Customers moving to the Intelligent Enterprise come from a variety of backgrounds and have different end goals. RISE with SAP is designed to address unique customer scenarios. RISE is a Business Transformation as a Service. RISE with SAP supports customers in Modernizing - on the best cloud infrastructure to achieve the lowest possible TCO, Standardizing - on the best intelligent suite to drive process efficiency and scale, Digitizing - on the best transformation platform to innovate faster than your competition
SAP General Ledger Considerations in Central Finance Implementations
SAP offers multiple pathways to implement SAP S/4HANA latest release. One pathway is Central Finance. A typical use case is customers with different release of SAP systems or non-SAP system can leverage SAP S/4HANA features by implementing Central Finance. SAP offers SAP Central finance solution. a deployment option, to leverage latest innovations of S/4HANA by replication of posting data from different ERP systems to central finance system without disturbing the existing ERP systems. The source system can be SAP, non-SAP systems or customized home-grown systems. There are several advantages with this approach such as shared services, advanced segment/group reporting, and transform business processes to SAP S/4HANA quickly. In addition, Central Finance provides companies with an opportunity to harmonize master data on the fly and enable fast closing.
In this recorded session, you will learn key considerations of General ledger in central finance with FI/CO expert Anand Seetharaju:
- Introduction to Central Finance
- What do you need to know about parallel ledgers when implementing central finance?
- What document splitting features available with Central Finance?
- Key currency considerations you must know.
- Chart of accounts considerations
- Key takeaways
- References
Tips to Master SAP Controlling Design in Readiness for S/4HANA
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?
New SAP Press Book: Production Variance Analysis in SAP S/4HANA
John and Janet’s new book, on publication Jan 26, 2023, immediately entered the SAP Press Bestsellers top ten. The first edition in 2007 was the first-ever book on SAP Controlling (CO), which explains SAP CO in an easy-to-understand way and has continued to attract positive feedback from our SAP Controlling community.
The 2nd edition was released in 2011 with a revised and improved layout and new content based on SAP ERP 6.0, continued as a bestseller, and remained in the SAP Press catalog.
To completely transform the book to the latest SAP S/4HANA version, John asked Janet Salmon, Chief Product Owner of Management Accounting at SAP SE, to co-author with him. They have included S/4HANA version 2021 screenshots and content throughout the book and S/4HANA version 2022 in the new chapter 7 on event-based processing, SAP Fiori Apps, and the future direction of SAP S/4HANA.
Chapter 7 discusses new options for variance analysis delivered with SAP S/4HANA Cloud when you use scope item 3F0 (Event-Based Production Cost Posting) and SAP S/4HANA 2022, with the business function for universal parallel accounting.
In this webinar, John and Janet present a chapter-by-chapter review of the updated contents and structure and, in the process, you'll gain an overview of SAP Product Costing.
Analytics-Based Enterprise Performance Management
Enterprise performance management (EPM) is now viewed as the seamless integration of managerial methods such as strategy execution with a strategy map and its companion balanced scorecard (KPIs) and operational dashboards (OPIs); enterprise risk management (ERM); capacity-sensitive driver-based budgets and rolling financial forecasts; product / service / channel / customer profitability analysis (using activity-based costing [ABC] principles); supply chain management; lean and Six Sigma quality management for operational improvement; and resource capacity spending planning. Each method should be embedded with business analytics of all flavors, such as correlation, segmentation, and regression, and analysis; and especially predictive analytics as a bridge to prescriptive analytics to yield the best (ideally optimal) decisions. This presentation will describe how to complete the full vision of analytics-based enterprise performance management.
Enabling Cost Components for Detailed Analysis of Inventory-Related G/L Accounts
Cost components break down the costs of a material across the entire production structure into material costs, production costs, material overhead, production overhead, and other costs. 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 as well. 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 and Production Variances, among others. Also, this functionality can be used whether a company uses Material Ledger or not.
Watch this recorded webcast with Controlling expert Rogerio Faleiros to learn:
- Splitting of COGS Accounts based on cost component split.
- Splitting of Ending Inventory based on cost component split.
- Customizing of accounts and posting scenarios.
- Enhancement of program to include Cost Component split for other accounts, such as Scrap, Consumption, Production Variance, etc.
