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.

 

 

 

1.1.1        Actual Costing with SAP Material Ledger

SAP Material Ledger inventory valuation includes the following:

    Collecting actual data during the month.

    Determining price: single-level and multi-level prices are based on the type of transaction.

    Calculating periodic unit prices at the month-end.

    SAP Material Ledger collects material movement data during the month and keeps track of materials used for the production of specific goods in production/process orders.

SAP Materials Management in combination with FI tracks goods movements and values at standard cost, while SAP Material Ledger tracks goods movement values at standard and actual costs. You can consider SAP Material Ledger as a second set of books where each material has a record of all goods movements for actual valuation.

1.1.2        SAP Material Ledger closing cockpit

You run SAP Material Ledger closing cockpit every month to perform actual costing using transaction code CKMLCP. The menu path is: AccountingControllingProduct Cost ControllingActual Costing/Material LedgerActual CostingCKMLCP—Edit Costing Run.

The first step is to create a costing run and assign relevant plants. After selecting plant(s), the Material Ledger closing cockpit requires several steps as shown in Figure 1.1

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Figure 1.1: CKMLCP — SAP Material Ledger closing cockpit process steps

    1. Selection: all materials for the given plants are selected.

    2. Sequence Determination: the sequence of costing is established, starting with the lowest level material and going all the way up to the highest-level material and goods movements.

    3. Single-Level Price Determination: prices are calculated for each material.

    4. Multi-Level Price Determination: prices are calculated for the entire production stream.

    5. Revaluation of Consumption: adjustment posting of actual costs at month-end, where all variances are transferred to the receiving object (which can be a material, cost center, internal order, GL Account, etc., depending on where the original consumption occurred).

    6. Post-Closing: all calculations performed in prior steps are posted during this step.

       Multi-level price differences are transferred to the next level.

       Revaluation of consumption is posted to cost objects.

       Inventory is revalued in FI for the period being closed.

    7. Mark Material Prices: this step is optional. You may decide not to use the periodic unit price as a standard for the next month. If so you use the standard price for goods movements and revalues at the periodic unit price only at month-end.

1.1.3       Performance improvement with parallel processing

Large run times and low system performance may become the norm, given that Material Ledger processes large amounts of data in the closing cockpit. Parallel processing can be used to address this performance concern.

As shown in Figure 1.2, you have an option to run SAP Material Ledger close steps on multiple servers.

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 Figure 1.2: CKMLCP – ML Close: Parallel processing on multiple servers

This feature is often referred to as parallel processing. You can see at the bottom of the screen, server group parallel_generators has been selected, with the additional selection of maximum number of parallel processes as 10. This means that, instead of the usual single server, this job will be executed in parallel on 10 servers. This implies there could be a significant (at times, 85-90 percent) performance improvement for this job.

Parallel processing setup requires collaboration with your BASIS team.