The Cost Component Split allows for granularity of the cost drivers in your inventory and cost of goods sold. The cost components can be seen in various reports in Product Cost Planning and Material Ledger. However, this breakdown has not been available in the General Ledger before SAP S/4HANA. By utilizing a Custom Enhancement, the Cost Component Split by G/L Account can be available in the ECC system. This will provide suitable transparency about cost drivers in the General Ledger, particularly for companies that do not plan an S/4 conversion for a few years, and also positions them with a Splitting Structure that is compatible for an eventual S/4 Conversion. This functionality can be used to split cost components for COGS accounts as well as Inventory accounts (which means that you can get transparency into how much material stock or Fixed costs are sitting in inventory). Also, this functionality can be used whether a company uses Material Ledger or not (i.e. it can be used for Standard and/or Actual cost components). Watch this pre-recorded live Q&A with FI/CO expert Rogerio Faleiros to learn:
The things to consider when deciding whether to split COGS in the G/L Accounts.
How to map the original COGS account to the Cost Component Split Accounts.
A demo of the Cost Component G/L Split program and how to view the General Ledger postings.
The Reports that can be used to display the COGS documents that have been split.
Speakers:
Rogerio Faleiros, FI/CO Expert, RFERP
Paul Ovigele, FI/CO Expert, ERPfixers
Q: Since Secondary Cost Elements are now G/L Accounts in S/4 HANA, can Secondary Cost Elements be used as the Splitting Accounts?
A: No, only Primary Cost Elements, Non Operating Cost Elements and Balance Sheet Accounts can be used for this.
Q: Does the functionality work with Split Valuation?
A: Yes, the functionality works with Split Valuation.
Q: Can this functionality be used with Cost Based CO-PA?
A: Yes, it can be used with Costing Based CO-PA.
Q:Can this functionality be used in S/4 HANA or ECC alone?
A: Yes it can be used in both. S/4HANA already has standard functionality, however, if there is extra functionality needed (such as Inventory Cost Component Split) then this tool may be needed.
Q: Is Material Ledger Actual Costing needed in order for this functionality to work?
A: Yes it is because the Actual Costing and Cost Component Split is needed.
Q: Do you need HANA for these reports? Or do they exist in the current Material Ledger module?
A: Only ML being active is needed, nit necessarily S/4HANA.
Q: Will this change work with PIR conditions that have Freight/Duty conditions?
A: As long at it is going to Material ledger, then any conditions that are linked to Material ledger cost component split, then it will work.
Q: Are the tools the same as in ECC?
A: Yes, the demo was actually based on ECC EHP7, and also works in S/4 HANA.
Q: What are the ways to automate this process? only run the reports in batch?
A: Yes, you can schedule periodically such as every week. Note that you may need to reverse before doing a reposting.
Q: Does material ledger have to be closed each and will it impact standard cost?
A: No you do not need to close Material Ledger. You can run all the steps of ML without the Posting Close and still simulate the results.
Q: Is this custom functionality simply to cover the cost component split reporting in account based COPA and and universal journal which was already available with costing based COPA in ECC?
A: Yes, the requirement was originally to resolve the issue of moving from CBCOPA to ABCOPA, and therefore to split the cost components so that you can prepare for a transition to S/4HANA. Note that with this functionality the P&L Accounts do not need to be for Accounts Based COPA. In S/4HANA the accounts that are split need to be set up as Primary Cost Elements.
Q: Who do we get in touch with to implement this for consulting opportunity?
A: You can email info@erpfixers.com
Q: In S4/HANA is it running online?
A: The standard functionality in S/4HANA runs online but this functionality does not run online in S/4HANA.
Q: Are the custom tools available in ECC 6.0?
A: It can be used in any system. The only requirement is that you have Material ledger Activated.
Q: Is it a good strategy to implement COGS split now before going to S4/HANA?
A: Yes. Based on all the changes that are introduced with S/4HANA the more that you can prepare for beforehand. If there is a business justifiction for doing it now, then certainly worth it.
Q: The process in ECC is to run reporting we have to run in Batch but sounds like in S4/HANA you can make the system run it automatically with any posting to COGS?
A: The functionality in ECC and S/4 is only batch based (not online).
Q: Would it be helpful to move to account based COPA from costing based COPA in ECC before moving to S4 Hana?
A: Yes, because there is a lot of new functionality introduced with S/4HANA, the more that you can get accustomed to beforehand the better. ABCOPA is one of the minimally disruptive tasks that can be done beforehand.
Q: Is SAP already working on a standard solution for cost comp split in S4 Hana to be covered within a support package?
A: If the question is on whether SAP is going to bring this functionality as standard into ECC, the answer is no. If the question is on whether SAP has this functionality as standard in S/4HANA, then the answer is yes, but without some of the features such as Cost Component Split for Inventory Account, Separate G/L Accounts for Fixed and Variable and not needing a Primary Cost Element for the COGS Splitting accounts.