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Credit Control Areas in ECC are called Credit Segments in S/4HANA.
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.
Let's look at Universal Parallel Accounting with regard to Inventory Accounting and explain the changes in:
SAP GR/IR performs a three-way match between:
You use the GRIR clearing account to record the offset of the GR and IR.
When fully processed, the postings are displayed in the clearing account balance.
Clearing is performed at the PO line item level based on the quantity entered.
You write off small differences with Transaction MR11 or via menu path:
Logistics • Materials Management • Logistics Invoice Verification • GR/IR Account Maintenance • Maintain GR/IR Clearing Account
Before maintaining the GR/IR clearing account, you should establish that no more GRs or IRs are expected for the PO item. If the invoiced quantity is more than the delivered quantity, the system expects another GR. If the invoiced quantity is less than the received quantity, the system expects another invoice.
If the GR/IR clearing account differences are not cleared by a further GR or credit memo or an invoice or return delivery, you must maintain the GR/IR clearing account manually.
The price variance and exchange rate variance are calculated.
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
When I was a charter member of my company's SAP FICO product costing team, the first items I encountered were activity types. I discovered that activity types are not cost drivers but instead allocate costs from cost centers to cost objects.
First, in this article, let's create an activity type with the assigned fields.
You create an activity type with the Manage Activity Types app (SAP Fiori ID F1605A) to display activity types master data, create new activity types, and manage existing ones.
You can also use SAP GUI Transaction KL01 and assign a unit of measure as shown in Figure 1.
Figure 1 Create Activity Type Basic Data Tab
In this example, we assign KWH for electricity consumption, or you could assign HR for machine hours.
You next assign a secondary cost element type 43 (internal activity allocation) as shown in Figure 2.
Figure 2 Assign Secondary Cost Element
The cost element identifies the cost, crediting the sender cost center and debiting the receiver cost object.
You next assign an AType (Activity Type) category as shown in Figures 3 and 4.
Figure 3 AType Category 1
Figure 4 AType Category 2
The category defines the method you use for planning as described in the red text.
You enter the Price indicator as shown in Figures 5 and 6.
Figure 5 Price Indicator 1
The price indicator determines if the value is calculated based on cost element postings, see red text.
Figure 6 Price Indicator 5
Now that we've introduced activity types, let's look at more allocation activity categories. We'll explore each of the five categories in detail in the following blogs.
An accrual order enables you to monitor period-related accrual calculation between expenses posted in Financial Accounting and Controlling.
A cost center is master data that identifies where the cost occurred. A responsible person assigned to the cost center analyzes and explains cost center variances at period-end.
Fixed assets are company-owned, long-term tangible assets, such as forms of property or equipment. These assets make up its day-to-day operations to generate income. Being fixed means they can't be consumed or converted into cash within a year.
An activity type identifies activities provided by a cost center to manufacturing orders. The secondary cost element associated with an activity type identifies the activity costs on cost center and detailed reports
An allocation structure allocates the costs incurred for a sender by cost element or cost element group, and it is used for settlement and assessment. An assignment maps a source cost element group to a settlement general ledger account.
While there can only be one cost center standard hierarchy, you can create as many alternative hierarchies as you like. You create an alternative hierarchy by creating cost center groups
Automatic account assignment allows you to enter a default cost center per cost element within a plant with Transaction OKB9.
Availability control enables you to control costs actively by issuing warnings and error messages when costs are incurred.
A bill of material (BOM) is a structured hierarchy of components necessary to build an assembly. BOMs together with purchasing info records allow cost estimates to calculate material costs of assemblies.
You use the controlling area currency for cost accounting. You specify the controlling area currency when defining the controlling area in customizing for Controlling . You can assign more than one company code with different currencies to a controlling area.
A cost center is master data that identifies where the cost occurred. A responsible person assigned to the cost center analyzes and explains cost center variances at period end.
A cost component identifies costs of similar types, such as material, labor, and overhead costs by grouping together cost elements in the cost component structure.
Cost component groups allow you to display cost components in standard reports. In the simplest implementation, you create a cost component group for each cost component and assign each group to a corresponding cost component. You assign cost component groups as columns in cost estimate list reports and costed multilevel BOMs.
