In the standard ERP system (and even S/4HANA) it is difficult to find reports that give you a multidimensional view of your inventory costs. Many customers download the information to Microsoft Excel or use external reporting tools such as BI to do the analysis. There is nothing wrong with these options, but sometimes they lead to reconciliation errors (in the case of Excel) or realtime update issues (in the case of BI). With the Material Ledger Activated and by utilizing an enhanced report, there are several reporting options that will give you a more granular view of your inventory values.
Absorption Costing-Accounting of Activities
SAP Controlling practitioners who have used activity types for absorption costing, have often asked about the integration of SAP Production Planning and SAP Controlling and how this setup works behind-the-scenes. This blog post is an attempt to explain the mechanics of activity types, their configuration, master data and transactional data setup. I hope this write-up is useful to SAP Controlling practitioners.
Recording Stock-in-Transit in Accounting and Logistics Transactions
Stock-in-Transit can occur when goods transferred between two entities have left the sending entity, but ownership has not yet been transferred to the receiving entity. In traditional SAP the Stock-in-Transit of Inventory can be identified in Inventory Management reports, but this is not reflected in Accounting. With the Business Function LOG_MM_SIT, which is available in ECC (from Enhancement Pack 5) and also in S/4HANA (switched on by default), you can reflect the Stock-in-Transit in dedicated G/L Accounts.
Reorganizing Profit Centers in SAP
As of ECC 6 EHP 5, SAP rolled out a functionality which allows for reorganization of the profit center on the core SAP objects in the Logistics and Accounting functions.
This includes changing profit centers on Materials, Sales Orders, Cost Centers, Orders, Projects, AR, AP, and GL Open Items. With this functionality companies can update the core data in their SAP ERP systems to enable financial reporting which better aligns with how they manage their business today versus 10-15 years ago when they first implemented SAP. Learn how SPX Flow used this functionality to transform their financial reporting and enable full financial statements which align with a new management structure.
“Professionalized Business Case” is the first step of SAP S/4HANA Journey!
SAP provides mainstream maintenance for core applications of SAP Business Suite 7 software including SAP ERP 6.0, SAP Customer Relationship Management 7.0, SAP Supply Chain Management 7.0, and SAP Supplier Relationship Management 7.0 applications and SAP Business Suite powered by SAP HANA on the respective latest three Enhancement Packages (EhPs) until December 31, 2027. From January 1, 2028, all SAP Business Suite 7 core applications and respective SAP Business Suite 7 add-on products will enter the customer-specific maintenance (CSM) phase. SAP offers an optional extended maintenance phase from January 1, 2028, until December 31, 2030. This three-year phase comes at an additional fee on top of the maintenance fee. Details outlined in SAP Note 2881788.
Universal Allocations in S/4HANA
Cost Allocation within the Overhead Cost Controlling module enables business users to periodically allocate posted amounts and quantities from sender cost objects to receiver cost objects based on a Cycle Structure. Some challenges exist with the current ECC functionality such as the ability of users to easily understand their allocation processes and the ability to simulate the results from allocations. Also, several other modules such as General Ledger, Profit Center Account, and Profitability Analysis also contain allocation functionality, but it is difficult to keep track of all the allocations, as they are not stored in the same area of the system. In S/4HANA 1809, Universal Allocations were introduced to handle most of these issues as well as provide new functionality.
SAP's RE-FX Contract Lease Management Solution
WALK AWAY FROM THIS SESSION WITH AN UNDERSTANDING OF SAP's RE-FX Contract Lease Management Solution
The FASB released new lease accounting standards taking effect:
- After December 15, 2018 for US public companies and
- Delayed to December 15, 2021 for US private and nonprofit companies*
- Lease contracts move from a footnote in financial statements to the balance sheet as right-to-use (ROU) assets
- SAP's existing Real Estate module (RE-FX) incorporates the new process and reporting requirements
- This webinar informs you of 5 things you may not know, but should, about implementing the new lease accounting standard and SAP's RE-FX solution:
- Things to do before your implementation
- Things to avoid that complicated public company
implementations
- S/4HANA versus ECC6 and on- premise versus
cloud
- Things to remember about SAP's RE-FX
configuration
S/4HANA Key Considerations to Take Data Archiving Route to Manage Database Volume
Data archiving is not a new concept as organizations use it to manage the database volume to manage SAP footprints. As S/4HANA architecture, where the database is already a columnar database for a robust and fast performance of reporting/transactions, why are we discussing data archiving now? There can still be organizations with a very high data footprint and looking for archiving old data, especially for clients who converted their old SAP system to S/4HANA and thus may carry the legacy data if not archived before moving to S/4HANA.
S/4 HANA: Costing for Manufacturing Orders
WALK AWAY FROM THIS SESSION WITH AN UNDERSTANDING OF DISTRIBUTING COSTS DURING PERIODS OF IRREGULAR PRODUCTION ACTIVITY
There are certain scenarios where the activities of a business are not aligned with the period when the costs for those activities are incurred. This occurrence is typical with companies with seasonal production cycles, such as those in the Agribusiness industry, whose investments in land or other resources, do not always coincide with when the utilization of those resources occurs. In those cases, a cost model is set up so that the original cost is spread through the periods of the production cycle, when the actual cultivation of the land takes place.
