,

Tips to Master SAP Controlling Design in Readiness for S/4HANA

,

Presented by Ashish Sampat

Are you aware of the changes to the Controlling module with S/4HANA? Is your SAP Controlling implementation optimized to make the most of the available functionality? Are you taking advantage of the integrated nature of the SAP system and making the most out of this module?

Watch this recorded session with ERPfixers and SAP Controlling Consultant Ashish Sampat where you can find answers to questions such as below:

- What are the important changes in Controlling under S/4HANA that I should be aware of?
- Which cost allocation method is better - Distribution or Assessment, when should I use one versus another?
- What are the different standard costing methods that are available for use, and under what circumstances should they be used?
- How does one go about correcting various error / warning messages encountered during costing?
- What are the different cost objects that are available for use in SAP Controlling?
- Under what circumstances should I go about automating WIP, Variance and Settlement jobs?
- What various design options can we use to add freight and other incidental costs on procured materials?
- How can we link and analyze Movement Types (in Materials Management) to GL Account (in Financial Accounting)?
- How to separate GR/IR for Intercompany transactions?

Q&A

Q: I'm curious if anyone else has experienced capacity issues with two key S/4 tables. While we are using standard S/4 costing functionality, both (1)ACDOCA and (2)MLDOCCCS are predicted to quickly reach their capacity at our company due to line item volume.  SAP has recommended deactivating the COGS cost component split to mitigate #1 and reducing cost components, currency types, and/or # of cost component structures to mitigate #2. Seems very unfortunate we need to forgo key functionality due to S/4 table capacity limitations - curious if we are alone in this dilemma?

A: COGS split in FI definitely adds more line items in ACDOCA, so if you are using lots of cost components and mapping each cost component to individual GL account in FI, then consider grouping them together and mapping to fewer GL accounts. This may help address some of the volume increase.

Cost component granularity impacts also the ML tables, especially the one which you have highlighted – MLDOCCCS. Summarizing or reducing cost components is an option, but I agree with the dilemma such an approach poses. I have personally not seen this at my clients – possibly because S/4 is relatively new.

Q: Hi Ashish, What is the new functionality of universal allocation in S/4 Hana?

A: Universal allocations in introduced with S/4HANA version 1809, it simplifies and builds on allocations in ECC. More information can be found in this link from October 2020 on Universal Allocations in S/4HANA, presented by Paul Ovigele https://www.erpfixers.com/blog/2020/universal-allocations-in-s/4hana.

Q: We capture freight for purchased material using conditions on the purchase order. However we do not receive or record the freight invoice at the PO line items so they remain open. Is there a way to close the PO line item freight accrual if we do not have an invoice to post against that line item?

A: You may explore using MR11 GR/IR clearing to address this scenario. Note that the non-receipt of freight invoice would mean MR11 GR/IR clearing will reverse all of the freight accrual and post against price variance account. You may need to reclass this amount to the appropriate GL account, say freight paid as a lump sum.

Couple of blogs on MR11 written by fixers may be helpful while you use this feature:

Q: Can you confirm that Margin Analysis (a.k.a. account-based CO-PA) is automatically activated during the S/4HANA Migration? I was under the impression that activating account-based CO-PA was optional in S/4HANA (similar to Actual Costing in ML).

A: Account-based CO-PA is not automatically activated during S/4HANA migration. However, it is the recommended option in S/4HANA.

A decision will need to be made when upgrading from ECC to S/4 (or even when setting up a greenfield system first time) whether one wants to use Account-based, or Costing-based, or both.

Clients migrating from ECC, who are using costing-based CO-PA (and not familiar with costing-based CO-PA) may find it beneficial to keep both options become familiar with and compare the two options.

Q: You mentioned that cost elements are now part of GL account in S/4HANA. What happens to cost element groups? Are these also gone made part of GL Accounts?

A: Cost element groups are still available and maintained via the same transactions KAH1, KAH2 and KAH3.

Q: Now that cost elements are now part of GL account in S/4HANA, can one post an FB50 journal entry to secondary cost elements?

A: No, one cannot to post a direct journal entry to secondary cost element. One must go through controlling transactions meant for specific business transaction (e.g. KB21N/CORK/COR6N for activity posting, KSU5 for assessment).

Q: What are the new features in product costing S/4HANA?

A: In ECC, the steps involved in costing runs are: Selection, Structure Explosion, Costing, Analysis, Marking and Release. With S/4HANA, the structure explosion step has been removed

Another change in the costing run steps in S/4HANA is that the parameters of the Selection step now include a new checkbox: Explode Multilevel Structure. Selecting this checkbox means that the semi-finished products and raw materials are costed along with the materials selected for costing

S/4HANA now offers a repeat costing run feature, which enables a costing run to be executed on a monthly, quarterly, or yearly basis, without having to manually create the run each time

Q: We are using costing-based CO-PA on ECC right now. We have not activated account-based CO-PA. When we move to S/4HANA and opt for account-based CO-PA, will we get historical data for account-based CO-PA for prior years?

A: There is no standard way to convert historical data from costing-based CO-PA to account-based CO-PA. Either one needs to activate account-based CO-PA ahead of time or use custom tools to build history for prior periods. Information about one such tool (Winshuttle) can be found in this whitepaper https://www.erpfixers.com/whitepaper-what-to-expect-when-migrating-finance-from-sap-ecc-to-sap-s/4hana and this webcast https://www.erpfixers.com/blog/planning-your-finance-migration-to-sap-s4hana.

Q: For those who are not using Material Ledger and migrating to S4, do we need to do any additional configuration and master data changes? And, do they need to be considered other than just activating the Material Ledger? 

A: If you are not planning to use actual costing (price determination “3” – single/multi-level), then no additional configuration is necessary. System automatically sets material masters to price determination “2” – transaction-based during the conversion process.

Q: When we say material ledger is mandatory with S/4HANA, what if I do not want to use actual costing functionality – do I still need to use it? (To give some background, we are not using actual costing functionality in ECC as of now).

A: If you are not using actual costing (price determination 3- single/multi-level) currently, then you do not need to use it in S/4HANA. Transaction-based (price determination 2) is automatically available in S/4HANA