How Expert SAP Consulting Optimizes Your Business

Table of Contents

1. Profitability Analysis

2. SAP Actual Costing

3. S/4HANA Transitional Roadmap

4. SAP Goods Receipt vs Invoice Receipt

5. SAP Internal Orders vs WBS Elements

6. SAP Subcontracting

7. Glossary

Introduction

At ERPCorp we provide tailored solutions for your unique SAP business challenges. Our core values revolve around understanding the challenges and opportunities that lie within each organization.

Some of the transformative SAP solutions we provide include:

SAP FICO Controlling Conference 2023 Highlights

Here's an overview of the SAP Controlling Financials Conference 2023 Sessions

Pre Conference Sessions - Sunday, September 17th 

Introduction to Controlling in S/4HANA

By Marjorie Wright

In this pre-conference workshop session Marjorie explained the changes in controlling master data and processes with S/4HANA. All attendees enjoyed this session, with many questions for Margie about new features in SAP S/4HANA. 

We learned about the importance of the Universal Journal, and how cost elements are integrated with general ledger accounts.
Some examples of the many questions for Margie include:

• Do we really need to use SAP Material Ledger 
• Is costing-based CO-PA  still relevant
• Please compare SAP S/4HANA Profitability Analysis with Margin Analysis

Learn more about Marjorie Wright

SAP IBP Success With UST Test Strategy

By Melanie Olson and David Wyllie

Introduction

Many SAP customers have difficulty planning test scenarios due to a lack of test data.

What's the Difference between an Internal Order and Project System in SAP

By Kent Bettisworth and Gerald Steele

Credit Management in SAP S/4HANA

By Dan Magni

Credit Control Areas in ECC are called Credit Segments in S/4HANA.

Credit Segment Definition

With the Manage Credit Accounts app, you have a 360-degree view of credit for a business partner for every credit segment they conduct business in.

How Segments Are Organized
The purpose of credit management in an organization is to reward good business partners as well as to manage external risk.

Meet the SAP Press Authors

Top 10 SAP Books SAP Press Bestsellers - June 2023

1. Transportation Management with SAP S/4HANA

The definitive book on TM is back! See how transportation management fits into your SAP S/4HANA landscape and find out what’s new for basic and advanced TM. Walk through master data to get your transportation network up and running. Then follow step-by-step instructions to set up and use embedded TM functionality in SAP S/4HANA for transportation planning, freight order management, transportation execution, charge management, and more. Round out your implementation with detailed integration scenarios, migration tips, and best practices.

• Implement basic and advanced TM in SAP S/4HANA
• Master transportation planning, freight order management, carrier selection, and more
• Calculate and settle charges with LSPs and customers

Webinar: New SAP Book

Production Variance Analysis in SAP S/4HANA

Attend this webinar by John Jordan and Janet Salmon to learn about SAP Variance Analysis in S/4HANA and the book they co-authored

How a Chemicals Manufacturer Improves CAPEX Request Management with Process Re-engineering & Automation

A specialty chemicals manufacturer based in Delaware employs 5,200 people in 120 countries. They are starting to automate the process of capital expenditure (CAPEX). With SAP Fiori, based on results delivered during its proof-of-concept stage, they aim to reduce customer equipment deployment times and improve process efficiency.

This case study explains how the client of IQX Business Solutions, plans to improve CAPEX request management through IQX Capex.

RISE with SAP and Ascend with UST

By Ramya Kannan

Introduction

UST offers three accelerator programs to complement RISE with SAP so you can quickly and reliably achieve transformational change in the cloud.

New SAP Press Book

Material Ledger in SAP S/4HANA

By Paul Ovigele

Sponsorship Opportunities

How to Change the Cost Component Structure with SAP Material Ledger Active

By Constantino Solis Prego

Table of Contents

1. Map Origin Groups
2. Cost Component Groups
3. Sort Strategy
4. Split Strategy
5. Timing
6. Reporting
   
   

Introduction

This article explains how to change the cost component structure in six steps without losing cost component history.

The example is based on a typical food/beverage processing plant with two main lines: food/liquid processing and packaging. The initial cost structure follows an accounting scheme, mapping all the ingredients to one cost component, packaging materials to another, and labor, depreciation, and other production activities grouped into other 3 separate cost components.