In these times, where disruption due to COVID 19 has impacted many industries and hence production activities, the model described above could also be useful. During periods of Production Downturn which leads to minimal or no activity, how do you reflect that in a cost structure that had assumed that production will take place? Hear from Rogerio Faleiros, SAP Controlling Expert and Author, who will take you through the following:
- Using Assessments between Cost Centers and Internal
- Orders for Operational Expenses
- Using Internal Order Settlement to transfer Costs to AUCs
- Setting up Depreciation Rules to reflect periods of Uneven
Production
- Using the Allocation Structure to Distinguish Between
- Different Types of Costs
How to Distribute Costs During Periods of Irregular Production Activity
WALK AWAY FROM THIS SESSION WITH AN UNDERSTANDING OF DISTRIBUTING COSTS DURING PERIODS OF IRREGULAR PRODUCTION ACTIVITY
There are certain scenarios where the activities of a business are not aligned with the period when the costs for those activities are incurred. This occurrence is typical with companies with seasonal production cycles, such as those in the Agribusiness industry, whose investments in land or other resources, do not always coincide with when the utilization of those resources occurs. In those cases, a cost model is set up so that the original cost is spread through the periods of the production cycle, when the actual cultivation of the land takes place.
In these times, where disruption due to COVID 19 has impacted many industries and hence production activities, the model described above could also be useful. During periods of Production Downturn which leads to minimal or no activity, how do you reflect that in a cost structure that had assumed that production will take place? Hear from Rogerio Faleiros, SAP Controlling Expert and Author, who will take you through the following:
- Using Assessments between Cost Centers and Internal
- Orders for Operational Expenses
- Using Internal Order Settlement to transfer Costs to AUCs
- Setting up Depreciation Rules to reflect periods of Uneven
Production
- Using the Allocation Structure to Distinguish Between
- Different Types of Costs
Asset Accounting in SAP S/4HANA
SAP S/4HANA has brought about a number of improvements in Asset Accounting. There is a tighter integration with Finance, and postings are now real-time, updating all ledgers at the same time as the asset, allowing a smoother period end and an easier migration.
This is a new webcast, to update the original “Ask a Fixer: What You Should Know About New Asset Accounting with SAP S/4HANA” created in 2017. It explains the previous material in a new way, and in addition, covers new transactions for closing and migration. It also introduces the new Fiori “experience”, which brings additional functionality such as the asset accounting overview and embedded analytics.
Executing the Steps for Migrating to S/4HANA Finance
One of the key tasks when migrating to S/4HANA is to convert your Financial data from the old tables in ECC to the new tables (particularly the Universal journal) in S/4HANA. This process usually takes place after the technical upgrade from ECC to S/4 and is done during a downtime period. It involves a series of transactional steps that are executed in sequence, with progression to the next step only possible when a previous step has been executed successfully or confirmed. Several iterations of a Finance Migration need to be done in a Sandbox (or test) system in order to resolve any issues that arise. This will therefore make the eventual Production migration smoother and easier to accomplish during the downtime window. It is therefore important to know what steps are carried out and the types of errors that could occur.
Design and Configuration Changes In Controlling with S/4HANA
WALK AWAY FROM THIS SESSION WITH AN UNDERSTANDING OF DESIGN AND CONFIGURATION CHANGES IN CONTROLLING WITH S/4HANA.
Presenter will share important design and configuration changes in Controlling with S/4HANA, including: Cost Element part of G/L Account; Account Based Profitability Analysis; Material Ledger mandatory; Cost of Goods Sold by cost component; Production variances by category. • In ECC, Cost Elements are created within Controlling module; with S/4HANA Finance, Cost Elements are now part of G/L Account.• In ECC, Costing-based CO-PA has several advantages over Account-based CO-PA and had therefore been a preferred choice for majority of the clients; with S/4HANA Finance, most limitations of Account-based CO-PA have been addressed.• In ECC, Material Ledger is optional, which includes Actual Costing functionality which calculates Actual Cost / Periodic Unit Price; with S/4HANA Material Ledger is mandatory (Price Determination 2 – Transaction-based); but Actual Costing is still optional (Price Determination 3 – Single-/Multilevel).• In ECC, costing-based CO-PA allows visibility of various cost components in profitability reports, but in FI, only one line item is visible for COGS; with S/4HANA’s account-based CO-PA, different cost components can be mapped to multiple general ledger accounts.• In ECC, all production variances are bundled and posted to one price difference (PRD-PRF) account; analysis of variances is carried using Controlling reports; with S/4HANA, variances can be posted to different G/L accounts.
Using the Prediction and Commitment Extension Ledger for Sales and Purchase Orders
WALK AWAY FROM THIS SESSION WITH AN UNDERSTANDING OF THE PREDICTION AND COMMITMENT EXTENSION LEDGER FOR SALES AND PURCHASE ORDERS PAGE.
Watch this pre-recorded webcast with FI/CO expert Paul Ovigele to learn:
· The different types of Extension Ledger and what they can be used for
· The difference between Predictive Analytics and predictive accounting
· How to Set up the Extension Ledger for Prediction and Commitments
· How the Extension Ledger works with Sales Order postings
· How the Extension Ledger works with Purchase Order postings
Planning Your Finance Migration From SAP ECC to SAP S/4HANA
To help organizations through the SAP ECC to SAP S/4HANA journey, ERPFIXERS and Winshuttle have joined forces for a webinar to discuss our views on the tools, tricks, and processes that can help companies.
Watch this webinar to understand the complex challenges and choices involved in making the finance transition from ECC to S/4HANA as smooth as possible.