JanetSalmon

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TheAuthorofthisE-Bite

JanetSalmoniscurrentlychiefproductownerformanagementaccountingatSAPSEandhasaccompaniedmanydevelopmentstotheControllingcomponentsofSAPERPFinancialsasbothproductandsolutionmanager.SheregularlyworkswithkeycustomersandusergroupsintheUnitedStatesandGermanytounderstandtheirControllingchallengesandrequirements.LearnmoreaboutJanetatwww.sap-press.com/accounting-entries-in-sap-erp-controlling_3954/author/.

WhatYou’llLearn

Thebestwaytogetafeelforthenatureoftheaccountingentries—alsoknownasactualpostingsorjournalentries—istowalkthroughabusinessprocessfrombeginningtoend,examiningwhattransactionsinitiatethepostingsandwhatdataisthenavailableforyoutomonitorinCO.ThisE‐Bitefollowstworawmaterialsfromtheirinitialpurchasethroughthemanufacturingprocess,wheretheyareconvertedintoafinishedproduct(amusicCD)forfinalsaletothecustomer,anddiscussestheissuesthatacontrollermonitorsateachstage.We’llalsolookatsomespecialcasesinadditiontothissimpleexample.

1IntegratedProcessFlows:Buy,Make,andSell

1.1ProcuretoPay

1.2PlantoManufacture

1.3OrdertoCash

2DistributionofUsageVariances

2.1CapturingPhysicalInventoryDocuments

2.2DistributionofUsageVariances

2.3DistributionofActivities

3IntegratedProcessFlows:OtherLogisticsScenarios

3.1ProductCostbyOrder

3.2ProductCostbyPeriod

3.3ProductCostbySalesOrder

3.4ProjectControlling

3.5ControllingforMaintenanceandServiceOrders

4CorrectionsorAdjustmentPostings

4.1RepostingLineItems

4.2CorrectinganActivityAllocation

4.3RepostingValues

5Cross-CompanyPostings

ThisE-BiteisanexcerptfromControllingwithSAP—PracticalGuidebyJanetSalmon.

1IntegratedProcessFlows:Buy,Make,andSell

BecauseoftheintegratednatureofSAPERP,it’srareforacontrollertomakeamanualposting.Inmanycases,thecontrollersimplymonitorsthepostingscreatedinLogisticsandHumanCapitalManagementandanticipatestheirimpactontheControllingcomponentofSAPERPFinancials(whichwe’llrefertointhisE-BiteasCO).

Acontrollerinamanufacturingenvironmentmonitorsthefollowingkeylogisticsprocesses:

Theprocurementprocessandtheimpactofthepricehisbuyersareabletonegotiateontheproductcosts

Themanufacturingprocessandtheimpactofthevalueaddedduringproductionontheproductcosts

Thesalesprocessandtheimpactoftheproductcostsonprofitability

Thissectionisbasedonaverysimpleexampleinvolvingthesaleofafinishedproduct(ACT-DCD)tothefinalcustomer,lookingathowtherawmaterialsACT-BCDandACT-LCDareprocuredforuseinthemanufactureofthisfinishedproductandhowtheserawmaterialsareissuedtoproductionanddeliveredtostockasthefinishedproductforsale.Ineachstep,we’lllookatthelogisticsstepsandthenexplaintheirimpactonCO.

1.1ProcuretoPay

Let’sstartbylookingathowCOworksforamaterialpurchasedtostockforuseinamanufacturingprocess.Figure1showsthebasicflowoftheprocure-to-payprocess.Usually,amaterialsrequirementsplanning(MRP)runandthecreationofapurchaserequestprecedesthecreationofthepurchaseorder,butwe’llstartinthemiddleoftheworkflowwiththepurchaseorder(purchaseorderprocessingstep),becausethisiswherethechoiceofaccountassignment(costcenter,project,neutralstock,andsoon)impactshowthevalueswillbetransferredtoCO.

Figure1Procure-to-PayProcess

Thepurchaseorderisanagreementwithavendortosupplymaterialsatagivenprice.Thispriceisestablishedinapurchasinginforecordthatdefinestheagreementbetweenthesupplier/vendorandthebuyer.Thispricecanbeusedtosetthestandardpriceinthematerialmaster,butitmaychangedependingonthebusinessclimate.Thereceiptofthematerialsintostock(goodsreceiptstep)andtheinvoice(invoiceprocessingstep)referencethispurchaseorder(you’llhearthisprocessreferredtoasathree-waymatch).Thegoodsreceiptisvaluedinitiallyusingthepriceinthepurchaseorder,andtheinvoicemayadjustthisprice.Thecontroller’sconcerninthisprocessispurchasepricevariances.

