SAP – Controlling - Production Cost

•      Cost Object Controlling
•      Product Costing
•      Material Ledger

Cost Object Controlling Overview

• Cost Object Controlling is a management tool for tracing the costs incurred in manufacturing a product

• Within Product Controlling, you can monitor product costs:

• By period (Product Cost by Period) for repetitive manufacturing
• We use Production Cost Collector
• By order (Product Cost by Order) for discrete manufacturing

• The Product Cost by Period and by Order component allows you to do the following:

• Analyze the costs of manufacturing a product in the production cost collector or in the production order/process order
• Calculate and analyze variances between the target costs and the actual costs for each period

• In SAP system, the material valuation area is to be carried out at plant level to ensure that costing of materials must be performed at the plant level
• All legal entities are using the Cost Estimate with Quantity Structure functionality to determine the prices of the materials through creation of a standard cost estimate for costing materials that have a quantity structure
• The results of the standard cost estimate are used to valuate the materials at standard prices. When you release the standard cost estimate, the price in the material master is updated as the standard price and the materials are revaluated. From this point on, all the material movements are valuated at the new standard price.

• Global Costing:

• All new material masters all relevant master data have been completed successfully, a new standard cost estimate must be created, marked, and released prior to any goods movements
• Creation of a material standard cost estimate valid for the period of one year
• Before year end, Finance needs to create a new standard cost estimate for all materials in the company for the next year
• Mark the standard cost estimate as the future price before year end
• Release the standard cost estimate as the current price on the 1st January

Cost Components

• Material cost estimate with cost component split provides a breakdown of the price into detail components
• Used for analysis purpose in Product Costing and in Actual Costing and in Profitability Analysis

• Examples of possibles cost components:

• Input Materials
• Freight
• Duties
• Tolling fees
• Labour
• Machine Costs
• Energy
• Waste
• Quality
• General Factory Ohd
• Material Overhead
• Building Overhead
• Group uplift

Actual Costing / Material Ledger

• Actual Costing / Material Ledger fulfills two basic objectives:

• The ability to carry material prices in multiple currencies/valuations
• Actual Costing:
  • Uses Periodic Unit Price to valuate material inventories, such as raw materials as well as semi-finished and finished products
  • Periodic Unit Price is updated after all goods movements are revaluated with actual results from
    • Production variances
    • Purchase price differences
    • Invoice differences, exchange rate differences

• PUP - During the period

• During the period all transactions are valued at standard cost as a preliminary valuation
  • SAP collects all valuation relevant transaction data in the material ledger for a period
    • Price Differences
    • Exchange rate differences
    • Production variances
  • Differences from the preliminary valuation price are posted to price difference accounts

• PUP – At the end of the period

• All material movements are entered for the month. The Material Ledger is closed.
• Actual price (periodic unit price) is calculated for each material for the period
• Period end revaluation consists of two levels:
  • Single-level price determination
  • Multi-level price determination

• PUP – Closing: Single-Level Price Determination

• SAP calculates the PUP based on the sum of the price differences, exchange rate differences, and production variances in relation to the cumulative inventory quantity and value
• Weighted average cost is used to determine PUP
• PUP updated in Material Master (statistical)
• No variances are rolled to the next production level
• Consumption

• PUP – Closing: Multi-Level Price Determination

• An actual quantity structure is determined for all materials within a plant based on goods movements
• Variances associated with consumption of lower level materials are rolled up to the higher levels of this actual structure
• For e.g., the variances associated with the raw materials consumed in the finished product are rolled up to the finished product calculation of the PUP
  

• PUP – Closing: Closing Entries

• Revaluation of inventory with the multi-level prices calculated. Postings are made to balance sheet stock accrual account for the increase or decrease of stock values based on the comparison of PUP against standard cost in the previous period and auto-reversal of the accruals in the current period
• Actual vs. Standard cost component split is calculated
• Periodic revaluation on cost of sales made to CO-PA for differences between actual and standard cost component split

Material Ledger Standard Reports

• CKM3 – Material Price Analysis
• S_P99_41000062 - Material List: Prices and Inventory Values
• S_ALR_87013181 - Material Ledger Data Over Several Periods

I. INTRODUCTION

Purpose:

When the customer misses the payment for the outstanding invoice within specified payment due date. The dunning letter is generated via sap program and send at customer address for reminding the customer outstanding payment

Requirement:

The dunning system enables to trace liable customers who have not paid their open invoices within a given time span. It enables you to handle the process from, for example, sending a reminder to customers of their outstanding payments through to referring such customers to collections agencies.

