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Activity Postings 4: Category 2 Activity Types and Posting – Part 2

TomKingPreviously, we discovered how to automate activity type postings using the indirect activity allocation cycle and category 2 activity types.  The example chosen was to use a statistical key figure which was posted to the receiver cost centers as the means for calculating the sender activity type quantities.  This still required some manual postings for the statistical key figure, but the calculation of the activity type quantity and the actual postings were handled automatically when running the cycle.

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Activity Postings 3: Category 2 Activity Types and Posting

 

TomKing

Category 2 activity types are for indirect determination and indirect allocation.

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Activity Postings 2: Category 1 Activity Types and Posting

TomKingLet's start with activity type category 1 (manual entry, manual allocation). This is the most common and straightforward method to use and understand.  Activity types defined with this category must post directly to a cost center and at the same time have a receiver cost object for the allocation assigned.  Look at the definition of activity type CATEG1 below.  In this case, the actual allocation category is left blank, which means that it will be the same as the plan activity type category.  For CATEG1, that means the actual category will be 1.

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SAP Controlling Tip: How to create an internal order budget

ExclusiveContentBlog250Tip 14 from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:

You can use internal order budgeting to control actual expenditures by activating availability control. 

An internal order budget represents funds approved by management. A budget is maintained at either an overall or annual level. You can activate availability control, which can issue warning or error messages based on defined tolerances. Let's look at how to create an internal order budget and how to activate availability control.


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You can maintain a budget profile with Transaction OKOB or via the following IMG menu path: Controlling • Internal Orders • Budgeting and Availability Control.

Double-click a budget profile to display the the internal order budget profile. Activation type 1 indicates automatic activation of availablity control during budget allocaiton. If the Overall checkbox is selected, availability control checks against the overall budget. If it isn't selected, availaiblity control checks against the annual budget. Availability control works with controlling area currency, unless you select the Object Currency checkbox. You can assign the budget profile to an order type with Transaction KOAB or via the first menu path.

You can maintain availability control tolerances via the following IMG menu path: Controlling • Internal Orders • Budgeting and Availability Control • Define Tolerance Limits for Availibility Control

Left-click then right-click in an action field and selct posible entries to display the avabilty control and tolerance limits screen.

The action field defines the messages and emails the system will send at specific degress of budget overrun. In this example, when the budget is nearly consumed at 95%, a warning is issued with an automatic email to the persons responsible. Specify a budget manager with Transaction OK14, or the system will issue an error message. With a budget overrun at 105%, an error message is issued. 

You can enter an order budget with Transaction KO22 or via the following menu path: Accounting • Controlling • Internal Orders • Budgeting • Original Budget.

Keep reading in Things You Should Know About Controlling with SAP (2nd Edition)Use coupon code CTLSP10 for 10% off on www.sap-press.com.

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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 S/4HANA® Finance – From Batch To Real-Time

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Finance professionals and Controllers traditionally face increased workloads at the end of every period, and especially at year-end. Batch jobs need to be started and results monitored and analyzed. Reliable information showing the complete picture is only available after the period close process is completed. For companies with high work in process, this can mean that there are thousands of dollars sitting on projects awaiting settlement.



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SAP Controlling Tip: Understanding Process versus Production Orders

JJordan400ResizedTip 50 from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:

Process orders provide you with extra functionality, such as phases and process instructions for process industries. 

If you use production orders, the system transfers a routing and a bill of material (BOM) into the master data of the order header. If you’re manufacturing on the basis of process orders, the system uses the master recipe and associated materials list. The difference occurs because process industries manufacture in phases, converting initial liquid batches into consumable batches, which are then bottled and packaged.

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Material price determination setup in SAP Material Ledger

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The material price determination indicates how the valuation of a material should occur after each business transaction for a material relevant for valuation. If SAP Material Ledger is active, this field has to be set up in the material master using an appropriate combination of price control and material price determination. If SAP Material Ledger is activated for a valuation area, the accounting 1 view looks slightly different than the regular screen without a material ledger. Additional fields become available when using SAP Material Ledger or split valuation.

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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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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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