The cost component split is the combination of cost components that makes up the total cost of a material. For example, if you need to view three cost components (material, labor, and overhead) for your reporting requirements, the combination of these three cost components represents the cost component split.
You define which cost components make up a cost component split by assigning them to a cost component structure. Within the cost component structure, you assign cost elements and origin groups to cost components.
Each cost component is assigned to a cost component view. When you display a cost estimate, you can choose a cost component view, which filters the cost components displayed in the cost estimate.
Cost elements are included as part of a general ledger account. Primary cost elements identify external costs, while secondary cost elements identify costs allocated within controlling, such as activity allocations from cost centers to manufacturing orders.
A cost estimate calculates the plan cost to manufacture a product or purchase a component. It determines material costs by multiplying BOM quantities by the standard price, labor costs by multiplying operation standard quantities by plan activity price, and overhead by costing sheet configuration.
A costed multilevel BOM is a hierarchical overview of the values of all items of a costed material according to the material’s costed quantity structure (BOM and routing). You display a costed multilevel BOM on the left side of a cost estimate screen. You can also view a costed multilevel BOM separately with Transaction CK86_99.
Costing BOMs are assigned a BOM usage of costing and are usually copied from BOMs with a usage of production. You can make adjustments to costing BOMs if you require them to be different from production BOMs. With system-supplied settings, standard cost estimates search for costing BOMs before production BOMs.
The costing lot size should be set as close as possible to actual purchase or production quantities to reduce lot size variance. Unfavorable variances may result if you create a production order for a quantity that is less than the costing lot size. You need setup time to prepare equipment and machinery for production of assemblies, and that preparation is generally the same regardless of the quantity produced. Setup time spread over a smaller production quantity increases the unit cost. This also applies to externally procured items because vendors typically quote higher unit prices for smaller quantities.
A costing run is a collective processing of cost estimates, which you maintain with Transaction CK40N.
A costing sheet summarizes the rules for allocating overhead from cost centers for cost estimates, product cost collectors, and manufacturing orders. The components of a costing sheet include the calculation base (group of cost elements), overhead rate (percentage rate applied to base), and credit key (cost center receiving credit).
The costing type determines if the cost estimate can update the standard price.
The costing variant contains information on how a cost estimate calculates the standard price. For example, it determines if either the purchasing info record price is used for purchased materials, or an estimated price is manually entered in the Planned price 1 field of the Costing 2 view.
The currency type identifies the role of the currency such as local or global.
Demand management involves planning requirement quantities and dates for assemblies, as well as defining the strategy for planning and producing/procuring a finished product.
Dependent requirements are caused by higher-level dependent and independent requirements when running MRP. Independent requirements, created by sales orders or manually planned independent requirement entries in demand management, determine lower-level dependent material requirements.
Detailed reports display cost element details of manufacturing orders and product cost collectors. You can drill down on cost elements to display line-item reports during variance analysis.
You maintain distribution rules in settlement rules in manufacturing orders and product cost collectors.
As of SAP S/4HANA release 2022, event-based processing is available, where goods movements and confirmations represent events that trigger the calculation of overhead according to the costing sheet. Then, depending on the status of the order, this triggers either the posting of a journal entry for the work in process (WIP) or the cancellation of any existing WIP and the calculation of production variances.
External processing of a manufacturing order operation is performed by an external vendor. This is distinct from subcontracting, which involves sending material parts to an external vendor who manufactures the complete assembly via a purchase order.
A goods issue is the movement (removal) of goods or materials from inventory to manufacturing or to a customer. When goods are issued, it reduces the number of stock in the warehouse.
GR/IR is the SAP process to execute the three-way match- purchase order, Material Receipt, as well as vendor invoice. You use a clearing account to record the offset of the Goods Receipt (GR) and Invoice Receipt (IR) postings. As soon as completely processed, the postings in the cleaning account balance.
An internal order monitors costs and revenue of an organization for short- to-medium-term jobs. You can carry out planning at a cost element and detailed level, and budgeting at an overall level with availability control.
Long-term planning allows you to enter medium- to longer-term production plans, and simulate future production requirements with long-term MRP. You can determine future purchasing requirements for vendor RFQs, update purchasing info records, and transfer planned activity requirements to cost center accounting.