The dunning system covers the following documents:

1. Open A/R invoices, including invoices that are partially credited or partially paid

2. Invoices that include installments

3. A/R credit memos

4. Incoming payments that are not based on invoices

II. CONFIGURATION:

1.Create Dunning Keys

We define dunning keys in this step. Dunning keys limits the dunning level of an item.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Basic Setting for Dunning > Define Dunning Keys

Tcode: N/A

2.Define Block reason for Dunning Notices

In this step, we define the reasons for a dunning block under a key. The key can be entered in an item or in the account of a Customer master. Blocked items or accounts are not considered for the dunning run

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Basic Setting for Dunning > Define Dunning Block Reasons

Tcode: N/A

3.Define Dunning Procedures

We can create Dunning text, Dunning level, Dunning Charges and Company code assignment in the dunning procedure

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

4.Create Dunning Interval in days to Dunning Procedures

We determine at which intervals the allocated accounts are to be dunned for every dunning procedure. During every dunning run, the system then checks whether the run date is at least this number of days (14 days) since the date of the last dunning run.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure and click “Choose” Button

5. Define  Dunning Levels to Dunning Procedures

In this step, we determine number of dunning level set up in dunning procedure.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure and click “Choose” Button

6.Define  Dunning Charges to Dunning Procedures

In this step we add the dunning charge as per the dunning level. This is like an administration charge to dun the customer. Currency Euro is assigned during adding the dunning charge

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Charges” button

7.Define Minimum Amounts to Dunning Procedures

Minimum Amount are customized to charge the administration charge to customer with reference to dunning level

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Minimum amounts” button

8.Assign  Dunning Texts and forms  to Dunning Procedures

For inserting dunning forms, click Dunning Texts and assign the required forms for the dunning text with reference to dunning Level. In case the customer has different language and the form contains different language, then please follow the document attached to translate the source language to target language.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Dunning Texts” button

9.Define Dunning level  to Dunning Procedures

Click the dunning levels and input days in Arrears for each dunning levels.

Select Always Dun in legal dunning proc for not missing any dunning notices.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Dunning Levels” button

10.Assign Special indicator to Dunning Procedures

In this step, we have assigned Special Indicator Reserve for Bad Debt to dunning Procedure.

Path: IMG > Financial Accounting (New) > Account Receivable and Account Payable > Business Transactions > Dunning > Dunning Procedure > Define Dunning Procedure

Tcode: FBMP

Choose the Dunning procedure, click “Choose” Button, and choose “Sp. GL indicator” button

11.Assign Company Code to Dunning Procedures

We have assigned company code with reference to Dunning Level and not by Dunning area

Path: N/A

Tcode: OBVU

12.Assign Sort Fields to Dunning Procedures

In this step, we assign Sort field K1 and Sort field P1 to Company code.

K1 will control the header content and P1 will control line item while printing the contents

Path: N/A

Tcode: OBVU

III. PREPARATION OF CUSTOMER MASTER DATA FOR DUNNING PROCEDURES:

1. In this step, we insert Dunning procedures in the customer master (Correspondence tab).

2. We have to maintain the Language field in the customer master data (Address tab) to print the Dunning Notice as per there language, Dunning Text should also be maintained in reference to dunning level. So that the content of dunning notice will be different to dunning level.

