SAP Material Ledger - Excerpt: 100 Things You Should Know About Controlling with SAP

SAP Press Book

100 Things You Should Know About Controlling with SAP

by John Jordan

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SAP Material Ledger has two main functions:

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

1. Carry material prices in multiple currencies and valuations

Material inventory values are normally carried in only company code currency. SAP Material Ledger enables you to carry inventory values in two additional currencies/valuations by updating all goods movements in the Material Ledger in up to three currencies or valuations. Currency amounts are translated into foreign currencies at historical exchange rates directly at the time of posting. 

When working on SAP Material Ledger we recommend you work with our ERPCorp SAP experts: 

Learn More about ERPCorp Coaching & Consulting

2. Value inventory at actual costs

Actual costing valuates all goods movements within a period at the standard price (preliminary valuation). All price and exchange rate differences for the material are collected in the Material Ledger.

At the end of the period, 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 PUP and can be used to revaluate the inventory for the period to be closed. You can use this actual price as the standard price for the next period.

You also have the option of not revaluing inventory, and posting the differences to an accrual account.

Actual costing determines what portion of the variance is to be debited to the next-highest level using material consumption. The actual bill of materials enables variances to be rolled up over multiple production levels all the way to the finished product. You can choose to have cost center variances also taken into account. 

This category of ideas describes how multiple valuations and actual costing work, and the material ledger period-end closing process. It also describes the implementation steps needed during production startup. The actual cost component split and deactivating the material ledger are also explained. 

Hear what readers are saying about this book:

• Best SAP shortcuts ever, and it's fun to read
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• My colleagues appreciate me sharing these ideas

I really like the SAP Material Ledger conversion and go-live ideas, they saved me so much time!

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