1.1.1PurchaseOrderProcessing

Thefirststepistocreateapurchaseordertorequestthesupplyofourtworawmaterialsfromavendor.Tocreateapurchaseorder,useTransactionME21NorfollowthemenupathLOGISTICS•MATERIALSMANAGEMENT•PURCHASING•PURCHASE

ORDER•CREATE•VENDOR/SUPPLYINGPLANTKNOWN.Thenenterthevendor,purchasingorganization,andcompanycodeintheheaderand,below,thematerial,plant,andquantityforeachitem(seeFigure2).

Toviewthepriceofeachitem,selecttheitemandselecttheCONDITIONStab.HereweseethatthefirstitemfortheblankCDcosts1,100Mexicanpesosper100units.Thismayalreadybethesourceofapurchasepricevarianceiftheagreementwiththevendorisbasedonadifferentpricethanthatcurrentlyinthematerialmaster.Thecontrollermightalsochecktheaccountassignment.Inourexample,columnA(ACCOUNTASSIGNMENTcategory)isblank,meaningthe

purchaseorderwillbedeliveredtoregularinventoryandcanbeusedbyanyproductionorderthatreservesit.Thenextstepistorecordthearrivalofthegoodsintostock.

Figure2CreatingaPurchaseOrder(PurchaseOrderProcessingStep)

1.1.2PostingaGoodsReceipt

Nowwe’llcreatethegoodsreceiptforthepurchaseorderbyreferencingthepurchaseorderandthepricescontainedinit.TheeasiestwaytodothisistostayinthePURCHASINGmenuandselectFOLLOW-ONFUNCTIONS•GOODSRECEIPTorTransactionMIGO.EnterthepurchaseorderfromFigure2asareference.

Figure3showsthetwoitemsweorderedandindicatesthatthey’retobedeliveredintounrestrictedstock.Bycomparison,inSection3.3we’lllookatwhathappensifgoodsaredeliveredtosalesorderstock,wheretheycanonlybeusedfortherelevantsalesorder.IfyouselecttheACCOUNTASSIGNMENTtab,you’llseethatthere’snoaccountassignmenttoaCOobject(aswesawinFigure2),butthatthepostingwillbeassignedtoaprofitcenterusingtheprofitcenterenteredinthematerialmasterfortheitemsconcerned.Thisisthestandardprocessfortheprocurementofstockmaterials.Bycomparison,inSection3.1we’lllookatapurchaseorderforoutsourcedmanufacturinginwhichthepurchasecostsareassignedtoaCOproductionorder,andinSection3.4we’lllookatapurchaseorderforaproject-specificpurchaseinwhichthepurchasecostsareassignedtoaWBSelement.

Figure3CreatingaGoodsReceipt(GoodsReceiptStep)

Goodsreceiptsforstockmaterialsdon’tshowupasactualcostsonacostcenterororderuntilthematerialisissuedtoproductionlater.However,iftheMATERIAL

LEDGERisactiveintheplantconcerned,thegoodsreceiptisrecordedintheMaterialLedger.Todisplaythepostingsforthegoodsreceipt,useTransactionCKM3NorgotoCONTROLLING•PRODUCTCOSTCONTROLLING•ACTUAL

COSTING/MATERIALLEDGER•INFORMATIONSYSTEM•DETAILEDREPORTS•MATERIALPRICE

ANALYSIS.EnterthematerialnumberfortheblankCD,theplant,andthecurrentperiod.Figure4showsthatthepriceinthepurchaseorderdiffersfromthestandardpricefortherawmaterialinthematerialmaster.Thepreliminaryvaluationisbasedonthestandardpriceforthematerial(10pesosperunit),whereasthepriceconditionsinthepurchaseorderitemwere11pesosperunit.Thisdifferenceof10pesosfor10unitsisrecordedintheMaterialLedgerandwouldbeincludedintheactualcostsforthematerialduringtheperiodiccostingruntocalculatetheperiodicunitpriceforthematerialduringperiodclose.

Figure4MaterialPriceAnalysisfollowingGoodsReceipt

SystemPerformancewiththeMaterialLedger

WhenpeoplefirsthearthattheMaterialLedgerstoresanextradocumentforeachgoodsmovement,invoice,andsoon,theytendtoworrythatthiswillputanunnecessaryburdenontheirsystem.TheactofwritingaMaterialLedgerdocumentaddsacoupleofpercenttothetimeittakestopostthegoods

receipt.Ifyouwanttofindmoreinformationaboutsystemperformancemetrics,checktheinformationinSAPNote668170.

