Stock in Transit and Actual Costing - SAP Ramp-UP - Janet Dorothy

Stock in Transit and Actual CostingNew Features in ERP 6.0 EHP5

Supply within Global GroupsGlobalization, a history of mergers and acquisitions and fiscal rules cause companies to separate their organization into legal entities. As a consequence internal supply are becoming sales processes.1. Central Marketing & Distribution OrganizationGroup

Challenges

Plant

sells to

Group Marketing sells to

Regional Sales Org

sells to

Customer

Auditors demand transparency on transfer prices Complex Processes

Local regulationsAdditional layers of systems Missing local view on contribution

2. Distributed Production and Supply ChainGroup

Plant 1

Semi-finished good

Finished good

Product

sells to

Plant 2

sells to

Sales Organization sells to

Customer

2010 SAP AG. All rights reserved. / Page 2

Interests of Different Stakeholders have to be Served in Modeling a Supply ChainSetting up and maintaining a supply chain involving multiple companies of the same group requires alignment between several stakeholders with differing objectives

CFO Group AccountingHow do I increase revenue and profits and comply to all regulations?

CIOReducing Complexity

VP Supply ChainOptimization

VP AccountingFinancial Reporting

How can I get rid on all kinds of add-on systems and complexities?

How can I optimize the supply chain and provide flexibility and effectiveness?

How can I report the contribution of my organization on the overall success?

Revenue Optimization Compliance

Simplification Reduce Costs

Synergies within Group Fast Reactions

Transparency Local Regulations Auditability

Transparency

User Satisfaction

Risk Mitigation


Use Cases

A Brazilian steel pipe company takes a customer order at their Nigerian subsidiary. The subsidiary orders the pipes for make to order at the headquarter which places again an order to the best suited plant in Mexico.

A Belgian consumer products company produces a fruit mix after a secret recipe and sells it worldwide to affiliate companies for finishing a beverage by adding water and sugar.

A South-African mining company sells for fiscal reasons all its mine production to their marketing company in Switzerland which serves the regional sales organization. Physical shipments will go straight from the mine to the customer.


Process DetailsThe Process:

Two legally independent companies A and B supply each other with goods. B sells the material or processes them further. A and B belong to the same group A and B are modeled as company codes in the groups ERP system in the same client

GroupCompany A

Company B Sales process

The time to ship the goods from A to B is not negligible

Requirements

From an accounting perspective the process behaves like a sales transaction from A to B Auditatibility with a full document flow for a legal sales process needs to be provided

Paperwork for the shipment is neededThe ownership and the accounting of the goods need to be transparent during the transit The process needs to be handled efficiently with potential to be automated A returns process for the full or partial return needs to be supported. The value flow shall be transparent from a group point of view. Group reporting shall show where costs and profits arise, and what the total profitability from group perspective is.


Issues to Solve

Former Work-around approaches:

Use designated storage locations or virtual plants for transit stocks (also in SAPs Oil and Gas industry add-on, TSW) Use one-step stock transfers Consolidate value flow in BI or add-on systems

Issues

Missing transparency on goods in transit:

Values vanish during transit times Quantities are not accessible for planning purposes

System representation does not reflect reality

Values in reversals do not equal original valuesCost flow is broken at company code borders

No group view on actual costs No transparency on intercompany profits No group-wide profitability view


Features & Functions of the new SIT Concept in a nutshellWith enhancement pack 5 of ERP 6.0 SAP provides an integrated solution to the process consisting of

Company A

Company B Valuated stock in transit

Introducing a valuated stock in transit that either belongs to the sending or the receiving plant New order types and movement types and configuration to support the process Ability to use this new concept either for crosscompany processes or intra-company code processes

Enhancements in actual costing to connect the value chain across company codes Inclusion of cross-company profits (or markup) into the cost components Group actual costing parallel to the legal view



Available in EHP5: New Concept for Stock In-Transit (SIT)

Sender In plant Senders Stock In transit

Outbound Delivery

Purchase Order

Receiver In transit In plant Receivers Stock

Available in EHP5!