Margin Analysis is the refined version of Account-based COPA. The Universal Journal combines financial and managerial accounting and directly records all dimensions, including custom fields. Margin Analysis provides consistent financial information without any reconciliation needs along with a financial audit trail. All innovations developed for the Universal Journal are immediately available within Margin Analysis. A consistent approach ensures common usage of ledgers, currencies, valuations, predictions, and simulations, as well as their availability in planning and reporting.
Master data is information that stays relatively constant over long periods of time. For example, purchasing info records contain vendor information such as a business name, which usually doesn’t change.
A material master contains all the information required to manage a material. Information is stored in views, each corresponding to a department or area of business responsibility. Views conveniently group information together for users in different departments, for example, sales and purchasing.
A process order is a manufacturing order that is used in process industries. A master recipe and materials list are copied from the master data to the order. A process order contains operations that are divided into phases. A phase is a self-contained work-step that defines the detail of one part of the production process using a primary resource.
In process manufacturing, only phases are costed, not operations. A phase is assigned to a subordinate operation and contains standard values for activities, which are used to determine dates, capacity requirements, and costs.
A procurement alternative represents one of a number of different ways of procuring a material. You can control the level of detail in which the procurement alternatives are represented through the controlling level. Depending on the processing category, there are single-level and multilevel procurement alternatives. For example, a purchase order is single-level procurement, while production is multilevel procurement.
A production order is used for discrete manufacturing. A BOM and routing are copied from master data to the order. A sequence of operations is supplied by the routing, which describes how to carry out work-steps.
An operation can refer to a work center at which it is to be performed. An operation contains planned activities required to carry out the operation. Costs are based on the material components and activity price multiplied by a standard value.
Product drilldown reports allow you to slice and dice data based on characteristics such as product group, material, plant, cost component, and period. Product drilldown reports are based on predefined summarization levels and are relatively simple to setup and run.
Production variance is a type of variance calculation based on the difference between net actual costs debited to the order and target costs based on the preliminary cost estimate and quantity delivered to inventory. You calculate production variance with target cost version 1. Production variances are for information only and are not relevant for settlement.
A production version determines which alternative BOM is used together with which task list/master recipe to produce a material or create a master production schedule. For one material, you can have several production versions for various validity periods and lot-size ranges.
When raw materials are valued at the standard price, a purchase price variance will post during goods receipt if the goods receipt or invoice price is different from the material standard price.
A profit center receives postings made in parallel to cost centers and other master data, such as orders. Profit Center Accounting (PCA) is a separate ledger that enables reporting from a profit center point of view. You normally create profit centers based on areas in a company that generate revenue and have a responsible manager assigned.
Costing-based profitability analysis enables you to evaluate market segments, which can be classified according to products, customers, orders (or any combination of these), or strategic business units, such as sales organizations or business areas concerning your company’s profit or contribution margin.
Transaction ME20 ia a subcontract stock overview and requirments list. You enter a material or vendor and you will see the stocks and the requirements. Based on this info you can create deliveries to supply stock to the vendor as needed.
A purchasing info record stores all of the information relevant to the procurement of a material from a vendor. It contains the Purchase Price field, which the standard cost estimate searches for when determining the purchase price.
A purchase order is a legal contract which binds the supplier to supply materials or services and the purchaser to pay after receiving the materials or services.
A purchase requisition is a request or instruction to Purchasing to procure a quantity of a material or service so that it is available at a certain point in time. There is no legal requirement to carry out the purchase until a purchase order is created. You can record the purchase requisition in commitment management because it may lead to actual expenditure in the future.
The procurement type in the MRP 2 view defines the material as assembled in-house, purchased externally, or both:
The special procurement type can be used to override the procurement type.
The Special Procurement Type field found immediately below the procurement type in the MRP 2 view is used to more closely define the procurement type. For example, it may indicate if the item is produced in another plant and transferred to the plant you are analyzing. Special procurement type 30 indicates the material is procured by subcontracting.
A standard hierarchy represents your company structure. A standard hierarchy is guaranteed to contain all cost centers or profit centers because a mandatory field in cost and profit center master data is a standard hierarchy node.