ThePURCHASEORDERlineintheMATERIALPRICEANALYSISscreenshowsboththeMaterialLedgerdocumentnumber(1000000315)andthepurchaseorderitem(4500018780)thatinitiatedtheposting.TodisplaytheMaterialLedgerdocumentcreatedduringthegoodsreceipt,clickonthedocumentlineinFigure4.ThistakesyoutotheMaterialLedgerdocumentshowninFigure5.Asthecontroller,youwon’thavecreatedthegoodsreceiptaswejustdid,sonormallyuponcheckingthislistyoumightclickontheSOURCEDOCUMENTbuttontodisplaythegoodsreceiptdocumentifyouneedtocheckthedetailsofwhatweenteredinFigure3.Todisplayalltheaccountingdocumentsassociatedwiththegoodsmovement,clickontheACCOUNTINGDOCUMENTS…button,asshowninFigure5.

Figure5MaterialLedgerDocumentandLinkstoAccountingDocuments

ThegoodsreceipthasbeenrecordedasanaccountingdocumentintheGeneralLedger.Wecandisplaythisaccountingdocumentbyselectingitfromthelist.Figure6showsthegoodsvaluation(100pesos)andthevariance(10pesos)forACT-BCD.OurexamplepredatestheabilitytoincludetheprofitcenterandthefunctionalareaintheGeneralLedger,sothereareseparatedocumentsforProfitCenterAccountingandtheSpecialLedger.

Figure6AccountingDocumentforGoodsReceipt

Thenextstepistorecordtheinvoicefromthevendorforthesegoods.

1.1.3EnteringanIncomingInvoice(InvoiceProcessingStep)

Nowwe’llrecordthereceiptoftheinvoicefromthevendorforthedeliveryofthematerials.Torecordtheinvoice,returntothePURCHASINGmenuandselect

FOLLOW-ONFUNCTIONS•LOGISTICSINVOICEVERIFICATIONorTransactionMIRO.ForinvoicestobecapturedintheMaterialLedger,it’simportanttousetheLogisticsInvoiceVerificationtransaction(thatis,MIRO)ratherthantheInvoiceEntrytransaction(FB60)inAccountsPayable,becauseyouneedtoensurethattheinvoiceislinkedtothematerialpurchasedfortheMaterialLedger.Justaswesawforthegoodsreceipt,theinvoicealsoiscreatedwithreferencetotheinitialpurchaseorder(seeFigure7).

Again,thecontroller’staskistomonitorthevaluesofsuchinvoicesintheMaterialLedger.TheMaterialPriceAnalysisreportshowninFigure8nowincludesasecondlinefortheinvoice(MaterialLedgerdocument1000000317,againwithreferencetothepurchaseorder4500018780).Inourexample,thevaluesarezerobecausethesupplierinvoicedfortheamountintheinitialpurchaseorder.However,therearesituationsinwhichasupplierinvoicesforadifferentamount.Forexample,it’scommoninthefoodindustryformilktobedeliveredbyvolumebutfortheinvoicetobebasedonthefatcontent(thehigherthecreamcontent,thehighertheprice).Thisresultsinapurchasepricevariancethatmostmanufacturerswanttopassontothecheeseproductsmadeusingthatmilk.

Figure7EnteringanIncomingInvoice(InvoiceProcessingStep)

Figure8MaterialPriceAnalysisfollowingInvoicing

Again,wecandisplaytheMaterialLedgerdocumentbyclickingontheinvoiceline.WecandisplayalltheaccountingdocumentsassociatedwiththisinvoicebyclickingontheMaterialLedgerdocument,asshowninFigure9.

Figure9MaterialLedgerDocumentandLinkstoAccountingDocuments

TochecktheGeneralLedgerdocument,selectACCOUNTINGDOCUMENTfromthelist.Figure10showsthatthevendor(1097,PueblaDigitalS.A.)hasinvoicedusforthesupplyofthetwomaterials.You’llalsonoticeadditionallinesforthevariances.

Figure10VendorInvoiceintheGeneralLedger

Nowreturntothelistofaccountingdocuments,whereweseeaCOdocumentthatrecordsallpostingstoCO-PAandthreeCO-PAdocuments.Todisplaythisdocument,selectoneofthePROFITABILITYANALYSISdocumentslistedinFigure5.Wechosethefirstdocument,800015733.

Figure11showsthecharacteristicsforthepurchasedmaterial,includingthematerialgroup,companycode,andplant.NoticethatthedocumentisrecordtypeB(directpostingfromFI),becauseitrecordsthevariancesfromtheGeneralLedger(i.e.,thosecapturedinFigure9),andthatonlythematerial-relatedcharacteristics(plant,materialgroup,division,andsoon)containvalues.Thisisbecauseatthisstagewedon’tknowwhichcustomerwillpurchasetheproductandtowhichsalesorganizationhe’llbelong.

