebrating and maturing from an open source project to a leading edge competitor in the ERP space, Compiere offers best-of-class functionality on a model-driven architecture, the latest enterprise platform-independent web technologies (GWT, Java, JBoss, Oracle / Postgress), while maintaining open standards, value, flexibility, scalability, and most of all an integrated ERP platform that can be extended with ease.

Compiere is widely regarded as the top Open Source ERP and its name was derived from the Italian word for to fulfill / deliver.

In this book we will introduce you to understanding Compiere functionality by exploring the different essential business processes. We will cover the setup, the processes of Sales, Purchasing, Inventory, and Financial Management as well as the advanced aspects like Workflow, project planning, and migration.

Every chapter is illustrated by example so as to facilitate quick, concise, and practical reading. The book's aim is to take your basic knowledge of the ERP environment and ensure that you gain a practical understanding of the critical functional aspects during the process of evaluating or implementing Compiere.

What this book covers

Chapter 1, Evaluating the Compiere System aims to highlight to the reader aspects