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Activity Postings 1: Activity Types Overview

TomKingMy company began its journey with SAP in 2007. I was a charter member of the FICO team because of my work with product costing. I quickly discovered product costing in SAP is different, familiar concepts but not the same structures and processes. The first item I encountered was the activity type.

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SAP Templates Frequently Asked Questions

JulienBlogSAP templates are often perceved as overly complex. Let's dispel that myth and dive into some frequently asked template questions:

 FAQ 1: Do templates work for repetitive manufacturing?

Yes! For those not familiar with repetitive manufacturing, here's an example: One of our customers was bottling. They have millions of bottles running through and you don't really want to calculate the cost of each individual one, they are all the same, right? You can use the product cost selector and then there's a special template environment for the product cost collector. This is useful for the cost of setup or the cost of quality checks.

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FAQ 2: You don't need to input actual quantity with templates, as with KB31N statistical key figures?

Yes, that's correct. You don't have to. You could use either/or, and you have a different way of working between plan and actual. You could use whatever you want. You could use statistical key figures, for instance, number of FTEs is a very frequent one, or square footage, you could also use that, that's very useful. You could also use the logistics information system which is like a database like COPA, and you could collect information there and it's really up to you. You might want to still stick to some plan. 

Looking for more information on SAP templates? Watch this webcast Introduction to SAP Templates presented by Julien Delvat. Watch the recording to discover how to leverage your company’s standard SAP CO templates. You will:

-    Understand the limitations of traditional costing methods

-    Discover business processes

-    Perform driver-based planning for cost center/activity types and business processes

-    Allocate actual costs with operational KPIs

-    Benefit from best practices in CO template setup and maintenance

 

Julien Delvat is Sr Program Manager for Finance Transformation at Google. He has more than 10 years of SAP Controlling experience and started as a developer for CO maintenance and development at SAP Labs France. Julien is a frequent speaker at SAP conferences and is the Chair of the ASUG Managerial Accounting Special Interest Group. He lives in CA with his wife and two children.

 

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SAP Subcontracting

JJ newSAP Subcontracting involves sending components to a vendor where an assembly is manufactured. The vendor returns the completed assembly, and during goods receipt, the components are issued from subcontract inventory. Subcontracting is a purchasing-controlled process. Let's examine the details.

The special procurement type field in the material master MRP 2 view determines if you manufacture a material with the subcontracting process.

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SAP Costing Sheets Allocate Overhead

JJ newThere are 3 methods to distribute overhead costs to the cost of goods sold for the standard price. In increasing level of flexibility and complexity they are:

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 credited during activity confirmation.

Costing Sheets: Costing sheets allow flexibility in allocating overhead across products based on cost elements and origin groups. Manufacturing orders are debited and cost centers credited during period-end overhead calculation.

Templates: Templates allow you more options to base your overhead costs on.

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Controlling 2013 Speaker Profile: Julien Delvat

hdshot jdelvatControlling 2013 speaker Julien Delvat was recently named an SAP Mentor for his work with the SAP Controlling Community. Congratulations Julien!

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SAP Accounting powered by SAP HANA - Frequently Asked Questions

hdshot jsalmonI’ve spent the last six months working with the first accounting customers to validate and implement SAP Accounting powered by SAP HANA. I’ve talked with even more customers about the possibilities of the new solution. SAP Accounting powered by SAP HANA will be made generally available on 1st August 2014. In this blog, I’ll explain how the new solution differs from earlier software versions and discuss some of my learnings.

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Recent Comments
Guest — emy
Great Article..thanks for your valuable posting..It was very informative..i am working in a erp in chennai
Friday, 08 January 2016 06:27
Guest — Tweety
Thanks for your great post.
Thursday, 18 February 2016 23:19
Guest — sravani
Recently, I didnt give lots of consideration to leaving comments on site page articles and have placed comments even much less. Re... Read More
Saturday, 27 February 2016 07:15
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Fundamentals of MM-FI Account Determination

AshishSeveral colleagues have asked me questions about the integration between Materials Management (MM) and Financial Accounting (FI) modules:

- How do postings flow from MM into FI?

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Guest — Mike P
Great article & simple to understand.
Wednesday, 23 August 2017 02:01
Guest — Wolfgang
Thanks for this nice overview of the MM account determination! I am surprised to see in my project work, how often the FICO collea... Read More
Sunday, 10 September 2017 12:47
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Why should you attend SAP Controlling 2018 conference?

Marjorie WThrough my careers as cost accountant, accounting manager, project manager, and education consultant I’ve attended many SAP FICO conferences. My first experience with this particular conference was in 2014. I was impressed with the roster of speakers, the breadth of 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 others.

Where else could you chat over lunch with the legendary Janet Salmon?

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Recent comment in this post
Guest — Dwipanita Sarkar
Thank you for sharing such a nice and interesting blog with us. I have seen that all will say the same thing repeatedly. But in yo... Read More
Tuesday, 27 November 2018 16:28
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What is an SAP Internal Order?

