ERPCorp helps organizations improve cost visibility through SAP Finance, Controlling, Product Costing, and Material Ledger consulting. We assess your current processes, identify configuration and reporting issues, and work with your team to implement practical improvements.
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Table of Contents
- Profitability Analysis
- SAP Actual Costing
- S/4HANA Transitional Roadmap
- SAP Goods Receipt vs Invoice Receipt
- SAP Internal Orders vs WBS Elements
- SAP Subcontracting
- Glossary
Some of the transformative SAP solutions we provide include:
1. Profitability Analysis
We explain profitability analysis reporting in an easy-to-understand way to improve the accuracy of your product margins.
We first analyze component and purchasing costs to identify issues and recommend improvements to product cost transparency and margin reporting.
For example, we worked with an automotive company to analyze and understand their metal and plastic purchasing costs by linking their purchasing conditions and costs to individual cars. This helped the company understand purchasing cost drivers and assess margins at the individual-car level.
Margin Analysis in SAP S/4HANA supports profitability reporting by product, customer, and other market characteristics using actual accounting line items in the Universal Journal. Reliable analysis depends on appropriate account assignments, configuration, and data quality.
SAP Fiori analytical apps use the SAP data model to support analysis of manufacturing costs at order, work center, and operation level. Examples include the following apps; availability and functions depend on the edition, release, authorizations, and configuration:
- Production Cost Analysis App ID F1780
- Analyze Costs by Work Center/Operation App ID F3331
These apps are explained in our SAP Fiori apps for manufacturing variance analysis.
2. SAP Actual Costing
Does actual costing explain your purchasing and manufacturing costs in a useful way?
We guide you through setting up Actual Costing runs with transaction CKMLCP and explain the calculation results, difference postings, and messages. We review account determination and available closing options with your team before posting valuation adjustments.
For example, we worked with a food processing company to set up an Alternative Valuation Run to derive planned standard costs using actual costs over a 12-month period.
This example used the classic Alternative Valuation Run approach. With Universal Parallel Accounting, ledger-specific runs support single-period and year-to-date actual costing; the applicable process depends on the system configuration and release.
Actual Costing calculates a periodic unit price from the period’s actual costs and differences. Depending on the closing settings, organizations can revalue inventory and consumption. Where supported, the calculated price can also be marked and subsequently released as a future standard price.
Read more about Actual Costing with SAP Material Ledger.
3. S/4HANA Transitional Roadmap
ERPCorp structures engagements around assessment, design, implementation, testing, training, deployment, and ongoing improvement. For SAP Activate projects, we align the work with Discover, Prepare, Explore, Realize, Deploy, and Run.
Our work can include fit-to-standard workshops, conversion or implementation planning, configuration, testing, knowledge transfer, and post-go-live support.
We review and evaluate your current business processes with your users in structured workshops, and provide an overview with documentation of S/4HANA benefits and changes that are required during the transition.
For example, we expanded a client’s cost component structure to provide more detailed cost and profitability reporting. The design was based on the company’s reporting requirements and the supported configuration.
4. SAP Goods Receipt vs Invoice Receipt
GR/IR reconciliation investigates differences between valuated goods receipts and supplier invoices at purchase order item level. F.13 clears eligible matching FI open items. MR11 posts account-maintenance adjustments for eligible differences when no further goods receipts or invoices are expected.
We help your team investigate outstanding balances, identify missing or incorrect documents, and distinguish reconciliation issues from period-end reporting adjustments.
For more information, please click here to access our SAP GR/IR clearing guide.
5. SAP Internal Orders vs WBS Elements
Internal orders and WBS elements provide different ways to track costs for activities and projects.
Internal orders can monitor costs for specific activities, investments, or ongoing purposes in SAP S/4HANA on-premise and Cloud Private Edition. Public Edition uses projects instead of internal orders.
WBS elements organize projects hierarchically and support detailed planning, execution, and cost control. The choice depends on project structure, reporting, budgeting, settlement requirements, and the SAP edition.
We help you evaluate the supported cost objects against your requirements and configure internal orders or projects where appropriate.
For more details, please click here to access our SAP internal orders versus WBS elements.
6. SAP Subcontracting
Subcontracting (SC) in SAP involves sending components to a supplier for processing or assembly. This process allows companies to leverage external expertise or capacity.
A subcontracting arrangement can provide additional manufacturing capacity or access to a supplier’s specialist production capabilities.
You provide components to the subcontractor and receive the completed assembly. At goods receipt, the system normally posts component consumption from stock provided to the supplier. Differences in component consumption can be adjusted at receipt or through subsequent adjustment, as appropriate.
For materials configured for subcontracting, MRP can generate purchase requisitions with item category L or planned orders with subcontracting procurement. Purchasing then converts or processes these proposals into purchase orders. Supplier determination depends on the relevant sourcing master data and configuration.
For more details, please access our SAP subcontracting guide.
From initial system evaluation and strategies to improve your implementation and ongoing support, we guide you through every step of your SAP journey.
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Glossary
Actual Costing
An optional Material Ledger function that collects actual costs and differences and calculates periodic unit prices. Closing settings determine whether inventory and consumption are revalued.
Alternative Valuation Run
A classic Actual Costing approach for calculating alternative or cumulative valuations. With Universal Parallel Accounting, ledger runs provide single-period and year-to-date actual costing.
Bill of Material (BOM)
A structured list of the components and quantities required to manufacture an assembly.
Cost Center
An organizational unit used to collect and monitor costs for an area of responsibility.
Cost Component Split
The breakdown of a product’s costs into categories such as materials, activities, and overhead, according to the cost component structure.
GR/IR
Goods receipt/invoice receipt accounting uses an interim clearing account for related valuated receipts and supplier invoices. Reconciliation investigates differences; FI clearing closes eligible matching open items.
Internal Order
A Controlling object for planning, collecting, monitoring, and, where applicable, settling costs for a specific purpose. It is supported in applicable on-premise and Private Edition systems; Public Edition uses projects instead.
Margin Analysis
SAP S/4HANA’s account-based profitability analysis approach, integrating actual costs and revenues with profitability characteristics in the Universal Journal.
Material Ledger
SAP’s material valuation functionality for currencies and valuation views. It is mandatory in SAP S/4HANA and provides the basis for optional Actual Costing.
ME2O – Subcontracting Stock Monitoring
A classic transaction for monitoring components provided to subcontractors and related requirements. The final character is the letter O. ME2ON provides a newer subcontracting cockpit in applicable releases.
MRP
Material requirements planning calculates procurement proposals from demand, stock, receipts, and planning settings. Proposals can include planned orders and purchase requisitions.
Periodic Unit Price (PUP)
A material’s actual price calculated for a period by Actual Costing, subject to the relevant price determination and closing settings.
Standard Price
A material valuation price used with price control S. Relevant procurement or production differences are recorded separately; supported price-update processes can set a new standard price.
Subcontracting
A procurement process in which components are provided to a supplier that processes or assembles the ordered material.
WBS Element
An element of a project’s work breakdown structure. Account-assignment WBS elements can collect costs and support project planning and control.