- Paul Ovigele
For organizations that buy and sell goods between affiliated entities, gaining a clear view of true enterprise margin remains a persistent challenge. Inventory values often include intercompany profit, making it difficult to distinguish actual performance from internal markups.
While SAP’s standard approach to addressing this in S/4HANA typically involves activating Group Valuation (which requires a significant system and
data transformation effort) many companies find the cost, complexity, and disruption difficult to justify.
This session introduces an alternative approach that enables organizations to analyze inventory and profitability both with and without intercompany profit, without requiring fundamental changes to core valuation structures. Leveraging standard S/4HANA capabilities such as Material Ledger and Parallel Ledger, combined with targeted enhancements, this approach provides a practical path to improved transparency and
better decision-making.
Attendees will gain insight into how to achieve group-level margin visibility, support transfer pricing analysis, and enhance financial reporting, while avoiding large-scale transformation initiatives.
Key Takeaways:
- Understand why intercompany profit in inventory distorts true margin visibility at the enterprise level
- Learn the limitations and implications of traditional approaches such as Group Valuation
- Explore an alternative design leveraging Material Ledger and Extension Ledger for group-level insights
- See how to deliver meaningful transfer pricing and margin analysis capabilities without major system transformation
- Gain practical guidance for balancing business value, cost, and implementation complexity in S/4HANA
- Speaker: Paul Ovigele