Figure11ProfitabilitySegmentforRawMaterial

Todisplaythepostingforthepricedifferences,selecttheVALUEFIELDStabandscrolldown.Figure12showsthepricedifferencesinthecurrencyoftheoperatingconcern(here,Euros).Youcanswitchtothecompanycodecurrency(Mexicanpesos)byclickingontheCOCODECRCYbutton.Alsonoticethatwe’reinthelegalvaluation.We’lllookatthedifferencebetweenlegalandgroupvaluationinChapter5.

Figure12ValueFieldsShowingPriceDifferencesforRawMaterials

Normally,theprocesswouldcontinuewithanopeniteminAccountsPayableandapaymenttothevendorthatwouldclearthatopenitem,butwe’llmovestraightto

themanufacturingprocess,becausetheprocessesinaccountspayablehavenoimpactonCO.

1.2PlantoManufacture

Nowwe’lllookathowthematerialswejustpurchasedtostockareconsumedinthemanufacturingprocessandwhatinformationisavailabletoCOinthisprocess.Figure13showsthebasicflowofthemanufacturingprocess.

Figure13Make-to-StockManufacturing

1.2.1CreatingaProductionOrder(ConverttoProductionOrderStep)

Firstwe’llcreateaproductionorderformaterialACT-DCD.Normally,theproceduretocreateaproductionorderwouldbetohavetheMRPrundeterminedemandforthematerialandthengenerateaplannedorderthatwouldthenbeconvertedintoaproductionordersothattheproductionactivitieswouldbelinkedwiththeproductionplan,asshowninFigure13.Inoursimpleexample,we’llcreatetheproductionorderdirectlybyusingTransactionCO01orfollowingthemenupathLOGISTICS•PRODUCTION•SHOPFLOORCONTROL•ORDER•CREATEWITH

MATERIAL.Enterthematerialtobemanufactured(ACT-DCD),theplant(6000),andtheordertype(thiscontrolsmanyoftheconfigurationsettings).Thenentertheorderlotsize(thismaydifferfromthecostinglotsizeusedinplanning,givingrisetoMRPvariances)andthekeydatesfortheorder.Basedonthequantitiesandthekeydates,thesystemselectstherelevantbillofmaterial(BOM)todeterminethematerialcomponentsrequiredandtherelevantroutingtodeterminetheoperationsrequired.Thisisalmostexactlywhathappensifyoucreatethestandardcostestimateforthismaterial,butproductionmayhavemademinorchangestotheBOMandroutinginthemeantime,orthechangedlotsizemaygiverisetolot-sizevariances.Figure14showstheproductionorderheader.Giventhepotentialforlot-sizevariances,ourmajorconcernhereiswhetherthelotsize(here,fiveunits)isstandardornot.

Tounderstandwherethematerialusagecostsfortheorderwillcomefrom,let’sdisplaythematerialcomponentscopiedfromtheBOMbyclickingontheMATERIAL

COMPONENTSiconshowninFigure14.Figure15showsthecomponentoverviewandthetwomaterials(ACT-BCDandACT-LCD)requiredtomanufacturematerialACT-DCD.Whentheproductionorderisreleased,areservationwillbecreatedforthesematerials.NoticealsothattheBACKFLUSHflagissetinthatcolumnfor

bothofthesematerials.Thismeansthatinsteadofbeingissuedtothelinepriortoproduction,theirusagewillberecordedautomaticallyduringconfirmation.

Figure14CreatingaProductionOrder

Tounderstandwherethelaborandmachinecostsfortheorderwillcomefrom,let’sdisplaytheoperationscopiedfromtheroutingbyclickingontheOPERATIONS

iconshowninFigure15andthenselectingthefirstoperation.

Figure15MaterialComponentsinaProductionOrder

Figure16showsthefirstoperation(0010)beingperformedatworkcenterWP530-00.Accordingtothestandardtimesfortheoperation,onehouroflaborandonehourofmachinetimewillberequiredtoproducefiveunitsofthefinishedproduct.ThesestandardvaluesarelinkedwiththeactivitytypesforlaborandmachinetimeinCostCenterAccounting.