The standard price in the Costing 2 view determines the inventory valuation price if price control is set at standard (S). The standard price is updated when a standard cost estimate is released. You normally value manufactured goods at the standard price.
You supply component parts to an external vendor who manufactures the complete assembly. The vendor has previously supplied a quotation, which is entered in a purchasing info record with a category of subcontracting.
Target costs are plan costs adjusted by the delivered quantity. For example, if the quantity delivered to inventory is 50% of the plan quantity, target costs are calculated as 50% of the plan costs.
The valuation variant is a costing variant component that allows different search strategies for materials, activity types, subcontracting, and external processing. For example, the search strategy for purchased and raw materials typically searches first for a price from the purchasing info record and then Planned Price 1.
Variance analysis involves comparing actual with target costs and dividing the balance into variance
Let's start with activity type category 1 (manual entry, manual allocation) which is the most common. Activity types defined with this category post directly from a cost center to a receiver cost object.
Look at the definition of activity type CATEG1 as shown in Figure 1. In this case, Actl Acty Type Cat. (Actual Activity Type Category) is blank, which means it is the same as the plan activity type category, or 1 in this example.
SAP Enhancement Pack 4 provides additional functionality for processing outsource manufacturing or subcontracting operations.
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.
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:
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.
Definition
Trading Partner is a term used in trade and commerce and is generally defined as:
One of the two or more participants in an ongoing business relationship.
SAP Material Ledger has two main functions:
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 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.
Several colleagues have asked me questions about integration of MM and FI such as:
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 FICO expert and SAP Controlling speaker Mohamed Elshinnawy answers our question with the following easy-to-understand explanation:
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.
We’ve been working on a project at Woodward to implement SAP Business Planning and Consolidation 10.0, Version for SAP NetWeaver (BPC). This project is part of an overall roadmap aimed at unifying our financial systems across the company, while maintaining more than one ERP.
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.
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.
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.
I’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 explain how the new solution differs from earlier versions and discuss some of my learnings.
The three period-end options you have when you activate SAP Material Ledger are:
Here's more details of each option:
SAP Business Planning and Consolidation, or BPC 10.1, version for SAP NetWeaver and HANA was released into general availability Summer 2014 giving planners some great new features as highlighted in this blog.
This release focuses on usability and NetWeaver platform integration so there is no Microsoft Platform equivalent with the 10.1 release as shown in Figure 1.
Internal orders are cost objects in SAP Controlling. They are temporary cost collectors for short-term projects or events which you can attach to a group.
Cost centers are long term cost objects and belong to a standard hierarchy.
Many companies operate in multiple regions and countries and need to report on their fixed assets based on various legal and valuation frameworks.
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.
Many SAP customers have difficulty planning test scenarios due to a lack of test data.
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:
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.
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.
This book on General Ledger Accounting with SAP S/4HANA offers comprehensive coverage of general ledger specialized topics to cater to various audiences. It imparts accounting knowledge and SAP general ledger functionality with step-by-step instructions on the customizing activities necessary to carry out either a new implementation or a finance transformation project. Throughout this book, we’ve shared real-time practical experiences. This book is structured in a logical sequence of topics, organized into nineteen chapters as follows:
Characteristics 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 (now Margin Analysis) 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 the new feature, you can achieve real-time profitability reporting during the month.
In make-to-stock production manufacturing orders collect costs. Materials are produced based on a production plan by material requirements planning (MRP), not based on customer demand.
Accounting documents are posted throughout the month to both overhead and production cost centers in a plant. These are known as direct postings.
Material price determination determines how the valuation of a material occurs after each business transaction. When SAP Material Ledger is active, this field should be set in the Accounting 1 view with an appropriate combination of price control and material price determination. When SAP Material Ledger is active for a valuation area, the additional fields which become available in the Accounting 1 view are shown in Figure 1.
UST offers three accelerator programs to complement RISE with SAP so you can quickly and reliably achieve transformational change in the cloud.
SAP Material Ledger has two main functions:
Carry inventory in up to two additional valuations and actual cost as we explain in detail below:
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.
My company is in the early stages of moving from SAP ECC 6.0 to SAP S/4HANA.
I thought it would be interesting to give you my initial impressions of what I found out about Controlling in SAP S/4HANA. Since we started out with ECC 6.0, we didn't have to worry about things like classic G/L versus new G/L.