3. For dunning run, this transaction should be performed by F150. This is a month end duty. Please insert Dunning date, Document posted up to date, Company code, Customer Number and save

a. In case we will specify the checks that are to be maintained by user before starting dunning the customer

- Dunning procedure should be maintained in customer master

- Verify in Customer master regarding Dunning block (Customer can’t be dunned if there is dunning block in customer master as well as line item)

- Verify in transaction FBL5N the customer Invoice should be overdue and Amount should be in debit balance and not in credit

- User should make sure the parameters are inserted correctly for Dunning date, Customer Number, Company code and Document posted till date

- Correct Printer should be inserted while printing the dunning notice

b.Dunning test for Credit Memo and Down payment

- Credit Memo

In the dunning run, we can offset existing credit notes with outstanding invoices. This affects the determination of the due date for payment and the dunning level. These are different for customer and vendor credit memos.

The dunning program assumes that credit memos are always due on the baseline date, unless they have been given a specific due date or are invoice-related. This means that credit memo dunning is not affected if you enter only one payment term manually in a line item.

For invoice-related credit memos, the dunning level is taken from the invoice, provided this is contained in the dunning proposal. All other credit memos due are assigned to the highest dunning level determined so far for the account they belong to. This means that these credit memos are cleared with the oldest invoices.

- Down payment

We can take down payments into consideration during the dunning run. When defining the dunning procedure we must specify which down payment types are included in the dunning run. To do this, we specify the special G/L indicators for these down payment types. The dunning program treats a down payment received as a credit memo and reduces the receivables by the amount of the down payment. Since down payments are only included in the dunning run in exceptional cases, each down payment item contains a field for the dunning block. The system sets this block automatically. The down payment also contains a due date field, which the system automatically fills with the document date. You can change these fields with the document change function.

III. EXAMPLE DUNNING LETTER: (German language)

Purpose

The purpose of this document is to provide a list of the top ten most viewed SAP Notes for EPM Financial Consolidation in the month of April 2013.

Overview

Below are the top 10 most viewed SAP Notes for EPM FC.

Please note, in order to view the contents of the SAP Notes, you will need to be logged into Service Marketplace.

Be sure to check out the Top 10 viewed SAP Notes for April 2013 for the SAP Financial Consolidation Suite!

Hi Guru's , I am doing Financial Statement version (FSV), How to transfer Net profir or Net Loss to Retained Earnings? Can any one help me with this regard. Thank you.

Purpose

The purpose of this document is to provide a list of the top ten most viewed SAP Notes for EPM Financial Consolidation in the month of May 2013.

Overview

Below are the top 10 most viewed SAP Notes for EPM FC.

Please note, in order to view the contents of the SAP Notes, you will need to be logged into Service Marketplace.

.

Example with program: TFC_COMPARE_VZ – Comparison: Documents and Transaction Figures

For more details: Have a look on SAP Course: Financial Closing AC205

Or

SAP Help: http://help.sap.com/erp_fcc_01

I am looking forward to your feedback, answer and discussion.

1.Find the functions under following menu path:

2.How to add units in organisational command structure:

Take a look/and add some more if needed with clococ.

SAP has already entered controlling area and company code.

          You can organise your closing activities per organisational command structure if necessary.

3.How to make a template:

In Closing Cockpit we work with so called: task list template. Later you can add in this task list template all your activities for your closing activities.

            We use function: Clococ and go to Create Template

Here we can see the closing hierarchy which I have mentioned in point 2.

            Just try it out, the system will add all the structure automatically for you.

4.Now you can add your tasks under this folder:

Just go to the folder, right mouse and add task

I have added in SAP Financial Closing Cockpit:

System should run program TFC_COMPARE_VZ automatically with variant z_cloco.

I have entered this variant before. You also can add the variant during your work in FI closing cockpit.

We have some different types of tasks.

We also can enter offset time in accordance to cut off date of month end closing.

5.Enter Task List:

Call Function clocot. We will choose our “z_test”.

Then I will create periodic task list.

I have entered the data, and set status to released.

Then we take a look in closing cockpit about status of our task.

Our expectation is: The job has been ended successfully. ;-)

6.We go to Closing Cockpit:

We use function: cloco

We can see the task has been ended successfully without errors.

I am looking forward to your valuable feedback.

All the best erwin

Dear SAP GURU's,

please help me in the below mentioned issue.