Figure16OperationinaProductionOrder

Eachtimeaproductionorderiscreated,apreliminarycostestimateiscreatedautomatically(thiscanbedeactivatedinCustomizingforperformancereasons,whichwillaffectwhetherthiscostestimatewillbeavailableforvarianceanalysis).YoucandisplaytheresultofthecostestimateeitherbyfollowingthemenupathGOTO•COSTS•ANALYSISintheproductionorder(seeFigure17)orbyselectingtheappropriatedetailreportintheCOSTOBJECTCONTROLLINGmenu.Noticeatthisstagethattheactualcostsarezero,becausewehaven’tyetreleasedtheorderforpostings.

Figure17PlannedCostsfortheProductionOrder

Thegoodsissuelineinthecostanalysisreportshowsthetworawmaterialstogetherwiththeirstandardcosts.Theconfirmationlineshowsthestandardvaluesfortheactivitiesateachoperation.Apercentageoverheadhasbeenapplied.Youmayalsowanttoincludeadditionalcostingitemsforone-offcosts(suchasworkschedulingorqualitychecks)inyourordercosts,buttemplateallocationtoincludethesecostsfallsoutsidethescopeofthisE-Bite.

Inaddition,thevalueofthegoodsreceipthasbeencalculated,againusingthestandardprice.Thismakesthepreliminarycostestimatelookslightlydifferentfromthestandardcostestimate,becauseitsimulatestheeffectofdeliveringthefinishedgoodstostock,whereasthestandardcostestimateonlyshowstheinputs.Noticethatthere’salreadyavariance,becausetheplannedcostsfortheorderarenotidenticaltothestandardcostsforthematerial.SuchvariancesareconsideredMRPvariancesbecauseitisMaterialRequirementsPlanningthathasresultedinachange,forexample,tothelotsize.

We’llnowshowhowthecostsofthegoodsissuesandoperationsareassignedtotheproductionorder.Beforeyoucanperformthesesteps,youneedtoreleasetheorderbyselectingFUNCTIONS•RELEASEorchoosingtheRELEASEbuttonshowninFigure14.

1.2.2IssuingMaterialstoaProductionOrder(GoodsIssuesStep)

Forpostingthegoodsissuesfortherawmaterials,therearetwofundamentallydifferentapproaches:

Youcanissuetherawmaterialsindividuallytotheshopfloorandposttheconfirmationandthegoodsreceiptlater.Thisapproachiscommoninbatch-oriented,discreteproductioninwhichthere’safocusoncapturingasmuchdetailedinformationaspossibleontheworkorder(inthiscase,theproductionorder).Usethepumpexample(materialP-100)tofollowthisapproachinthedemosystem.

Youcanbackflushthegoodsissue,thegoodsreceipt,andtheconfirmationinasinglestep.Backflushingiseasierinthesensethatallthetransactionshappeninonego,butitcanmeancompromisingaccuracybecauseofthetacitassumptionthattheBOMandtheroutingareaccuraterepresentationsoftheamountofmaterialtobeissuedandtheamountoftimetobeworkedforagivenlotsize.Backflushingiscommoninthechemicalandpharmaceuticalindustries,inwhichit’softenphysicallyimpossibletoissuegoodstoindividualoperationsormeasureexactlyhowmuchofthecomponentisbeingissued.It’salsoconsideredabestpracticeinleanmanufacturing,inwhichthere’sanemphasisonremovingunnecessarytransactions.We’llworkwiththisapproach.

Tocreatetheconfirmationattheheaderlevel,followthemenupathLOGISTICS•PRODUCTION•SHOPFLOORCONTROL•CONFIRMATION•ENTER•FORORDERoruseTransactionCO15andentertheordernumber(you’llfindthetransactionsfor

confirmationsattheoperationlevelinthesamefolder).Weconfirmedthecompletionoffiveunitsofthefinishedproduct,resultinginthecreationofagoodsissueandagoodsreceipt(toseethese,clickontheGOODSMOVEMENTSbutton).Figure18showsthematerialsissued(movementtype261)andthegoodsreceived(movementtype101).Thecostsforthesematerialswillbeassignedautomaticallytotheproductionorder,incontrasttothesituationwehadinpurchasing.

Figure18GoodsMovementsAssociatedwiththeConfirmation

Ifwenowdisplayoneoftherawmaterials(ACT-BCD)wepurchasedpreviouslyintheMaterialLedgerusingmaterialpriceanalysis(TransactionCKM3N),wecanseethatofthetenunitswedeliveredtostock,fivehavebeenissuedtotheproductionorder(seeFigure19).Iftheperiodcloseweretooccurnow,wewouldneedtoapplyanypurchasepricevariancestothefiveunitsininventoryandthefiveunitsthathavebeenissuedtoproduction,andeachwouldreceivethepricedifferenceoffiveMexicanpesos.