Online SAP FICO Glossary

Depreciation

Depreciation is a method of allocating the cost of a fixed asset over its useful life.Depreciation is a method of allocating the cost of a fixed asset over its useful life.Every asset has some value. When you acquire an asset, you incur a certain expense, which for many assets could be quite significant. But you’re not allowed to immediately expense that cost in your financial statements.

Fiscal Year Variant

The fiscal year variant defines the fiscal periods and calendar assignments used to post documents in financial accounting.

Origin Group

An origin group identifies materials separately assigned to the same cost element, allowing them to be assigned to separate cost components. The origin group can also determine the calculation base for overhead in costing sheets.

Revaluation Run

SAP Press Book: Asset Accounting with SAP S/4HANA

by Stoil Jotev

Learn how to configure and use asset accounting in SAP S/4HANA.

The book is organized into the following chapters:

Table of Contents

• Introduction
• Chapter 1 Organizational Structures
• Chapter 2 Master Data
• Chapter 3 Asset Valuation
• Chapter 4 Business Transactions
• Chapter 5 Periodic Processing
• Chapter 6 Asset Reporting
• Chapter 7 Migrating Asset Data
• Appendix A: Obsolete and New Transaction Codes and Tables in SAP S/4HANA
• Glossary

100+ Things To Know About Controlling with SAP

By John Jordan

Learn More Expert Tips: 100 Things You Should Know About Controlling with SAP

Product Cost Controlling with SAP

By John Jordan

SAP FICO Controlling Conference 2022 Highlights

Here's an overview of the SAP Controlling Conference 2022 Sessions

Day 1

SAP FICO Keynote

What's New With Allocations in SAP S/4HANA

by Paul Ovigele

Cost Allocation within the Overhead Cost Controlling module enables you to periodically allocate posted amounts and quantities from sender to receiver cost objects based on a Cycle Structure.

New SAP Press Book

Production Variance Analysis in SAP S/4HANA

Table of Contents

• Introduction
• Chapter 1 Initial Planning
• Chapter 2 Cost Estimates
• Chapter 3 Actual Costs
• Chapter 4 Period-End Processing
• Chapter 5 Scrap Variance
• Chapter 6 Reporting
• Chapter 7 Future Direction of Variance Analysis
• Glossary

SAP FICO Controlling Conference 10th Anniversary

Join us October 10-11, 2022 for the 10 year anniversary of our SAP Controlling Financials conference. We've been attracting attendees from across North America and internationally to our SAP Controlling conference in San Diego, CA for over 10 years.

Here's just six of the many reasons our attendees prefer our conference and keep on returning:

RISE with SAP Benefits

Learn more about RISE with SAP at SAP Controlling 2023 Conference September 17-19, 2023.

SAP FICO Controlling Conference 2022 Highlights

It’s been a few months since our last SAP FICO Controlling conference so here's a wrap up of the SAP topics we covered. We had a wonderful time at the beautiful SAP HanaHaus overlooking Newport Beach marina.

Some of the highlights of the SAP topics covered below were expertly delivered by Anurag Barua from SAP who talks about RISE with SAP and benefits to your company. Marjorie Wright took us through the benefits of SAP S/4HANA Margin Analysis. Tom King talked about transitioning Material Ledger to SAP S/4HANA.

Dirk Lonser & Maitrang Nguyen from UST took us through a SAP S/4HANA Finance to Public Cloud case study. Chris Ritterhern & Steve Christos from SAP discuss planning with SAC & SAP Cloud. Finally, Stephen Thomaidis from SAP shows us how SAP transitioned from a software to a cloud company.

Topics and videos from March 2022 are available for replay with ERPcorp Learning Membership.

Display SAP MM-FI Automatic Account Assignment

by John Jordan

Table of Contents

1. Introduction
2. Display OBYC Accounts with SE16N
3. More Information
4. Glossary

Introduction

You use configuration Transaction OBYC to assign SAP General Ledger (GL) accounts in Financial Accounting (FI) to movement types in Materials Management (MM), also known as SAP MM-FI Automatic Account Determination or Assignment.