0 1 2

Immediate Transfer (1-step scenario)

Senders Stock

Senders Transit Stock

Receivers Stock

Goods stay in senders ownership during transfer Ownership changes during the transfer, e.g. upon arrival in the port of destination

Senders Stock


Receivers Transit Stock

Receivers Stock

3

Senders Stock


Receivers Stock

Ownership changes when leaving the sender


EHP5: Cross-Company-Code Material Transfer with SIT (Detail View)Company Code 1000 Plant 1000 Company Code 0001 Plant 0001

Create Outbound Delivery (From Plant 1000 to 0001)

Create Purchase Order

1

Perform Goods Issue (VL02N: 681)

In-Transit Stock

Perform Goods Receipt with reference to Outbound Delivery (VLPOD: 685 + 101)

Perform POD (VLPOD: 685 + 107) Perform Goods Receipt with reference to Outbound Delivery (MIGO: 109)

2 3


In-Transit Stock (Plant 1000)


Perform Goods Issue (VL02N: 683 + 107)

In-Transit Stock

Perform Goods Receipt with reference to Outbound Delivery (MIGO: 109) Create Invoice (automatically or manually)

Create Billing document (with ref. to outb. delivery)


EHP5: Intra-Company-Code Material Transfer with SIT (Detail View)Company Code 1000

Plant 1000 Create Outbound Delivery (From Plant 1000 to 0001) Create Purchase Order

Plant 2000

1

Perform Goods Issue (VL02N: 68A)

In-Transit Stock

Perform Goods Receipt with reference to Outbound Delivery (VLPOD: 68i)

Perform POD (VLPOD: 68E) Perform Goods Receipt with reference to Outbound Delivery (MIGO: 109)

2 3

Perform Goods Issue (VL02N: 68A)



Perform Goods Issue (VL02N: 68C)

In-Transit Stock

Perform Goods Receipt with reference to Outbound Delivery (MIGO: 109)


Example Process(1/3): Cross-Company Code transfer from Issuing SIT Receiving SITOutbound Side (Posting to issuing SIT):

VL02N: Goods Issue with Mvt Type 681

Ownership Transfer (with Transaction VLPOD):

Quantity differences can be maintained here


Example Process(2/3): Cross-Company Code transfer from Issuing SIT Receiving SITResult of VLPOD:

The material is issued from the SIT of the sending plant and received into the SIT of the receiving plant ( 2 movements!)


Example Process(3/3): Cross-Company Code transfer from Issuing SIT Receiving SITInbound Side (receiving SIT to receiving plant / transaction MIGO):

Document Flow of the scenario:


Customizing Overview

- Choose 2-step procedure per plant/plant combination: Materials ManagementPurchasingPurchase Order Setup stock transport order

-Set up delivery type determination based on PO Document type and Supplying Plant: Materials ManagementPurchasingPurchase Order Setup stock transport order

-Find the suitable item category per delivery type: Logistics ExecutionShippingDeliveries - Find the suitable schedule line category per item category: Sales and Distribution Sales Sales Documents Schedule Lines Assign Schedule Line Categories

-The schedule line category contains the movement type which is used for the goods movement with reference to the delivery, e.g.:These fields decide who owns the transit stock and how the ownership transfer is executed. 2010 SAP AG. All rights reserved. / Page 15

EHP5 Example: Cross-Company Code Return and Cancellation Processes

Sender Company Code In plant In transit

Outbound Delivery

Purchase Order

Receiver Company Code In transit In plant Receivers Free StockComplete or partial return (1-step scenario!)

r0 r1 r2

Senders Free StockRejected or not delivered

Senders Free Stock


Receivers Free Stock

Return from transit stock

Senders Free Stock


Receivers Free Stock

Return from receiver via transit stock


EHP5 Example: Cross-Company Code Return and Cancellation Processes (Detail View)Company Code 1000 Plant 1000 Company Code 0001 Plant 0001

Create Returns Delivery

Create Returns PO Item

r0r1 r2

Goods Receipt is posted automatically

Perform goods movements (VL02N: 161+675)

Cancel Goods Issue VL09: 682 (full return) MIGO: 417 (for partial returns MIGO: 555 (Scrapping)

In-Transit Stock

Post GR (VL02N: 693 + 167)

In-Transit Stock

Post Goods Movement (MIGO: 109 169)


EHP5 Example: Business with External CustomersProcess variants using stock in transitSales Order

Sender Company Code In plant In transit

Outbound Delivery

Purchase Order

External CustomerDelivery address

4 r4

Senders Free Stock

687


601 TCustomer

Goods stay in senders ownership and control during transfer to an external customer Returning goods are in senders ownership and control and will keep the original values