Todisplaytheaccountingdocumentforthegoodsmovementandthecontrollingdocumentthatrecordstheissueofthegoodstotheproductionorder,selecttherelevantdocumentline(GIfororder)inFigure19.Figure20showstheMaterialLedgerdocumentwiththetwogoodsissues(negativequantities)andthegoodsreceipt(positivequantity).NowclickontheACCOUNTINGDOCUMENTS…button.

Figure19MaterialPriceAnalysisfollowingGoodsIssue

Figure20AccountingDocumentsforGoodsIssuesandReceipts

Todisplaythecontrollingdocument,selectitfromthelistofaccountingdocuments.Figure21showsthecontrollingdocumentwiththegoodsissuestoandthegoodsreceiptfromtheproductionorder.Thedocumentalsoincludesthecostelement(thelinktotheprofitandloss[P&L]account)andtheoffsettingbalancesheetaccount.We’veadjustedtheALVlayouttoshowthebusinessTransactionCOINintheheader.ThisidentifiesthepostingasonethatwasinitiatedinFinancialAccounting.

Figure21ControllingDocumentforGoodsIssuesandReceipts

1.2.3ConfirmingaProductionOrder(ConfirmationStep)

Nowlet’sreturntotheconfirmationdocumentfromtheGOODSMOVEMENTStab•ENVIRONMENT•SOURCEDOCUMENT,asshowninFigure18.ThiswilltakeustotheconfirmationdocumentshowninFigure22.Again,it’spossibletoeitherpostthefinishedquantityandhavethesystemcalculatetheactualhoursbasedonthestandardvaluesintheroutingortorecordthehoursworkedoneachoperationasseparatetransactions.Theindustrytendstodeterminewhichapproachismorecommon.Inthediscreteindustry,operation-basedconfirmationprevails.Inthechemicalindustry,suchdetailcanbevirtuallyimpossibletoachieve,andtheassumptionsintheroutingmustbeassumedtoapply.Inourcase,youcanseethatfiveunitsoffinishedproducthavebeenconfirmed.Theconfirmationresultsinachargetotheproductionorderfortheproductionactivitiesperformed.

Notethattheconfirmationisalsousedtorecordscrapeitherbyoperationorforthewholeorder,asweseehere.Alsonoticethefieldforenteringrework.We’lllookattheimpactofreworkinSection3.1.

Figure22ConfirmingaProductionOrder

Becausetheactivityconfirmationisnotmaterialrelated,youwon’tfinditintheMaterialPriceAnalysisreport.Todisplaytheactivityusageforthefinishedproduct,usetheValuatedQuantityStructurereportbyfollowingthemenupathCONTROLLING•PRODUCTCOSTCONTROLLING•ACTUALCOSTING/MATERIALLEDGER•INFORMATIONSYSTEM•DETAILEDREPORT•VALUATEDQUANTITYSTRUCTUREorusingTransactionCKMLQS.Enterthefinishedmaterial(ACT-DCD),theplant,andtheperiod.

InFigure23,weseethefinishedproduct,thetworawmaterials,andthetwooperationstogetherwiththerelevantquantityinformation.

Figure23ValuatedQuantityStructureforaFinishedProduct

Todisplaytheactualcostsintheproductionorder,followthemenupathGOTO•COSTS•ANALYSIS.Figure24showsthatallquantitieshavebeenrecordedtoplan(seeTOTALACTUALCOSTScolumn),becausewebackflushedthematerialsandactivities.However,weseesignificantvariancesintheactivityprices.Allthat’smissingistheoverheadcalculation,whichisnormallyappliedatperiodclose.

Whenworkingwithareportlikethisone,thegoalofthecontrolleristomonitorproductionvariances.

Figure24ActualCostsforaProductionOrder

OnesourceofconfusionisthetermactualcostsinareportliketheoneshowninFigure24.Thesecostsarenotactualcostsinthefullsenseoftheword,becausetheyaredeterminedbymultiplyingtheactualquantitiesrecordedduringbackflushingbythestandardcostsforthematerialsandactivities.Atthispoint,anypurchasepricevariancesmaynotbeknown,becausethevendormaynothavesubmittedhisinvoice.Wesawinthefirstsectionthatthevaluesinthepurchasinginforecorddifferedfromthestandardpriceforoneoftherawmaterials.Therealactualcostsforthematerialwillonlybecalculatedusingtheperiodiccostingruntotransferanypurchasepricevariancesfortherawmaterialstoproductionaspartoftheperiodclose.