SAP Assembly Scrap

By John Jordan

SAP assembly scrap allows you to plan for faulty or damaged assemblies.

Since no production process is perfect, some scrap is always produced. You can either scrap or rework assemblies and components that do not meet quality standards. Depending on the problem, you may scrap cheaper items and rework costly items.

SAP Controlling Conference Networking Reception

SAP Subcontracting

By John Jordan

Table of Contents

1. What is Subcontracting in SAP

2. Overhead in Subcontracting in SAP

3. Special Procurement Type in Subcontracting

4. Outsourced Manufacturing

5. Glossary

What is Subcontracting in SAP?

SAP Subcontracting involves sending components to a vendor to manufacture an assembly for you. The vendor returns the completed assembly, and during goods receipt GR, the components are issued from subcontract inventory. Subcontracting is a purchasing process with the manufacturing ocurring at the vendor location.

SAP Cost Estimates & MRP Procurement Type

by John Jordan

Table of Contents

1. Introduction
2. MRP 2 View
3. In-house Production
4. External Procurement
5. Both Procurement Types
6. Special Procurement
7. Special Procurement for Costing
8. Glossary

Introduction

SAP cost estimates determine how the procurement type sources the material. Material requirements planning (MRP) guarantees material availability by monitoring stocks and requirements and by generating planned orders for procurement and production. A cost estimate needs data on how the material is procured as the first step in determining material cost.

Let’s see how to display procurement types and then look at how cost estimates use this information.

SAP Actual Cost Component Split

By John Jordan

SAP Actual Costing with SAP Material Ledger allows variances to flow to semi-finished and finished products based on the consumption of lower-level components. While multi-level price determination allows you to see the actual price of all materials at the end of the period, you cannot display price differences rolled up separately from the lowest to highest-level materials. You only see price differences assigned from the next lowest level.

SAP Costing Sheets Allocate Overhead

by John Jordan

There are three methods to distribute overhead costs to the cost of goods sold for the standard price.

In increasing level of flexibility and complexity, they are as follows:

Activity Rate:

You can either increase the planned activity price to include overhead or create separate overhead activity types. Manufacturing orders are debited, and production cost centers are credited during activity confirmation.

Add SAP Cost Component Groups to Cost Components

By John Jordan

Cost components group similar cost types together by cost element. Typically:

• Materials
  
  
• Labor
  
  
• Overhead
  
  

Cost components are not available as columns in standard cost estimate list reports. However, they are useful when analyzing production or purchasing performance across a range of products. You add cost components to standard cost estimate list reports and costed multilevel BOM reports by:

• Create cost component groups
  
  
• Assign them to cost components

Actual Costing with SAP Material Ledger

By John Jordan

SAP Material Ledger has two main functions:

• Carry inventory in multiple currencies and valuations
  
  
• Actual Costing

In this blog we'll discuss Actual Costing in detail:

Actual costing generates a material ledger document for all goods movements at standard price (preliminary valuation). At period-end, the actual price is calculated for each material based on the actual costs of the period. The actual price is called the Periodic Unit Price (PUP) and can be used for the following two functions at period-end:

SAP Material Ledger Period-End Closing

By John Jordan

Table of Contents

1. Introduction
2. No Period-End Processing
3. Single-level price determination
4. Multiple-level price determination
5. Glossary

Introduction

The three period-end options you have when you activate SAP Material Ledger are:

1.  No Actual Costing - no period-end processing
   
   
2.  Single-level price determination
   
   
3.  Multilevel price determination

Here's more details of each option:

SAP Standard vs Moving Average Price

By John Jordan

You choose either standard or moving average price for inventory valuation. Let’s consider each in detail.

You change the price control indicator with Transaction MM02 or by following menu path: 

Logistics • Material Master • Material • Change

Navigate to the Costing 2 view to display the screen shown in Figure 1.

Post SAP Purchase Price Variance PPV to Purchasing

By John Jordan

Introduction

You typically obtain the SAP standard price for purchased materials from purchasing info records during a costing run. Purchasing info records store vendor quotations per material and estimate your plan purchase price.

You post purchase price variance (PPV) during goods and invoice receipts if the actual purchase price is different from standard. You use it to measure Purchasing performance and have Purchasing explain an increase in unfavorable PPV postings.