MarjorieWrightBlog250Internal orders are cost objects in SAP Controlling. They act as temporary cost collectors for short-term projects or events. They are not as structured or permanent as cost centers. There is no standard hierarchy for internal orders, however they can be grouped.

To learn more about SAP internal orders and other SAP FICO topics please visit our new SAP FICO Learning Center, please click here

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Guest — Sarah Hill
Amazing stuff! Thanks for such an excellent blog information, really helpful- we must know how can we control sap, there are innum... Read More
Friday, 06 October 2017 07:23
Guest — kailash
i want to subscribe to your blog. What is the procedure & what is the fees if any ?
Friday, 07 September 2018 04:51
vikram
To learn more about SAP internal orders and other SAP FICO topics please visit our new SAP FICO Learning Center, please click here... Read More
Thursday, 24 September 2020 02:10
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SAP Cost Center, Project and Internal Order Planning

hdshot jsalmonGet 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

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When Should I Use An SAP Internal Order?

139 3D Cover Internal Orders

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.

 

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GR/IR (Goods Receipt / Invoice Receipt) Processing

GR/IRoss Christoph 2017R is the SAP process to perform the three-way matchpurchase order, material receipt, and vendor invoice.  You use a clearing account to record the offset of the goods receipt (GR) and invoice receipt (IR) postings.  Once fully processed, the postings in the clearing account balance. 

To learn more about GR/IR and other SAP FICO topics please visit our new SAP FICO Learning Center please click here.

Clearing is performed at the purchase order (PO) line item level based on quantity entered. Price variance and exchange rate variance are calculated.  You can write off small differences using transaction MR11.

Purchase Price Variance
This discussion assumes you are using standard price control (S)  for purchased materials. The quantity and amount on the GR and IR postings are important. You must have posted GR to record purchase price variance (PPV). There is no PPV posting for just IR. There can be additional variance postings on IR after GR is posted for differences between PO price and actual price paid.

When posting GR, the price variance is based on the PO price, unless IR has already been posted, then it is based on actual price paid. If IR has already been posted, the GR will be based on the IR up to the quantity of the IR, after that is will use the PO price again.

After all postings to a PO line item, the net PPV posted will be the difference between the actual price paid and the standard cost of the material.

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Guest — Dwipanita Sarkar
Thank you very much for keep this information
Tuesday, 27 November 2018 16:24
Guest — brong
when i run analyzed GR-IR how can i know from what's suppliers and PO?
Thursday, 27 December 2018 04:37
aaron
Hello, I have an Oustanding Balance in USD on a PO, however when I try to clear the diference the system posted in EUR... How Ca... Read More
Wednesday, 15 April 2020 05:00
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Attributed Profitability Segment - SAP S/4HANA

AnandCharacteristics from a profitability segment can be read and posted to income statement line items based on the best guess principle. This feature was introduced in account-based CO-PA in S/4HANA 1610. You can use drill-down reporting on posted data. Without attributed profitability segments, you must wait until month-end activities such as settlement, allocation and top-down distribution. With this new CO-PA feature, you can achieve real-time profitability reporting during the month.  

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Improve Performance of SAP Material Ledger Closing Cockpit

Ashish Sampat 2018 12 1If you experience long run-times during SAP Material Ledger close, this blog is for you. We explore how to expedite your SAP Material Ledger close.

Knowing how much your products cost is essential to determining actual profitability. Yet most decisions are based on the standard cost of your products since it is not easy to determine your actual costs. Actual costing by SAP Material Ledger bridges this gap. It provides you the ability to capture actual costs by tracking variances at the material level. Let's examine SAP Actual Costing.

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Actual Costing with SAP Material Ledger

JJ newSAP Material Ledger has two basic functions:

        1. Carry material prices in multiple currencies and valuations

        2. Actual costing

 Actual costing generates a material ledger document for all goods movements at the standard price (preliminary valuation). At period-end, an actual price is calculated for each material based on the actual costs of the period. This actual price is called the periodic unit price and can be used for the following at period-end:

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SAP Actual Cost Component Split

JJ new

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.

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SAP Cost Estimates and Procurement Type

JJ newSAP cost estimates determine how the material is sourced by the procurement type. 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 utilize this information.

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Post Purchase Price Variance (PPV) to Purchasing

JJYou typically retrieve the standard price for purchased materials from purchasing info records during a costing run. Purchasing info records store vendor quotations per material as an estimate of 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.

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Fiscal Year Variants in SAP S/4HANA Asset Accounting

Many companies operate in multiple regions and countries and need to report on their fixed assets based on various legal and valuation frameworks.

Parallel Valuation in Asset Accounting

SAP S/4HANA provides the tools and processes to fulfill these parallel valuation requirements. Some of these requirements can be technically challenging to meet, such as when you need to use different fiscal year variants (FY variants) in the different valuation frameworks.

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Add Cost Component Groups to Cost Components

JJ newCost components group similar cost types together by cost element. Typically materials, labor, and 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. Add cost components to standard cost estimate list reports and costed multilevel BOM reports by creating cost component groups and assigning them to cost components.

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