Senders Free Stock


688

Rejected or not delivered

Customer

The enhancement helps also in business with external customers to keep sold goods in the books until they are finally arrived at the customers and keep control over returns


EHP5 Example: Sales Process with Stock In TransitCompany Code 1000 Plant 1000 Customer

Create Sales Order

Create Purchase Order

Create Outbound Delivery


In-Transit Stock

Perform Goods Receipt + send Proof of Delivery

Maintain Proof of Delivery (VLPOD: Goods Issue 601)

Create Billing document

Receive Invoice


ERP 6.0 Working Example: Stock transfer at Vendor locationExternal Vendor or different ERP-System ERP 6.0

Sales Order

Purchase Order

Outbound Delivery / ASN

DESADV idoc

Inbound Delivery

Post Goods Receipt (MIGO: 107)

User-Exit: Post Goods Receipt 107 in Background

In-Transit Stock

Goods Receipt with reference to Inboud Delivery (109) with VL32N


Solution Properties

Valuated Stock in Transit The Solution has following properties:

Stock in Transit (SIT) is valuated SIT valuation will be stable and separated from the unrestricted stock and postings can be on separate G/L accounts. Returns out of SIT will be posted with the original material value New Movement types for transfers between free stock and SIT and between SITs Ownership transfer may be triggered by proof of delivery Usage of SIT configured by purchasing document type and plant-to-plant combination Only one purchase order and one outbound delivery is necessary to control the multi-step process (by using the SPED functionality inbound deliveries can be used as well) Stock overview and other reports will show SIT as separate stock type

Solution supports:

Handling Units Batches Sales order Assignments Standard or moving average price Serial numbers Costing, cost object controlling and actual costing

SPED functionality (automatically creating inbound deliveries from outbound deliveries)



Motivation

IssueActual costing provides no visibility into cost structure after intercompany sales

RequirementThe enhanced Solution shall keep the cost transparency through intracompany sales and add freight costs and cross-company profits to the costs from the selling company code from a group point of view

GroupCompany ACosts Raw Mat. Energy Labour Production

Company BCosts Raw Mat. 100 Energy 0 Labour 0 Production 0

20 25 15 40

Sales process


Sales Process

without enhanced Cross-Company Actual CostingBefore the enhancement, a sales process does not transmit the internal cost knowledge from a vendor to a purchaser. At the receiver the goods appear as purchased raw materials.Regional Sales OrgCosts Raw Mat. Energy Labour Production Maintenance Freight Marketing Duties Intercompany profit Sales Costs

Plant

Group Marketing

Customer

Costs Raw Mat. Energy Labour Production Maintenance Freight Marketing Duties Intercompany profit Sales Costs


Revenues Costs Raw Mat. Energy Labour Production Maintenance Freight Marketing Duties Intercompany profit Sales Costs Profit

In SAP standard an internal sales process cuts the value flow for actal costs. Costs will only be transparent for the last step in the chain. Costs from previous steps will appear as raw material costs only 2010 SAP AG. All rights reserved. / Page 24

Sales Process

with enhanced Cross-Company Actual CostingAfter the enhancement, the full cost information is collected along the groupinternal supply chain and can be compared with the revenues achieved.

Plant

Group Marketing

Regional Sales OrgCosts Raw Mat. Energy Labour Production Maintenance Freight Marketing Duties Intercompany profit Plant Sales Costs Intercompany profit Marketing

Customer


Costs Raw Mat. Energy Labour Production Maintenance Freight Marketing Duties Intercompany profit Plant Sales Costs

Revenues CostsEnergy Labour Production Maintenance Freight Marketing Duties Intercompany profit Plant Sales Costs Intercompany profit Marketing

Profit

Profitability Analysis will make cost and profit contributions from the whole chain transparent. Actual costs of the month in production, marketing and sales will be compared with actual revenues 2010 SAP AG. All rights reserved. / Page 25

Valuation View: Legal ValuationCompany Code Valuation (legal valuation)

In legal view the transfer is valuated like a sales process. The costs at the receiver will reflect the PO value initially and finally the invoice value The difference between the cost at the sender site and the invoiced price is shown a markup or intracompany profit within the cost components* Freight costs and other planned delivery costs will be added at the receiver Cost information from the sender will be collapsed (Option 1) It can be chosen in configuration to transmit all cost split information from sender to receiver and keep them in the receivers cost component split (Option 2)Invoice 1100,-