Thecostpostingtotheproductionorderhasalsocreditedthecostcenterthatprovidedthemachinetimeandlabortimetoproduction.YoucandisplaythisactivitybygoingtoTransactionKSB1orACCOUNTING•CONTROLLING•COSTCENTER

ACCOUNTING•INFORMATIONSYSTEM•REPORTSFORCOSTCENTERACCOUNTING•LINEITEMREPORTS•DISPLAYLINEITEMSandenteringthenameofthecostcenter(CC530-00),thecostelementsunderwhichtheconfirmationpostingwasmade,andtherelevanttimeframe.Figure25showsthelineitemforthepostingtothecostcenter.NoticethatwhereasthegoodsmovementswerepostedunderbusinesstransactionCOIN,we’veextendedtheALVlayouttoshowthatactivityallocationsarepostedunderbusinesstransactionRKL.Again,thisallocationisbasedonastandardactivityrate,becausewedon’tyetknowhowmuchenergythecostcenterusedtosupplythisactivity,howmuchoverheaditabsorbed,andsoon.Atperiodclose,we’llbeabletocalculatetheactualactivitypriceandadjustthevaluesontheproductionordertotakeaccountofthis.

Figure25LineItemsforActivityPosting

1.2.4ViewingtheGoodsReceipt(GoodsReceiptStep)

Finally,wecandisplaythegoodsreceiptbylookingatthefinishedproductintheMaterialLedger.Figure26showsthatthegoodsreceiptforthefinishedmaterialhasbeencapturedatthestandardcost,becausethevalueinthePRICEDIFF.columniszero.

Figure26MaterialPriceAnalysisfollowingGoodsReceiptforFinishedProduct

TodisplaytheMaterialLedgerdocument,clickonthegoodsreceiptlineandthentheACCOUNTINGDOCUMENTS…button,asshowninFigure27.

Figure27DocumentsforGoodsReceipt

Fromhere,wecandisplaytheaccountingdocumentthatdocumentsthegoodsmovementintheGeneralLedgerandthecontrollingdocumentthatdocumentsthegoodsmovementsontheproductionorderthatwelookedatinFigure21.

1.2.5SettlingtheProductionOrder(SettlementStep)

Thefinalstepinourprocessusuallytakesplaceatperiodclose,whenoverheadisappliedtotheproductionorderandanyvariancesaresettled.Variancesarealwayssettledtoastockaccount,fromwhich,dependingonthepricecontrolforthematerial,theymayeitheraffectthematerialprice(movingaverageprice)orbeassignedtoavarianceorpricedifferenceaccount(standardprice).Ifyou’reusingCO-PA,they’llalsobesettledtotheprofitabilitysegmenttheresothatthecompleteproductcostsareavailableforanalysis.Inthisexample,wecanseethesettlementdocumentshowinghowthevariancesonourproductionorderweresettledtothefinishedmaterialACT-DCDandtotheprofitabilitysegmentforthatmaterial(seeFigure28).

Figure28DetailsofValuesIncludedinSettlement

WecanalsousematerialpriceanalysistodisplaythesettlementdocumentintheMaterialLedgerandcanagainusethedocumentlinkstodisplaythesettlementdocumentinCO,thepostingtopricedifferencesintheGeneralLedger,orthepostingofthevariancestoCO-PA,asshowninFigure29.Again,thepostingstoCO-PAwillbeassignedtothematerial-relatedcharacteristicsbecausewedon’tyetknowwhichcustomerwillpurchasetheproduct.

Figure29AccountingDocumentsforSettlement

Ofcourse,theproductionprocessdoesnothavetobeonlysinglelevel.Anotherproductionprocesscouldnowconsumethesemifinishedproductandperformfurtheractivitiestomanufactureafinishedproduct,buttheprocesswouldbeexactlythesamefromacontrollingpointofview,sowe’llnowlookathowtosellourfinishedproduct.

1.3OrdertoCash

Nowwe’lllookathowthematerialwejustdeliveredtostockisissuedtothesalesprocessandwhatinformationisavailabletoCOinthisprocess.Figure30showsthebasicflowofthesalesprocess.

Figure30Order-to-CashProcess

1.3.1CreatingaSalesOrder(SalesOrderProcessingStep)

Sometimesaninquiryorquotationprecedesthesale,butwe’llstartbycreatingasalesorderfortheproductACT-DCDthatwemanufacturedinthepreviousstep.Thesalesorderrecordstheagreementbytheorganizationtosupplythecustomerwithaparticularproduct.ThemainfocusfromacontrollingperspectiveisonthepriceconditionsandtheassignmenttoCO-PA.Thisisbecauseeverysalesorderitemgeneratesapreliminaryvaluationincosting-basedCO-PA.Theprofitabilitysegmentisderivedfromthecustomer,product,andotherorganizationalinformationinthesalesorder.