When we first got access to an S/4HANA sandbox for a test drive, this helped me get a much better understanding of how the new system works rather than reading documentation and watching training videos. Here are my initial impressions, which may be useful if you are making the move, or considering it.
Learn how to configure and use asset accounting in SAP S/4HANA.
The book is organized into the following chapters:
Through 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?
SAP templates are often perceived as very complex. Let's dispel that myth and dive into some frequently asked template questions:
Yes. For those unfamiliar with repetitive manufacturing, here's an example: One of our customers was bottling. They have millions of bottles running through, and you don't want to calculate the cost of each one. They are all the same. 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.
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, the 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:
Julien Delvat is Sr Program Manager for Finance Transformation at Google. He has more than ten 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.
Repetitive manufacturing eliminates the need for production or process orders in manufacturing environments with production lines and long production runs. It reduces the work involved in production control and simplifies confirmations and goods receipt postings.
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.
The fiscal year variant defines the fiscal periods and calendar assignments used to post documents in financial accounting.
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.
Cost components group similar cost types together by cost element. Typically:
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:
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.
I often get asked about the difference between a Production Order and a Process Order. When is it beneficial to use one over another?
From a 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.
Janet Salmon's sneak peek of new SAP Smart Accounting webinar recording is now available.
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:
Learn more about RISE with SAP at SAP Controlling 2023 Conference September 17-19, 2023.
One of the major tasks for functional SAP professionals is configuration. You configure SAP to perform properly based on business requirements during the realization phase. On your first SAP project, it can be overwhelming to know where to start when configuring a module.
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.
Logs available in SAP S/4HANA can be used to improve security and compliance. For example:
Read Access Logs and Security Audit Logs
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.
The main takeaway from category 2 type activities in previous blogs is that the quantity of activity posted is calculated based on information derived from receiver cost objects.
What if you do know how much activity should be posted, but don’t want to manually determine how to allocate the posting to other cost objects? That is where category 3 (manual entry, indirect allocation) activity types come in.
Next Blog: Activity Postings 6: Category 4 Activity Types and Posting
Prev Blog: Activity Postings 4: Category 2 Activity Types and Posting – Part 2
Activity type posting with category 5 (Target=actual allocation) works similarly to the category 2 activity type, but does not require an indirect activity allocation cycle in order to post the activity.
Prev Blog: SAP Activity Postings 6: Category 4 Activity Types and Posting
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.
If you experience long run-times during SAP Material Ledger close, this blog is for you.
How much your products cost is essential to determining actual profitability. Yet most decisions are based on the standard cost since it is not easy to determine your actual costs.
SAP Material Ledger Actual Costing bridges this gap. It provides you the ability to capture actual costs by tracking variances at the material level.
Businesses have leveraged Business Planning and Consolidations (BPC) for a year now and are now challenged by working with several new products at the same time, including SAP Business Warehouse (SAP BW) 7.4/7.5, the Enterprise Performance Management (EPM) add-in, version 10.0 SP30 (frontend for standard SAP BPC), and SAP Analysis for Microsoft Office (frontend for embedded SAP BPC) and they need to decide if they need to go to BPC Embedded, Cloud or BPC S/4 HANA Standard.
Writing an effective S/4HANA business case is both a science and an art. As a business and digital transformation specialist, this continues to be my most important takeaway.
The science part is relatively easy to handle. SAP provides you with tools and you probably have your own that you devise and use such as metrics and KPIs which assist you determine the quantitative aspects of what you want out of S/4HANA.
Art is the more difficult aspect since no two customers are alike. You can't use a one size fits all approach. I approach each business case discussion with a minimum set of success factors or criteria. Here are a few of the key components:
Controlling 2013 speaker Julien Delvat was recently named an SAP Mentor for his work with the SAP Controlling Community. Congratulations Julien!
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
Businesses leverage Enterprise Performance Management (EPM) to improve profitability by bringing significant improvement in financial and operational insight. With EPM improved operability and reduction of the cost of ownership with direct integration into SAP, S/4HANA provides integrated analytics solutions.
We use expertise, experiences, best practices, and methodologies using pre-packaged content including starter kits and pre-configured applications.