Option 1 CoCd B / Plnt 2Total cost 1200 1100 0 0 100 100 Materials Labor Overhead Freight

Option 2 CoCd B / Plnt 2Total cost Materials Labor Overhead Freight CC Markup 1200 600 400 100 100 100

CoCd A / Plnt 1Total cost Materials Labor Overhead 1000 500 400 100

Sold to

FreightCC Markup 0Freight invoice 100,-

CC Markup

Shipper 2010 SAP AG. All rights reserved. / Page 26

* Via a BADI implementation it can be achieved to split markups (e.g. into contributions from different parts of the organization )

Sales Process in Legal View

The groupinternal PO is an own process

6 kg are purchased from plant 2000 directly 2010 SAP AG. All rights reserved. / Page 27

5 kg are purchased from plant 1000 via a transit stock

No price differences are rolled up in legal view

Cost Component Split in Legal View

1000

Hamburg

Sells to

11,34

11,34

26,82

12,82

14,00

1,05

1,05

0,00

0,00 2,42

Cost Components from Purchase process

Cost Components from actual costing 2010 SAP AG. All rights reserved. / Page 28

Intercompany Profit


Valuation View: Group ValuationGroup Valuation

In group view the transfer is valuated like a plant-to-plant transfer. The costs at the receiver will reflect the costs at the sender plant No Intercompany Profit is shown. The PO and invoice values play no role for material valuation Freight costs and other planned delivery costs will be added at the receiver Cost information from the sender will be kept

Note: Internal invoice needs to be created via EDI-interface and not manually in MIRO

CoCd A, Plnt 1Total cost Materials Labor Overhead 1000 500 400 100

CoCd B, Plnt 2Total cost 1100 500 400 100 100 0

transfer

Materials Labor Overhead Freight

After period end, price differences from the sending plant will be transferred to the receiving plant in multi-level settlement, only in group valuation

FreightCC Markup 0Freight invoice 100,-

CC Markup

Shipper 2010 SAP AG. All rights reserved. / Page 30

Sales Process in Group View

Price differences from the source plant are rolled up and update the price and cost component split in the receiving plant 2010 SAP AG. All rights reserved. / Page 31

Complete Picture

Multiple Steps in Parallel Valuation

Invoice 1100,-

Invoice 1300,-

Productionlegal Total cost Materials Labor Overhead Freight CC Markup 0 0 1000 500 400 100 group 1000 500 400 100

Marketinglegal group 1100 500 400 100 100 0

Regional Saleslegal group 1150 500 400 100 150 0

Sold to

Total cost Materials Labor Overhead Freight

1200 1100 0 0 100 100

Sold to


1350 1300 0 0 50 200

Shipper

Freight Markup CC invoice 100,-

Freight invoice 50,-

CC Markup


Period End: Revaluation at Actual Costs

At month-end the costs of production will be re-determined in the production plant. As the group-internal sales is a multi-level process, costs will be adjusted throughout the supply chain in group view

Productionlegal Total cost 1050 1000 550 500 400 100 group 1000 1050

Marketinglegal Total costInvoice 1100

Regional Salesgroup 1150 1100 550 500 400 100 100 0Freight Invoice 50 Invoice 1300

legal Total cost 1350

group 1150 1200

1200

MaterialsLabor Overhead Freight CC Markup

50 550400 100

MaterialsLabor Overhead

11000 0 100 50 100

MaterialsLabor Overhead Freight CC Markup

13000 0 50 150 200

500 550400 100 150 0

Freight Invoice 100

Freight CC Markup

0

0

In the example we assume that the raw materials used for the production were procured 10% more expensive than planned

Markup in legal view will be adjusted

The price difference reaches the last member in the chain. Costs in group view will be adjusted


Complete Picture

Multiple Steps in Parallel Valuation

(only legal valuation)

Invoice 1100,-

Invoice 1300,-

ProductionOpt 1 Total cost Materials Labor Overhead Freight CC Markup 0 0 1000 500 400 100 Opt 2 1000 500 400 100

MarketingOpt 1 Opt 2 1200 600 400 100 100 100

Regional SalesOpt 1l Opt 2 1350 700 400 100 150 200

Sold to

Total cost Materials Labor Overhead Freight CC Markup

1200 1100 0 0 100 100

Sold to


1350 1300 0 0 50 200

Shipper



CC Markup


Period End: Revaluation at Actual Costs(only legal valuation)

At month-end the costs of production will be re-determined in the production plant. As the group-internal sales is a multi-level process, costs will be adjusted throughout the supply chain . In the legal view the costs will always reflect the invoiced price of the sender.