 ERP Corp, a leading provider of SAP Financials S/4HANA 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:

Thank you to the Controlling 2017 event sponsors and exhibitors -- the event wouldn't be possible without you!

Curious what SAP Controlling 2016 attendees thought of the annual conference for SAP Controlling professionals? Find out in this video blog post. 

Free Book Sample: Product Cost Controlling with SAP

By John Jordan

Read this sample chapter from Product Cost Controlling with SAP by John Jordan to learn more about settlement configuration and period-end processing, from settlement profiles and the allocation structure to parameters and processing types. It also examines the new settlement-related transactions available with SAP S/4HANA.

On June 29 members of the SAP Controlling Community gathered for a webinar on SAP S/4HANA Finance – From Batch to Real-Time presented by Janet Salmon and Birgit Oettinger, SAP SE. In this blog post, Janet Salmon addresses frequently asked questions from the webinar.

On June 35 members of the SAP Controlling Community gathered for a webinar on SAP S/4HANA Finance – From Batch to Real-Time presented by Janet Salmon and Birgit Oettinger, SAP SE.

Tip 100 from 100 Things You Should Know About Controlling with SAP (2nd Ed) by John Jordan:

You can reference SAP Note 552486 for answers to frequently asked questions about Product Cost Controlling (CO-PC). Process orders provide you with extra functionality, such as phases and process instructions for process industries. 

The Online Service System (OSS) contains a database of useful information and advice on fixes for SAP system issues, consulting notes, and frequently asked questions. OSS Note 552486 contains advice on 14 SAP Controlling frequently asked questions. In this tip, we'll discuss how to access OSS Note 552486 adn we'll go over the note's first couple of questions and answers. 

Reserve your place now for a webinar on SAP S/4HANA Finance – From Batch to Real-Time presented by Janet Salmon and Birgit Oettinger, SAP SE.

June 29 at 9:00 AM PST/12:00 PM EST

Reserve your place now for a webinar on SAP S/4HANA Finance – From Batch to Real-Time presented by Janet Salmon and Birgit Oettinger, SAP SE.

June 29 at 9:00 AM PST/12:00 PM EST

How to Create an SAP Internal Order Budget

By John Jordan

An internal order budget, or approved funds, are maintained at either an overall or annual level.

You activate availability control, which can issue warning or error messages based on defined tolerances. Let's look at how you create an internal order budget and activate availability control.

SAP Process Orders vs Production Orders

By John Jordan

Learn more about ERPCorp SAP Coaching & Consulting: Click here now

What's the difference between production orders and process orders in SAP?

 SAP process orders provide you with extra functionality compared to production orders, including phases and process instructions for process industries.

When you use production orders, a routing and a bill of material (BOM) are transferred to the master data of the order header. When you manufacture with process orders, the master recipe and associated materials list are transferred. The difference occurs because process industries manufacture in phases, converting initial liquid batches into consumable batches, which are then bottled and packaged.

When Should I Use An SAP Internal Order

By Majorie Wright

Why would you use an internal order? Here a few examples:

    You're managing an event with several cost centers.

    You'll settle major repair costs to a production line cost center.

    You're responsible for a fleet of service vehicles with a cost center.

    You're managing a capital project with a budget.

    You need to measure revenue and cost for a non-standard event.

Each of the above examples require:
    An order with actual/plan cost, and a settlement rule or a periodic reposting cycle to cost centers.

    An order with actual/plan cost, and a settlement rule to a profitability segment.

    An order with statistical cost, and a real cost-center assignment.

    An order with an investment profile, budget, and availability control.

    An order with revenue, and perhaps a sales order line item assignment.

You can see the combinations and possibilities of internal orders are quite flexible.

To learn more about SAP internal orders and other SAP FICO topics please visit our new 

SAP FICO Learning Center, please click here

Marjorie Wright is an SAP expert, author, and speaker, and is the founder of Simply FI-CO, LLC, a boutique SAP training consulting company. She is an education consultant in SAP FICO and financial supply chain management. With more than 25 years of training and accounting experience across multiple industries, she has conducted training for more than 3,500 learners.