A business requirement is to scrap obsolete material and the profit center assigned to the material master must be posted at the scrap transaction.  There is a profit center assigned to the material.  The inventory scrap will post to a scrap GL expense account with a cost object (currently is IO).  The cost object has assigned to another profit center.  The requirement is the profit center on the scrap transaction should be the profit center defined in the material master.  I have done a test.  The scrap transaction initial will pick up the profit center defined in material master and then it is replaced by the profit center defined in the cost object at OKB9 process time. I don't want profit center overwritten OKB9 settings at process time.

Note: this document is relating to singpore tax invoice postings in FI

some cases invoices received in foreign currency. but, GST amount should be posted and reported in SGD only. if customers or clients using SAP reporting currency (Local Currency: SGD) in this case there will not be any affect in GST amounts will be calculated correctly.

some customers using Local Currency other than SGD, in this case if tax invoice in foreign currency (other than SGD) but, fixed exchange rate for GST will be advised in Tax Invoice seperately.

while posting invoice using  FB60 system will determine exchange rate based on exchange rate determination settings. but, the challange is to maintain different exchange rate for GST line item correctly.

For Eg:-

   Define Accounts for Exchange Rate Difference Postings

Maintain GL Account for Exchange gain or loss posting relating to TAX

Posting entry using FB60

system will post realized exchange rate for GST line seperately for reporting.

Introduction:

At month end normally you have to make a VAT report for tax government.

Target:

You want to have all data concerning VAT in one report.

Take a close look at data concerning VAT because of risk reduction concerning VAT Audit.

You can download vat data for further inspection.

Attention: There is no automatic reconciliation with SAP VAT report RFUMSV00

Implementation:

Call SAP function:  S_P7D_67000163 SAP Tax Audit (one possibility to run this report)

Enter selection data and run the report

Result:

You have one report, and 18 different views on vat data,  as you can see on the screenshot below.

You also can download vat data and make some more analysing and  checking  in Excel or Auditing software.

Copy from SAP Tax Audit Handbook, 2008 SAP AG, Peter Schiwek and Klaus Olbrich, page 15

Further information and description:

SAP TAX AUDIT Handbook, Version 2.0 by Peter Schiwek and Klaus Olbrich

SAP AG Walldorf 2008

SAP Note: 1091606

This handbook is available on SAP Marketplace.

Hope this is helpful information  for your work and supporting the customers needs.

all the best Erwin

Introduction:

Purpose of internal control

Some companies are facing challenge to implement an internal control system.

Big companies listed on a stock exchange are forced by law to implement a system of

Internal control and risk management, SAP GRC Solution might be a good and valueable choice.

Small or medium sized companies who are not willing to implement a SAP module at the moment, but also want to have some kind of internal control can use SAP AIS for this purpose. (Business and System Audit)

To have some kind of automatism they can combine SAP AIS with SAP closing cockpit

Implementation of internal control with SAP AIS and SAP Closing Cockpit:

1. Entering SAP AIS menu:

Select: other menu and enter (as instance) *SAP*Auditor

Select SAP composite role

SAP AUDITOR is the “master role”  there are many roles available for special purpose like:

SAP Auditor for AR, FA or TAX. When you choose one of these roles the menu has

only functions concerning TAX or FA.

SAP AIS module is available

In this menu you will find hundreds of functions for control. One main advantage is,

that SAP provides all these functions in ONE menu

The menu also has some main topics like:

Making System Audit: Checks concerning security

Business Audit: Checks concerning financial reporting

1. Using SAP Closing Cockpit:

You can use SAP Closing Cockpit to run functions automatically.

From SAP EHP6 an additional task for internal control is available

1. Building a Risk and Control Matrix in Excel

You can set up risk and control matrix as an instance for:

Fixed Assets, Accounts Receivables/Payables, General Ledger, Bank Accounting

Your Risk and control matrics might look like this example:

First column: Target

Second column: Risk

Third column: Cecking  activity

Fourth Column: How control activity it is supported by SAP AIS

In the SAP AIS menu you also can find a lot of folders named CONTROLS.