- Viewing Enhanced Drilldown Reports for Product Costing and Material Ledger
Setting Up Transfer Pricing between Company Codes
Transfer pricing is a widely used functionality which sets a price between affiliated entities. It is typically setup for cross border transactions and need to conform with the tax laws in the respective countries. In SAP, Material Ledger can be used to enable multiple Valuation Views that can include or exclude the impact of transfer pricing and intercompany profit. In this regard it is used as an internal mechanism that treats every transfer between different company codes as is they occurred within the same entity, by eliminating intercompany profit and reporting in a common currency.
Watch this recorded webcast with FI/CO expert Paul Ovigele, to learn the following:
- What needs to be set up for Transfer Pricing between Company Codes?
- How is standard cost calculated for Profit center Transfer Pricing?
- How does a Transfer Pricing Posting look in the Group Valuation View?
- How is profit in Inventory identified in an Intercompany Posting?
- What changes have been made to the Transfer Pricing process in S/4HANA?
Simplify Your Journey to S/4HANA Finance
As SAP ECC customers are planning to move to SAP S/4HANA they want to know how to get started.
Join ERPfixers and Dr. Ravi Surya Subrahmanyam in this recorded webcast to learn more about:
- An overview on SAP S/4HANA & SAP S/4HANA Finance
- SAP S/4HANA transition options
- Tools that support SAP S/4HANA transition
- SAP S/4HANA readiness check for SAP ERP usage and data profiling
- Process discovery for SAP S/4HANA Transformation (evolution of SAP Business Scenario Recommendations)
- Building a business case for SAP S/4HANA transition
Production Variance Analysis in S/4HANA
Variance analysis begins much earlier than month end. It begins the previous fiscal year when sales, production, and cost center plans are created. You then create cost estimates for the following fiscal year which provide plan costs for the manufacture of products, and when compared with actual costs, allow variance analysis.
With the introduction of SAP S/4HANA there have been many improvements in SAP Controlling which we'll cover in this Webcast, including new Fiori apps which access the universal journal for improved views of variance analysis.
Fixed Asset Depreciation - A Taxing Situation for ERPs
Is your company's tax asset depreciation managed within SAP ERP or in a separate tax-specific system? Over the past 30+ years, Kent has encountered many tax managers and some finance managers, with a risk-aversion or reluctance to connect the tax asset depreciation process to SAP.
Join ERPfixers and Kent Bettisworth for this recorded session to discuss:
- SAP fixed asset designs that work for both, finance and tax departments.
- The ERP process and system challenges and suggested mitigation actions.
- Two specific SAP fixed asset designs with choices for finance and tax integration
- The impact of design choice , Tax tight integration or relaxed-integration on the risks.
Basics of SAP for Young Professionals
Written By: Ndz Anthony Business Intelligence Expert
SAP, commonly pronounced as 'sæp' or S-A-P (System, Application, and Products In Data Processing), is a software company that offers transformative enterprise management solutions to businesses around the globe.
The SAP company is a leader in ERP technology and business solutions.
SAP ranks amongst the Fortune 500 as the third-largest publicly-traded company(by revenue) globally.
One reason for these statistics is their top-tier customer base. SAP solutions are frequently expensive, closed source, and require professionals to implement.
Here at ERP Fixers, we know too well how challenging implementing SAP software can be, hence the need for trained SAP experts, typically known as SAP consultants in the SAP Ecosystem.
This article will discuss SAP Consulting, the types of SAP Consulting, how to become an SAP consultant, and finally, the prospects of SAP consulting.
What is SAP Consulting?
We can define SAP Consulting as the activities, processes, and tasks. SAP consultants undertake to help SAP customers manage and optimize their business operations.
Types of SAP Consulting
There are numerous SAP consultant types; as a matter of fact, there are as many SAP Consultants as SAP Products.
However, we can group sap consultants into two main categories, functional consultants and technical consultants.
Who is a Functional SAP Consultant?
This category of SAP consultants works closely with the domain experts and developers to set up and enable the use of functional SAP modules deployed within user departments.
The Key roles & Duties of a Functional SAP Consultant include:
Liaising with Heads of Departments during business process design and implementation phases.
Liaising extensively with heads of departments and "super users" to understand their SAP requirements and provide solutions to business needs. Enforcement of internal controls within SAP and other business systems.