Forrest Burnson at Software Advice, a firm that helps buyers choose ERP software, recently wrote an article called Cloud ERP vs On-Premise ERP.  The article provides a breakdown of the advantages and disadvantages of each type of ERP system, and how you can determine which system is best for your organization.

ERP Corp is pleased to announce that we have added a Panel Discussion: Modernizing SAP Financials and Controlling to the conference session line up. The panel will be a plenary session, providing an opportunity for every conference attendee to attend and engage in a lively discussion. 

Tip 100 from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:

You can reference SAP Note 552486 for answers to frequently asked questions about Product Cost Controlling (CO-PC). Process orders provide you with extra functionality, such as phases and process instructions for process industries. 

The Online Service System (OSS) contains a database of useful information and advice on fixes for SAP system issues, consulting notes, and frequently asked questions. OSS Note 552486 contains advice on 14 SAP Controlling frequently asked questions. In this tip, we'll discuss how to access OSS Note 552486 adn we'll go over the note's first couple of questions and answers. 

SAP Press Book

100 Things You Should Know About Controlling with SAP

by John Jordan

Learn More Expert Tips: 100 Things You Should Know About Controlling with SAP

SAP Material Ledger has two main functions:

Carry inventory in up to two additional valuations and actual cost as we explain in detail below:

How Rockwell Automation Optimized its SAP Product Costing

By Chris Karch

Learn how Rockwell Automation, a global provider of industrial automation, power, control and information solutions, supports its SAP costing requirements. 

Electronic Bank Statement & Lockbox in SAP ERP: How is the lockbox file different from the electronic bank statement file?

By Lennart Ullmann and Claus Wild

How is the lockbox file different from the electronic bank statement file?

The lockbox file contains the remittance information the customers have sent to the bank, for example amount and number by invoice. That level of payment information allows easy reconciliation and clearing of open items in SAP Accounts Receivable. It is normally used for check payments only.

Within the electronic bank statement file you can have various types of payment transactions. The remittance information in the electronic bank statement file is limited and provides you with the consolidated amount paid by the customer. It is possible to use only one of these services, or both in combination, depending on the company’s needs.

When using lockbox and electronic bank statement it is important to set up the posting rules in SAP correctly to avoid incorrect postings. The main lockbox program will debit the bank clearing account for accounts receivables and post a credit entry to the bank clearing account for incoming checks (lockbox). In a second posting area, the program will debit the bank clearing account for incoming checks and clear open items in the customer accounts. The remaining open items on the bank clearing account for accounts receivables will be cleared through the electronic bank statement. The electronic bank statement will debit the main bank account and credit the bank clearing account for accounts receivable.

Excerpt from Electronic Bank Statement & Lockbox in SAP ERP by Lennart Ullmann and Claus Wild.

Get an updated approach to cost center, project and internal order planning in SAP in this video presentation with slides from SAP Controlling 2013 by Janet Salmon, Chief Product Owner for  SAP Management Accounting

In this SAP Controlling 2013 interview, Jon Reed of Jon ERP and Julian Delvat of Alta Via Consulting discuss SAP Controlling and HANA.

In this SAP Controlling 2013 interview, Jon Reed of Jon ERP and Martin Munzel of Espresso Tutorials discuss the future of SAP e-books.

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The Controlling 2012 conference is quickly approaching and will take place September 24-25, 2012 in San Diego. As a preview of the excellent SAP training you will receive, we are releasing two set of presentation slides in advance of the conference. We released the first yesterday, “The impact of SAP HANA: Revolutionary changes for your SAP Controlling data?”. The second, will be presented by John Jordan and is called “Analyze your production costs and variances with SAP standard reports.”

There have been a number of conference agenda content and networking updates. Thank you for all of your excellent suggestions. Here are a few updates that I think you will be interested in.

The Future of SAP Controlling and Financials functionality: An exciting and innovative pre-conference session that will give conference attendees the opportunity to:

Over the past several years I've seen a growing need for an SAP Controlling community, where management accounting professionals have a venue to share knowledge, best practices, insight, perspectives, and opportunities.

SAP HANA Video Blog

This video blog features Vijay Vijayasankar of IBM, courtesy of Jon Reed of Diginomica and provides a case-study of how SAP HANA provides real-time AR, AP, and inventory data.