ProductionOpt 1 Total cost Mat. Comp.1 Mat. Comp.2 Mat. Comp.3 Labor Overhead Freight CC Markup 0 0 1050 1000 500 560 0 0 390 400 100 Opt 2 1000 1050 500 560 0 0 400 390 100Freight Invoice 100 Invoice 1100

MarketingOpt 1 Total cost Mat. Comp.1 Mat. Comp.2 Mat. Comp.3 Labor Overhead Freight CC Markup 1200 0 1100 0 0 0 100 100 50 Opt 2 1200 560 500 100 0 400 390 100 100 100 50Freight Invoice 50

Regional SalesOpt 1 Total costInvoice 1300

Opt 2 1350 500 560 100 100

1350 0 0 1300

Mat. Comp.1 Mat. Comp.2 Mat. Comp.3

LaborOverhead Freight CC Markup

00 50 200 150

400 390100 150 200 150

In the example we assume that the raw materials used for the production were procured more expensive than planned and labor caused less costs

In option 1 the split is collapsed to the material cost component In option 2 also the split will reflect the split at the sender

The price difference reaches the last member in the chain. Actual costs, markup and actual cost component split were updated


Internal invoices

Treatment of invoice in the scenario

Invoices for delivery costs

Delivery costs such as freight or duties can be manually entered with MIRO. They may come from the sending plant or a 3rd party service provider. When the invoice refers to planned delivery costs with a specific condition type in the price conditions, it can be defined in account determination and cost component assignment that delivery costs are collected in a designated cost component.

Invoice for the sent material For the legal view an invoice is necessary to close the transaction and create a accounts payable at the receiver. If a parallel group valuation is active the invoice hase to be ignored, because the price and the cost components to be used was already used during goods receipt. For technical reason the cross-company invoice for the sent material cannot be manually entered in MIRO but has to be sent as IDOC in an EDI connection. This makes sure that not only the sales price (in legal view) is transmitted, but also the transfer price in group view. The setup for the scenario is described in the notes section.


Setting up inter-company billing with EDINote 31126 - Intercompany billing - posting to vendor account using EDI Note 659590 - EDI: Stock transfer and cross-company sales

The price condition KW00 will pick up the value of the material in the sending plant. This value will be used as invoice value on the receiving side in group valuation. By this group valuation in the receiving plant will have no contributions of intercompany profits.

BillingPR00 KW00

Automatic Creation via EDI

Logistics InvoiceValue in Legal View Value in Group View


Customizing: Parallel Valuation


Customizing Setting up the cost component split


BAdI: Control of Cross-Company Code TransfersROLLUP_COST_COMP_SPLIT Using this method you can control that the cost component split is also transferred cross-company code in the legal view. REVAL_MARKUP_AT_ACTUAL_COSTS Using this method you can control that the intercompany profit is calculated on the plan costs of the sender and not using the actual costs. DISPLAY_COST_COMPONENTS Using this method you can control in Material Price Analysis (CKM3) that all cost components not relevant to inventory valuation are displayed (and not just the cost component for the intercompany profit). GET_MARKUP_COMPONENT Using this method you can control that the intercompany profit is assigned to any cost component not relevant to inventory. MODIFY_MARKUP With this method, you can calculate the intercompany profit in accordance with a separate algorithm.


Maintain Vendor with Trading Partner

In the Control-tabstrip of the vendor master the receiving company code has to be maintained in order to mark the vendor as a vendor from the same group. The field is also used for legal consolidation

Company Code of receiving plant


Properties of the Solution Cross-Company actual CostingThe

Solution has the following properties:

Cross-Company Sales Process is a multi-level process. Actual costs will be transmitted at following events

Goods issue / Goods receiptInvoice receipt (via EDI) Period end closing

The cross-company scenario is recognized by the fields Customer andTrading Partner in the vendor master

