ERPCorp SAP FICO Blog

GR/IR is the SAP process designed to perform the three-way match – purchase order, material receipt, and vendor invoice.  It uses a clearing account to record the offset of the goods receipt and invoice receipt postings.  Once fully processed the postings in the clearing account will balance.

This balancing is performed at the Purchase Order Line Item based on the quantity entered on these documents.  Price variance is calculated and recorded with these posting; exchange rate variance can be as well.  Small differences can be written off using transactions MR1.

Price Variance
This discussion assumes the purchased materials are using Price Control S (Standard) and not V (Moving Average).

The quantity, as well as the amount, on the Goods Receipt and Invoice Receipt postings is important.  To record to Purchased Price Variance (PPV), Goods Receipt must have been posted.  For Invoice Receipts only, there is no posting to price variance.  There can be additional variance postings on Invoice Receipts after Goods Receipts are posted for differences between the PO price and actual price paid.

When postings Goods Receipts, the price variance is based on the PO price, unless Invoice Receipt has already been posted, then it is based on actual price paid.    If Invoice Receipt has already been posted, the Goods Receipt will be based on the Invoice Receipt up to the quality of the IR, after that is will use the PO price again.

After all postings have been recorded to a Purchase Order Line Item, the net PPV posted will be the difference between the actual price paid and the standard cost of the material.

My company is in the early stages of making a move from ECC 6.0 to S/4HANA. I thought it would be interesting to give you my initial impressions about what I have found out about Controlling in the new system. Since we started out with ECC 6.0, we don’t have the baggage of things like “classic G/L” versus “new G/L”, and frankly, I couldn’t explain the differences there. We first got access to an S/4HANA sandbox for a “test drive” of the system. This is a very important step in the transition and has helped me get a much better understanding of how the new system works than through looking at documentation and watching training videos. What follows are my initial impressions based on my experiences in the sandbox. Hopefully, this will be useful for those of you who are either making the move or are contemplating making the move.

I often get asked about difference between a Production Order and Process Order. When is it beneficial to use one over another?
As such, from controlling point of view, both objects have similar features. It is mainly on the Production Planning and Shop Floor Execution side where we see a difference. The main advantage of using Process Order is use of Process Instruction Sheet, or PI Sheet for day-to-day shop-floor activities. Whereas both the scenarios use Material Masters and Bills of Materials; Production Orders use Work Center (Machine) and Routing (sequence of operations) – Process Orders use Resource (Machine) and Recipe (sequence of operations and which component is issued during which operation). The decision on whether to go with Production Orders or Process Order would depend upon type of industry and fitment and is largely driven by the Production Planning team.

While we are on this topic of Production Orders and Process Orders, it might be beneficial to speak about other Cost Objects that are offered in Controlling.

Through my careers as a cost accountant, accounting manager, project manager, and an education
consultant I’ve attended countless conferences on SAP FI-CO. My first experience with this particular
conference was in 2014. I was quite impressed with the roster of speakers, the breadth of the topics,
and the size of the event. It is just large enough to draw a diverse cross section of SAP CO users and
consultants and just small enough for you to be able to connect with individuals. Where else could
you chat over lunch with the legendary Janet Salmon?

If you use Material Ledger’s Actual Costing, then you would know that the Post Closing Step creates accounting documents depending on how the variances for the Material have been distributed. For example, a material with a price (or exchange rate) difference of $100 could be sold, scrapped, used in a production order that is complete, used in a production order that is not complete, transferred to another plant, or left in inventory. And this only refers to the differences that are created on the material itself (single-level), and not the differences that are transferred from other materials (multilevel) which have their own slew of Material Ledger postings.

 Because of this, it is easy to be overwhelmed by the volume of postings that are created by the Material Ledger’s closing entry and what they mean. Some companies choose to label the General ledger accounts appropriately to indicate what the posting is for, but if you do not understand the posting, it is easy to incorrectly label the General Ledger account. Also, you may not need a separate general ledger account for each scenario as that may lead to more General Ledger accounts than you need, and may create even more confusion.

We recently upgraded a test system from S/4 1610 to S/4 1709 and one of the interesting things that we found was that SAP is recommending that the switch for activating profit center accounting in Controlling should be activated. This was a bit of a surprise because I found no mention of this in the Simplification document for 1709 or in any on-line searches.

Ever since release ECC 5.0 clients using the new general ledger with the profit center or segment scenarios active were warned against activation of classic PCA. With the new GL scenarios profit center functionality was incorporated in the GL and the old profit center ledger 8A was not activated. In this case the classic reports in the information system for PCA would not return any results if they were executed.

Dive into this list of the top FAQ's on SAP S/4HANA Finance.

 Is merging of actuals & plan into ACDOCA versus ACDOCP? Is the planning data going to go to ACDOCA or ACDOCP?  If we copy actual to plan for each monthly forecast version, will the P table end up with 12 times the records of the A table?

Planning data will update to ACDOCP. In your copy function you would have to decide at what aggregation you updated ACDOCP (1:1 or roll-up e.g. production orders to not have quite so much data in your forecast). 

Several colleagues have asked questions about integration between Materials Management (MM) and Financial Accounting (FI) module:

- How do postings from MM flow into FI?

- How do we find out what occurs behind-the-scenes?

- How do we identify which movement types are pointing to a specific GL Account?

- Is there a way by which we can change the posting to a different General Ledger (GL) Account?

- How does one create a new movement type and assign it to a specific GL Account?

Many SAP practitioners – IT and business alike – are in similar situation and do not know where to start on MM-FI data flow and reconciliation. This blog is an attempt to clarify the fundamentals of MM-FI account determination.

Configuration transaction OBYC forms the core of SAP’s integration between the MM, FI, and Controlling (CO) modules in a traditional SAP ERP system.

ERP Corp, a leading provider of SAP® Controlling and Financials consulting and training services, recently announced the winners of the 2017 SAP Controlling Community Awards.

Join teams from Tyson Foods, Honda, Kohler, CHS, and Bosch  (and many more!) at Controlling 2017. Here are just a few of the reasons why your SAP FI/CO team needs to be at Controlling 2017: