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Call for Nominations: 2017 Controlling Community Awards

COCommunityAwardsNominations are now open for the annual SAP Controlling Community Awards. The awards recognize individuals who have made outstanding contributions to our SAP Controlling Community. The awards highlight the important contributions that SAP users, developers, and consultants have made to the business critical field of management accounting.

Members of the global SAP Community are invited to submit their nomination by August 15, 2017. Email This email address is being protected from spambots. You need JavaScript enabled to view it. to nominate your choice.

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Networking Opportunities at Controlling 2017

MainImageBlog250One of the most important aspects of Controlling 2017 is the opportunity to network with the SAP Controlling community. Participants will have the opportunity to share knowledge, best practices, insight, perspectives, and opportunities in a relaxed, community atmosphere. There are many ways to connect with your fellow Controlling 2017 conference attendees. Here are a few Controlling 2017 networking highlights:

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Frequently Asked Questions: SAP S/4HANA Finance – From Batch to Real-Time

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On June 29 members of the SAP Controlling Community gathered for a webinar on SAP S/4HANA Finance – From Batch to Real-Time presented by Janet Salmon and Birgit Oettinger, SAP SE. In this blog post, Janet Salmon addresses frequently asked questions from the webinar.

 

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Webinar Recording Now Available: SAP S/4HANA Finance – From Batch to Real-Time

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On June 29 members of the SAP Controlling Community gathered for a webinar on SAP S/4HANA Finance – From Batch to Real-Time presented by Janet Salmon and Birgit Oettinger, SAP SE.

 

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Activity Type Post Blog Series Final Recap

TomKingOver the last seven weeks expert Tom King has shared detailed information on SAP activity types . This blog post provides a recap and link to each post in the series.


Activity Postings Part 1: Activity Types an Overview

My company began its journey with SAP back in 2007, and I was a charter member of the FICO team because of my work with product costing in our legacy world. I quickly discovered the way SAP handles costing and Controlling is different. The concepts were familiar, but the structures and processes were not. One of the first items that I ran into was the activity type.  Ah, I thought, a familiar concept!

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Activity Postings Part 2: Category 1 Activity Types and Posting

Our journey through activity type postings begins with activity type category 1 (manual entry, manual allocation).  I think of category 1 as the vanilla ice cream of posting activity. This is the most common and straightforward method to use and understand. Activity types defined with this category must be directly posted to a cost center and at the same time have a receiver cost object 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 is 1.

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Activity Postings Part 3: Category 2 Activity Types and Posting

Category 2 activity types are for indirect determination and indirect allocation.  If category 1 activity types are vanilla ice cream, category 2 activities are more like hot fudge sundaes.  There is a lot of power built in to how postings are made with these activity types.

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

Previously, 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 Part 5: Category 3 Activity Types and Posting

We have gone into a lot of detail on how indirect activity allocation cycles work with category 2 (indirect determination, indirect allocation) are used.  The main takeaway from category 2 type activities is that the quantity of activity posted is calculated based on information derived from the receiver cost objects.  You either don’t know or find it difficult to determine how much activity should be posted.  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.

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Activity Postings Part 6: Category 4 Activity Types and Posting

Category 4 activity types are unique in that they do not allow any sort of allocation at all.  They are manually posted like category 1 and category 3 activity types, but that is the extent of it.  The activity stays in the cost center.  You might be saying to yourself, “Why have an activity type that cannot allocate costs between cost objects?  Isn’t that the main purpose of the activity type?”

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Activity Postings Part 7: Category 5 Activity Types and Posting

We come to the end of our tour of activity type posting with category 5 (Target=actual allocation).  This one is the low-fat frozen yogurt of activity types.  It tastes great, but you don’t have to work as hard to keep a trim figure.  This works similarly to the category 2 activity type, but does not require an indirect activity allocation cycle in order to post the activity.

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Deloitte Experts Speaking at Controlling 2017


ConferenceNetworking400The Controlling 2017 conference features several Deloitte experts on the speaker roster. Learn more!


Bill Blakefield is a Senior Consultant with Deloitte and is a SAP Finance, S/4 HANA, Business Intelligence, and HANA Analytics generalist, with practical experience using and implementing SAP leading edge technologies. He's been an Architect responsible for designing, planning and directing Finance and Business Intelligence implementation projects. His experience includes developing Self-Service reporting programs and enabling data in HANA. He's also participated in multiple SAP mergers, implementations, and upgrades. Bill holds a Bachelor's degree in Economics and an MBA with an accounting concentration from Loyola University. He is an active CPA in the State of Maryland.

Learn more about Bill's session: SAP HANA Analytics for Finance and Controlling.

Tanya Duncan is a Senior SAP FICO Consultant with Deloitte, the world's largest private professional services firm. She previously worked for Owens Corning, a Fortune 500 global building materials company in Toledo, OH. She is experienced in global SAP deployments across Consumer Products, Energy, and Life Sciences industries. Tanya authored The Essential SAP Career Guide, a beginner's guide to SAP careers for students and professionals, and Practical Guide to CO-PC (Product Cost Controlling). Her third publication, The Essential SAP Career Guide: Hitting the Ground Running was released in 2016.


Learn more about Tanya's session: Introduction to SAP Controlling configuration.

Alok Gupta is an experienced leader and manager with expertise in combining business, finance, and technology to shape and deliver positive changes across an organization, while ensuring alignment with executive goals. He is a recognized thought leader in the field of Activity Based Costing, Profitability Analysis, Enterprise Analytics, and Reporting. Alok is deeply involved with SAP in the ongoing design and evolution of the SAP S/4HANA On Premise Enterprise Solution, SAP Simple Finance, Central Finance, and Central Journal deployment. He has delivered innovative SAP business solutions across a wide variety of industries and competencies over the last 13 years. He is an empowered executive with strong international program management experience across a variety of Fortune 500 enterprises.


Learn more about Alok's session: Best practices for overhead accounting with multiple activity types and primary cost component split.

Andrei Kholodov is a Senior Specialist with Deloitte Consulting.  As a CPA, he leverages his previous experience in financial accounting and audit to deliver timely, high quality solutions built on a foundation of broad SAP knowledge.  Some of his recent projects include CO-PC SME at a global life science company, a CO lead at a consumer product manufacturer, and a CO-PS and FI-AA SME at a leading US food service distributor.


Learn more about Andrei's session: Best practices for transfer price calculation and reporting in FI and CO-PA.

Sateesh Minnikanti is a Cost and Management Accountant (CMA) extensive industry experience in cost accounting, accounting, SAP FI/CO implementations. He has been with Deloitte Consulting for 6 years and specializes in solutions for product costing, material ledger, and COPA.

 

Learn more about Sateesh's session: Best practices for overhead accounting with multiple activity types and primary cost component split.

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How do you unlock new value for your business? By doing something new. Whether you need to develop new digital capabilities, expand your cloud strategy, enhance cybersecurity, or pursue full-blown transformation, Deloitte and SAP can help you do something new. Contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. to schedule a meeting. www.deloitte.com/sap.

 

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SAP Controlling Tip 100: Frequently Asked Questions

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

You can reference SAP Note 552486 for answers to frequently asked questions about Product Cost Controlling (CO-PC). Process orders provide you with extra functionality, such as phases and process instructions for process industries. 

The Online Service System (OSS) contains a database of useful information and advice on fixes for SAP system issues, consulting notes, and frequently asked questions. OSS Note 552486 contains advice on 14 SAP Controlling frequently asked questions. In this tip, we'll discuss how to access OSS Note 552486 adn we'll go over the note's first couple of questions and answers. 

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Activity Postings 7: Category 5 Activity Types and Posting

TomKingWe come to the end of our tour of activity type posting with category 5 (Target=actual allocation).  This one is the low-fat frozen yogurt of activity types.  It tastes great, but you don’t have to work as hard to keep a trim figure.  This works similarly to the category 2 activity type, but does not require an indirect activity allocation cycle in order to post the activity.


Instead, all that is required is that you run transaction KNMA in order to make the postings.

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“How can this be?”, you might ask.  KNMA looks at the amount of receiver activity that is posted and then determines from the planned allocation how much of the allocated activity should be posted.  It’s as simple as that.  I am going to show you two different examples of how this works.  First, let’s look at activity that is planned using a fixed allocation quantity.

In our category 2 examples, the planned activity allocation was planned as variable.  That means that the quantity of activity to post was based on some receiver factor associated with an actual posting.  For fixed allocations, the total planned quantity of activity should be posted regardless of how much of the receiver is posted.  Let’s see how this works.  The receiver activity MACHHR is planned in three cost centers (RCV5A, RCV5B, and RCV5C), and the price of the activity type in each of those cost centers is made up of both costs that are directly assigned in the manufacturing cost center as well as indirect support costs that must be allocated from other support cost centers.  The indirect support costs are allocated in planning from cost center SND5A, activity type CATEG5.  The planned MACHHR activity and the CATEG5 activity allocated for the three cost centers are as follows:


• RCV5A: MACHHR – 8,000 HR and 50,000 units of CATEG5 allocated – fixed
• RCV5B: MACHHR – 16,000 HR and 30,000 units of CATEG5 allocated – fixed
• RCV5C: MACHHR – 24,000 HR and 40,000 units of CATEG5 allocated – fixed

KP06 layout 1-102 is used for the manual activity allocation plan.  In this case, we see that the allocation is planned as fixed rather than variable. 

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This is done for all three of the receiving cost centers, and a total of 120,000 units of CATEG5 have been allocated from cost center SND5A.


Let’s look at the plan for cost center SND5A.  Note that because we intend to do a fixed allocation, we have decided to plan the costs as fixed rather than variable.  This does not appear to be a requirement, but because the actual allocation will end up being the same as the planned activity, it makes sense for the costs to be fixed as well.
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When running KSPI to generate the costs, the activity price will be 100% fixed.
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During period 4 (April), 500 hours of MACHHR was posted in RCV5A, 700 in RCV5B, and 1,200 in RCV5C.  Prior to running KNMA, the Cost Center Target/Actual/Variance report shows this for the four cost centers: SND5A,
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RCV5A,
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RCV5B,
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and RCV5C.
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The targets for the allocations for each of the receiver cost centers are not based on the amount of the MACHHR activity posted, but instead are based on the amount of planned MACHHR activity.  This is because the allocation is fixed instead of variable.


Next, we will run KNMA to post the CATEG5 activity in SND5A.

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As a part of running KNMA, the operating rate is calculated.  The operating rate determines how much activity will be posted in the sending cost center.  Because this is a completely fixed allocation, the operating rate should be 100%, meaning that all the planned activity will be posted.

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In case you are wondering about the operating rate for MACHHR in the three receiving cost centers, that is not calculated during the KNMA run, but instead is determined from the actual activity posting divided by the planned amount.  This is because MACCHR is a category 1 activity type.


The resulting Cost Center Actual/Target/Variance report now shows the result of the CATEG5 activity postings and allocation.  First, SND5A shows that the full amount of activity was allocated out.

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It did not matter how much of the receiving activity was posted because this was a fixed allocation.  The receiver cost centers show the result of the allocation.  First RCV5A.

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Next, RCV5B

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and RCV5C.

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And that is all there is to posting category 5 activities.  This is the simplest type of automated posting and can be a very powerful tool.


I have one more example to go over, and then we will be done with the activity type tour.  If you remember from the blog posts of the category 2 activity types, I indicated we would be revisiting one of the examples.  I included an example where the MACHHR activity posting was the receiver tracing factor, and we calculated the weighting factors for the sender activity using the planned allocation quantities.  Well, guess what! We could have done the exact same thing using category 5 activity types with a variable planned allocation and saved ourselves the trouble of creating an indirect activity allocation cycle.  Let’s see how this works.  The sender cost center is SND5B, and the three receiver cost centers are RCV5D, RCV5E, and RCV5F.  I used the exact same plan as for the fixed allocation example, except the planned allocations are now variable.


The planned MACHHR activity and the CATEG5 activity allocated for the three cost centers are as follows:
• RCV5D: MACHHR – 8,000 HR and 50,000 units of CATEG5 allocated – variable
• RCV5E: MACHHR – 16,000 HR and 30,000 units of CATEG5 allocated – variable
• RCV5F: MACHHR – 24,000 HR and 40,000 units of CATEG5 allocated – variable

Using RCV5D as the example, note that the allocation is planned as variable instead of fixed. 

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This is done for all three of the receiving cost centers, and a total of 120,000 units of CATEG5 have been allocated from cost center SND5B.

Let’s look at the plan for cost center SND5B.  Now the costs are planned in the variable column.

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When running KSPI to generate the costs, the activity price will be 100% variable.

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During period 4 (April), 500 hours of MACHHR was posted in RCV5D, 700 in RCV5E, and 1,200 in RCV5F.  Prior to running KNMA, the Cost Center Target/Actual/Variance report shows this for the four cost centers: SND5B,

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RCV5D,

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RCV5E,

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and RCV5F.

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The targets for the allocations for each of the receiver cost centers are entirely based on the posting of the receiver activity MACCHR.  If you refer back to the category 2 activity type example in the previous blog post, you will see the same results.
Next, we will run KNMA to post the CATEG5 activity in SND5B.  If we look at the results of the calculation we see that the operating rate for SND5B/CATEG5 is not 100% like we saw before, but instead is 64.37%. This is based on the actual quantity of MACHHR that was posted in all the receiver cost centers.  This percentage times the planned quantity for the period determines the total quantity being posted.

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The Cost Center Actual/Target/Variance report shows the following results.  Compare this to the previous fixed allocation example to see the difference.  Then compare them to the category 2 activity type example which used receiver activity as the tracing factor.

First, let’s look at SND5B and see what was posted for CATEG5.

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Note that the actual activity posted reflects the activity operating rate that was displayed for KNMA.  The receiving cost centers will show the results of the variable allocation.  First, look at RCV5D,

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and then, RCV5E

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and RCV5F.

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Since this last use of Target=Actual indirect activity allocation is so simple, you may wonder why I showed you a similar example using category 2 activity types.  The reason is because that is what my company has been using for doing our activity allocations!  In our first implementation back in 2008, we originally only used KNMA for doing our activity allocations because we were planning fixed allocations.  When we wanted to move to doing variable allocations, we were shown KSC1 and KSC5 and, of course, we were able to make that work.  What we didn’t know (and I am including our consultants in the “we”) was that KNMA also worked with variable allocations.  I’m sure there is a lesson in there somewhere, but I’ll let you determine what that is.


That ends our journey through activity type postings.  My intent was to help clarify some of the mystery concerning activity types. Hopefully, you have found some useful information that will help you find the best ways to use activity types in your implementations, and maybe you can even find a way to automate some of the manual work currently being done.

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Learn more about Controlling 2017 exhibitor TruQua

ERP Corp is pleased to announce that TruQua will exhibit at the Controlling 20177 conference. 

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Learn more about Controlling 2017 Silver Sponsor BlackLine

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ERP Corp is pleased to announce that BlackLine is a silver sponsor of the Controlling 2017 conference. They will sponsor the official Controlling 2017 conference notebook. 

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