Let yourself be inspired from these control routines, and use it for your risk and control

matrics

Example for control routine

Target: Check if posting have been made promptly and accurate time.

Risk: Postings have not been made contemporary, and might have some bad impact on

Quality of financial reporting

Checking activity: Using function S_ALR_87100998, here you have 3 statistical reports and 4

ranking reports.

Documentation:

Yes, this is not SAP GRC, so you have to make documentation manually.

In my opinion, it is possible setting up some kind of robust internal control system by combining

SAP AIS + SAP Financial Closing Cockpit.

Thank you for your valuable feedback,advice and discussion.

All the best

Erwin

Further information:

Find presentation about SAP AIS on SAP Service Marketplace.

SAP Bank Reconciliation Process

SAP Bank Reconciliation Process

• System provides automatically as well as manually, transaction reconciliation facility for all receipts and payment entries in the bank statement and our bank book.
•    System provides list of un-reconciled entries, for further decision making and matching.
•    In SAP system the reconciliation process is known under two methods, viz. Manual and Automatic.
•    Every Bank account will have 4 General Ledger Accounts. First will be a Main GL for the bank, second will be “Incoming clearing” for all receipts, third will be “Outgoing Clearing” for all Payments. and fourth will be “unreconciled account”.
•    After the reconciliation process, payment and receipt entries in the incoming, outgoing and unreconciled GL will be transferred in to the bank Main GL.
•    The balances in the main bank account will be equal to the bank statement amount.
•    The bank book balance shall be equal to the net balance of the all four bank GLs put together.

Manual Bank reconciliation Process – (FF67) (Non-electronic bank statement)

In case of Non-Availability of bank statements in the desired electronic formats, we can create and upload Bank statement manually.

Every bank statements that are entered will be per bank account number and are identifiable by a unique number and statement date to be provided by the user.

In the header data, Bank statement opening balances and closing balances are provided before creating the bank statement. This is the control check after entering all the lines in the bank statement.

After providing the bank statement header data, we need to enter or create the bank statement in the system. The bank statement data can also be copied from an excel file to create the bank statement in the system.

The system then automatically makes the postings to the bank account, bank clearing account along with the payment clearing. We have two options here:

Immediate posting (recommended)
Create a batch input session, then run it.

The posting of this statement or after batch input session. This process creates postings in the main bank account. The accounting entries are passed as mentioned below.

Main Bank A/c Dr
Incoming Clearing A/c Cr

Outgoing Clearing A/c Dr
Main Bank A/c Cr.

Unmatched entries generated by the system are to be matched manually through (FEBAN). Later on these unmatched entries need to  be manually transferred to “Unreconciled Account”.

Electronic Bank reconciliation Process – (FF_5)

For the process of automatic bank reconciliation, electronic bank statement is required in pre defined format only.

This formats can be either in “multicash format” or “MT940

Uploading the bank statements received from banks in the above mentioned format using transaction code FF_5.

After the uploading of this statement, the process creates postings in the main bank account. The accounting entries are passed as mentioned above.

The un-reconciled items will remain as open items in “unreconciled account”  which can be reconciled manually.

Reprocess Un-reconciled items – (FEBAN)

•    Through this session we can clear the un-posted (un-reconciled) items from the above mentioned manual & automatic processes.

•    The session enables us to select any of the bank statements created by us based on statement date and identification key.

•    We can correct the selected items one after another. At the end, post again for all changed items.

SAP T Code To be used

  Manual Bank reconciliation Process – (FF67)
Electronic Bank reconciliation Process – (FF_5)
Reprocess Un-reconciled items – (FEBAN)

Print Correspondence through Mail

Use

With the Correspondence function, you can generate and send out special correspondence relating to the financial transactions managed in the SAP R/3 System.

Correspondence can be sent directly from the system via fax, e-mail, SWIFT Files or IDocs (in money market and forex trading), or output via a printer.

Correspondence serves documentation and helps to match financial transactions that have been carried out

Menu

      SAP Easy Access -> Accounting -> financial Accounting -> general Ledger -> Periodic Processing -> Print Correspondence -> F.62  Internal Documents

click on yes button