Provide user manuals and training to users of enterprise systems.
Provide operational and periodic ad-hoc reports to administration to aid decision-making on SAP and SAP-related Systems.
Examples of functional SAP consultant roles are SAP MM Consultant, SAP PaPm Consultant, SAP HCM consultant, etc.
Technical Consultants:
These categories of SAP consultants are more tech-savvy and work closely with the functional consultants to implement, modify or enhance the existing SAP system.
Their Key roles & Responsibilities include:
Based on approval, work together with functional consultants to proactively implement new features, introduce new systems and modify existing business processes to improve efficiency.
Oversee and manage projects to modify, enhance, or implement new functionality on SAP and other related products.
Support users on change control and management.
Examples of technical SAP consultant roles are SAP ABAP Developer, SAP BW Consultant, SAP Basis consultant, etc.
How to Become An SAP Consultant
We have found two significant routes to commence your career as an SAP Consultant.
1. The SAP YPP Program
The SAP Young Professional Program is an initiative by SAP Digital Skills Center created to bridge the digital gap existing in today's workforce.
The program is designed to:
Sieve top graduates and subsequently equip them with soft skills, accredited SAP certifications, and a sense of belonging within the SAP Community.
Set a stage for career growth within the SAP Ecosystem as potential SAP consultants.
Balance the demand for SAP consultants across the SAP Ecosystem.
If you are interested in an SAP career and a B.s.c in Business Administration, Management Information Systems, Engineering, or a related field, you should consider applying.
2. SAP Certification and Training
Suppose you already have some experience working with SAP, maybe as a superuser in your company. In that case, you might want to consider this path.
Pick your preferred SAP module.
Invest in the training course for that module
Write certification exam
Intern or Volunteer to join up with an SAP Consulting firm to gain experience.
With this route, your credibility and experience will be evident to potential employers. You stand a higher chance of being considered for SAP Consultant roles.
Prospects of SAP Consulting
SAP is an in-demand profession, and there are many possibilities within the sap consulting space.
In this section, I will outline a few prospects for sap consulting.
1. High Earnings
SAP software is to the ERP ecosystem what Apple products are to the tech-gadget industry. SAP software is relatively expensive and usually deployed by enterprises with high budgets and large-scale businesses. Hence, the reason for top-notch earnings in the industry. The compensation for SAP consultants ranks among the highest, with opportunities for job growth prospects, salary, quality of life, and other benefits. PayScale estimates an average SAP Consultant salary at $89,129k per year.
2. In-demand Profession
According to most recent articles and employment agencies, jobs in SAP consulting are high in demand. Due to the increased demand for technology solutions, they will continually rise.
3. Top-Tier Firm
According to Glassdoor, SAP ranks as the "best places to work in 2022". Due to its success as an international brand, SAP consultants are highly regarded and respected in the corporate world.
From R/2 to S/4HANA: Journey of SAP Controlling
Learn about the history of how SAP software has evolved over the last five decades. Topics will include CO FI Real Time Integration example in ECC; Changes brought in by HANA, cloud and various acquisitions; Important design and configuration changes for Controlling in S/4HANA; Cost Elements are now part of G/L Account; Material Ledger is mandatory in S/4HANA; Cost components and variances break down can now flow to Financial Accounting; Move towards Margin Analysis and Other Features and Innovations.
How to Consolidate Financial Data in S/4HANA
The SAP S/4 HANA Finance Group Reporting module is SAP’s latest financial consolidation reporting tool which streamlines month-end close processes by unifying operational entity and financial consolidation group close processes. The new group reporting logic was implemented as of S4 HANA 1909. The new group reporting logic includes a set of features to support legal and management consolidation
How to achieve Realtime Profitability using Margin Analysis in S/4HANA
SAP Margin Analysis (previously known as Account Based CO-PA) allows organizations to gain insights into their margins, revenues, and costs of specific market segments such as products, customers, material groups and other dimensions. The goal is to provide management with contribution margin information to aid in the decision-making process. With S/4HANA, you can perform Profitability Analysis using both the Costing-based CO-PA and Margin Analysis methods. SAP recommends Margin Analysis as the default solution even though both Costing-based and Margin Analysis can co-exist. This is because, only the Margin Analysis solution updates the universal journal (ACDOCA), and all future innovations will only be made for Margin Analysis.