Freight costs and other planned delivery costs will be added to actual costsMixed scenarios of (internal) procurement, own production and further process steps will be supported Mixed scenarios of internal and external procurement is supported and will be separately reported in procurement alternatives Sender transit stocks are own valuation objects that can be reported and take part in the multilevel-settlement Split valuation, sales-order valuation, and project valuation is supported Actual costing and parallel valuation can be activated in a live environment: no loss of data, not a major conversion project* Alternative Valuation Run (AVR) is supported. Also a scenario where periodic closings are performed in smaller units and AVR closes cross-company-chains in global closing is supported



Achievements

Flexibility in supply chain modeling Transparency on values and value flow throughout the group Group view on actual product and customer profitability

Compliance and auditability in valuationDecision support on local and group level


Release Info

The enhancements in logistics and accounting are delivered in ERP 6.0 enhancement pack 5 and included in the ERP user license

In order to use it the switch LOG_MM_SIT has to be activated in SFW5The entry into the documentation can be started from SFW5 for switch LOG_MM_SIT or via the help path:

Business Functions (SAP Enhancement Package 5 for SAP ERP 6.0) - Business Functions in SAP ERP - Enterprise Business Functions - Logistics Materials Management - Cross-Company Transfer & actual costing http://help.sap.com/erp -> SAP ERP Central Component -> Accounting -> Controlling (CO) -> Product Cost Controlling (COPC) -> Actual Costing/Material-Ledger (CO-PC-ACT) -> Selected Functions -> Cross Company Transfer Processes.

(The documentation is currently in process of publication and might become available only during Q1 or Q2 2010) Info on neighbored topics, already covered previously:

Transfer prices in profit center accounting: http://help.sap.com/saphelp_erp60_sp/helpdata/en/eb/13811243c411d1896f0000e8322d00/frameset.htm

Group cost estimates in product cost planning: http://help.sap.com/saphelp_erp60_sp/helpdata/en/7e/cb848443a311d189ee0000e81ddfac/frameset.htmActual costing / Material Ledger: http://help.sap.com/saphelp_erp60_sp/helpdata/en/a5/320e28d56c11d295c200a0c930328a/frameset.htm

Getting further info, feedback or questions to: [email protected] / [email protected] / [email protected] 2010 SAP AG. All rights reserved. / Page 45

Note: The 3 appendix sections are not part of the presentation and not part of the crosscompany actual costing enhancement in ERP 6.0 enhancement pack 5. They are included here to give an entry to neighbored requirements that are already covered before (I + II) or are developed in parallel (III)


Product Cost Controlling Through a Period

Cost PlanningEvaluating master data

ProductionRecording logistical information for controlling:

Actual CostingRecalculating the value flow using

Profitability AnalysisReporting Costs and Contribution Margins

Bill of materials Routing Planned prices Planned activities Planned yield

Consumptions Yield & scrap Purchasing & supplier invoices Activities & time recording

Actual quantity structure Actual activity recording

Production costs Sales Revenues

Multi-level value flow Actual raw material prices

DimensionsRegions Channels Customers


Actual Costing Principle: Actual prices are rolled up along the actual quantitiesProduction Roll-up price differences D from raw materials to finished materials

D D

Production

D

External Procurement

D

D D


D


Actual Cost Component Split

Production

D

Overhead Process Labor Material

Profitability Analysis

DProduction

DD

Overhead Process Labor Material

D


D

DExternal Procurement D


Basis for Actual Cost Determination

Collection of values from actual transactions

Quantity structure from actual transactions

Material Movements Purchasing Invoices Production order settlements Debits/CreditValue Beginning Inventory Receipts Cumulative Inventory Consumption Value Variances Price

Goods receipt from Production Consumption for Production Stock Transfers Sales Activities to Production

Ending Inventory 2010 SAP AG. All rights reserved. / Page 50

Profitability Analysis based on Actual Costs

Actual Values in Profitability Analysis Contribution Margin Accounting Cost of Sales Split into Cost Components Plan/Actual Variance AnalysisSales Quantity: Revenues: Plan Raw Materials Labor variable Machine variable Logistic Processes Material Overheads Contribution Margin I Labor fix Machine fix Contribution Margin II 50,000 4,000 4,000 10,000 5,000 27,000 10,000 7,000 10,000 Actual 45,000 5,000 4,500 7,000 5,500 33,000 10,000 7,000 16,000 Var. % 5,000 -1,000 - 500 3,000 - 500 6,000 0 0 6,000 1,000 pc 100,000 US$ Var. Abs. 10 % - 25 % - 13 % 30 % - 10 % 22 % 0% 0% 60 %


Screenshotsperiodic costs

The actual price, the actual cost component split and all price-influencing transactions of a month are reported by material


Valuated Quantity StructureThe actual quantity structure with the costs for all components and activities throughout the supply chain is shown by material


Profitability Analysis

Profitability Analysis brings actual revenues and actual costs together



Aim of Group Valuation and Transfer PricingTransfer prices enable organizations that divide tasks among different units to valuate and monitor the goods and services exchanged between these units, while still maintaining visibility to cost of goods manufactured and sold.

Group valuation and transfer prices are built into SAP ERP since R/3 4.5.

The enhancement in ERP 6.0:Group Full

view on actual costs

cost split is calculated cross-company.


Three Distinct Views of Business Posted in ParallelLegal View Allows you to represent profits optimally in the financial statements of the company code for tax purposes and according to GAAP Standards Group View Allows strategic decision making by viewing data as if the group acts as a single company code by eliminating internal profits throughout the financial transaction flow. Profit Center View Allows you to view the profit of individual areas of responsibility as if they were selling entities not part of the larger group.

You can do the Group and/or the Profit Center Views i.e. you can do either one or both


Parallel Valuation

Raw material

Cost center Semifin. material Finished product Distribution center Sales order

1

Production order

Production order

2

3

4

1) Sale of Raw Material to the Production Profit Center within a Legal Entity. 2) Sale of Semi-Finished Good to Affiliated Company. 3) Use Semi-Finished Good in a production order and add value from activity in a cost center. 4) Transfer finished product to distribution center in an Affiliated Company.


Parallel Valuation

Cost center Raw material

Semifin. material

Finished product

Distribution center

Sales order

Production order

Production order

Company code 1PrCtr1

Company code 2PrCtr3 70 70 75 L G P 70 70 75 100 120 CCtr 20

Company code 3PrCtr4

PrCtr2L G P

75 L G P 70 70 70

L 120 G 90 P 140L 120 220 240

L

220

G 90 P 140

G 90 P 240


Profit and Loss Statements

Revenue COS Margin

Company Code 2 Legal Group 220 90 120 90 100 0

Profit Center 3 240 140 100



Benefits:

Parallel Determination of Costs of Goods ManufacturedIt is now possible to transfer depreciation values from FI-AA according to two different accounting principles into Cost Center Accounting. The depreciation costs can then be included in the activity rates for the work performed and in the costs of goods manufactured, both of which are calculated at period close. You can update the ledger groups / accounts in FI-GL with inventory values calculated according to two different valuation methods. For example, Where CO Version 0 represents the leading valuation (IFRS), you can calculate the actual costs using the periodic costing run and update the inventory values in the leading ledger in FI-GL. Where the second CO Version represents the local valuation (GAAP), you can calculate the actual costs using an alternative costing run and update the inventory values in the local ledger in FI-GL. If your leading valuation is based on standard costs and your local valuation based on actual costs then CO Version 0 represents the leading valuation (IFRS) and is used to determine the standard costs. The second CO Version represents the local valuation (GAAP). Here you can use the periodic costing run to update the inventory values in the local ledger in FI-GL.


Value Flow for Parallel Determination of Costs of Goods ManufacturedAsset AccountingPerform Depreciation Run

Depreciation Area 01 (IFRS)

Depreciation Area 02 (Local GAAP)

Ledger 0L (IFRS)

Ledger N (Local GAAP)

ControllingUpdate of Depreciation Expenses by Cost Center and Version

Version 0 (legal valuation)

Version N (parallel COGM)

ControllingDirect Activity Allocation at standard; Actual Rate Calculated at Period Close

Version 0 (legal) (Standard rate)

Version 0 (legal) (Actual rate) Version 0 (legal) (Actual rate)

Version N (par. COGM) (Actual rate) Version N (par. COGM) (Actual rate) Version N

Actual CostingPeriodic Costing Run Updates either leading valuation or local valuation*

OR

Actual CostingAlternative Valuation Run Updates local valuation if both valuations use actual costs*

(par. COGM) (Actual rate)


Thank you!


Stock in Transit and Actual Costing - SAP Ramp-UP - Janet Dorothy

periodic costing

create billing

perform goods

perform goods

receivers

senders free

cost component

price difference

Text of Stock in Transit and Actual Costing - SAP Ramp-UP - Janet Dorothy

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