Profitability Analytics Center of Excellence (PACE)
Many organizations that use SAP are far from where they want and need to be with improving their performance. They typically apply intuition and externally oriented financial information, rather than information designed for internal decision support, when making decisions.
To address this problem a non-profit Profitability Analytics Center of Excellence (PACE) was created. PACE is based on a framework that integrates revenue management, capital and intangible investment management, and managerial costing. The framework provides a roadmap for finance to support strategy formulation, validate strategy with operational and financial models, improve the quality of strategy execution, and support strategy evaluation for continuous improvement. The result is improved forecasting and decision making.
Foundational to the PACE framework is the “causality principle” which is the basis of scientific insight, including decision science, as it applies to economic, financial, and operational decisions. Effective economic modeling is essential for all of the enterprise and corporate performance management tools.These include: a strategy maps and its companion balanced scorecard; product, service line, channel, and customer profitability analysis; capacity-sensitive driver-based budgets and rolling financial forecasts; enterprise risk management; supply chain management; and lean and Six Sigma quality management for operational improvement. Each method should be embedded with advanced business analytics of all flavors.
Using CASE expressions and Substring function in SELECT statements- A Short Guide for ABAP and ABAP on HANA Developers
Within newer versions of Open SQL, you can now add both simple and complex conditions using the CASE.. ENDCASE expression. In addition, you may use the SUBSTRING function in order to extract part of a character field. In this article, we will see the two topics, along with coding examples and output illustrations.
Cost Flows in SAP Controlling
One of the most misunderstood aspects in all of SAP is how to analyze production variances. This is partly because SAP’s method of Product Cost Controlling is different from other accounting software systems, in that production costs are passed through the P&L as well as the Balance Sheet. And also, because production activity (Labor, Machine Time, Overhead) is tracked using Secondary Cost Elements, which are not part of your typical Financial Statements. Even some of the most seasoned cost accountants are flummoxed with how the manufacturing information is represented in Financial and Management Accounting, and how to measure price and efficiency variances. To put it simply, Production Variance Analysis involves three steps:
Creating a standard cost estimate, which calculates the expected cost to manufacture an assembly.
Collecting the Actual manufacturing costs on a manufacturing order (production order/process order /product cost collector).
Calculating the Variance, which is the difference between:
actual costs: components, labor, overhead
actual credits: value of finished goods manufactured.
SAP Product Costing Controlling Configuration and Beyond
- Look into the design aspects that are jointly owned by CO, MM and PP teams. (e.g. Resource / Work Center and their Standard Value Keys, Formulae for Activity Types).
- Review options to add freight, other incidental costs in the standard cost estimates and track actuals (e.g. Costing Sheet, Additive Costs, User exit for material valuation, Accrual pricing conditions in Purchase Order, etc.)
- Understand how to investigate and rectify messages encountered during product costing
- Deep dive into movement types and account determination, analyze MM-FI accounting flow
How Funds Management (PSM/FM) Interacts with Material Management (MM) Lifecycle
Some public sector companies must control the annual budget to certify that its expenses are below the budget provided for each cost center and cost element. The primary objective of the SAP Funds Management (FM) module is to address this.
When this module is activated, it interacts with several other SAP modules, especially MM, which controls all acquisitions made by the company. This interaction begins from Purchase Requisition to Invoice Verification.
Variance Analysis in SAP Controlling
One of the most misunderstood aspects in all of SAP is how to analyze production variances. This is partly because SAP’s method of Product Cost Controlling is different from other accounting software systems, in that production costs are passed through the P&L as well as the Balance Sheet. And also, because production activity (Labor, Machine Time, Overhead) is tracked using Secondary Cost Elements, which are not part of your typical Financial Statements. Even some of the most seasoned cost accountants are flummoxed with how the manufacturing information is represented in Financial and Management Accounting, and how to measure price and efficiency variances. To put it simply, Production Variance Analysis involves three steps:
Creating a standard cost estimate, which calculates the expected cost to manufacture an assembly.
Collecting the Actual manufacturing costs on a manufacturing order (production order/process order /product cost collector).
Calculating the Variance, which is the difference between:
actual costs: components, labor, overhead
actual credits: value of finished goods manufactured.