Tocreateasalesorder,gotoTransactionVA01orLOGISTICS•SALESANDDISTRIBUTION•SALES•ORDER•CREATEandentertheordertype,thesalesorganization,thedistributionchannel,thedivision,thesalesoffice,andthesalesgroup.Thenenterthenameofthesold-toparty(customer)intheorderheaderandthematerialandquantityintheorderitem.Fromacontrollingperspective,thesearethecharacteristicsthatwillformthebasisofyoursalescontrollingactivitiesinProfitabilityAnalysis.Figure31showsthecharacteristicsthatwillberecordedinProfitabilityAnalysisforthesalesorder.Noticenowthatweseebothproduct-relatedandcustomer-relatedcharacteristics.

Figure31SalesOrderItemandAssociatedProfitabilitySegment

Tocheckthem,onceyou’vecreatedyoursalesorderselecttheITEMDETAILSontheinitialentryscreenandthentheACCOUNTASSIGNMENTtab.NowclickonthePROFITABILITYSEGMENTbutton.Hereyoucanseethatinadditiontotheinformationweenteredwhenwecreatedtheorder(ordertype,salesorganization,distributionchannel,division,salesoffice,salesgroup,customer,andproduct)thesystemhasselectedadditionalcharacteristics,includingbillingtype,businessarea,companycode,materialgroup,plant,andprofitcenter,usingaprocessknownasderivation.Tosimulatethisstep,whenyou’recreatinganorder,clickontheDERIVATIONbuttonshowninFigure31tochecktheassignments.TheprogramlogicforperformingsuchaderivationissetupinCustomizingwiththegoalofderivingadditionaldataabouttheproduct,suchasthematerialgroup,thedivision,ortheproducthierarchyfromthefieldsinthematerialmaster,andadditionaldataaboutthecustomer,suchasthebillingtypefromthecustomermaster.

Whenyou’vesavedthesalesorder,displaythelineiteminCO-PAbyfollowingthemenupathCONTROLLING•PROFITABILITYANALYSIS•INFORMATIONSYSTEM•DISPLAY

LINEITEMLIST•ACTUALorusingTransactionKE24.LineitemsderivedfromthesalesorderarerecordedasrecordtypeA(salesorderentry).Figure32showsthecharacteristicsforthesalesorder.Hereyoucanseemanymorecharacteristicsthanwesawinthepreviousscreen,includingthecustomergroup,country,region,andsoon.

Figure32CO-PALineItemforSalesOrderItem—Characteristics

Figure33showsthevaluefieldsforthesalesorderitem.Inthiscase,revenue(8,25Euros)andcostofgoodsmanufactured(5,94Euros)havebeentransferredtoProfitabilityAnalysistoprovideaninitialcontributionmarginfortheorder.It’salsocommonforthepriceconditionstobetransferredinmoredetail;thisisamatterforconfiguration.

Figure33CO-PALineItemforSalesOrder—ValueFields

1.3.2DeliveringtheSalesOrder(DeliveryStep)

We’llnowrecordthedeliveryofthefinishedproducttothecustomer.IntheSALES

ORDERmenu,selectSUBSEQUENTFUNCTIONS•OUTBOUNDDELIVERYandenteryoursalesordernumber.ThenenterthequantitytobedeliveredasthepickingquantityandpostthegoodsissueasshowninFigure34.Notethat,dependingonyourconfiguration,youmightneedtocreateastocktransferorderaspartofthisstep.

Figure34DeliverywithGoodsIssue

Figure35showsthegoodsmovementintheMaterialPriceAnalysisreportfollowingthedelivery.Herewecanseethegoodsissueoffiveunitstothecustomeraccount.Whatisshownhereisnotthecustomernumberwesawinthe

profitabilitysegmentbutthereconciliationaccountforthecustomer(enteredinthecustomermaster)thatrecordsthegoodsmovementintheGeneralLedger.

Figure35MaterialPriceAnalysisforGoodsIssuetoSales

Figure36showstheaccountingdocumentsagain,withapostingtotheGeneralLedgerandacontrollingdocument.Noticethatthere’snoPROFITABILITYANALYSIS

document.Thedeliveryisrecordedinthefinancialaccountsasthegoodsmovementisposted.Ifwewereusingaccount-basedProfitabilityAnalysis,thenthedeliverywouldresultinacostofgoodssoldpostinginCO-PA.Incosting-basedCO-PA,however,therevenueisrecordedwhentheinvoiceisposted.Ifthereisalongtimelagbetweendeliveryandinvoicing,thenitisimportanttodeferthegoodsissuepostingsintheGeneralLedgertoensurethatthecostofgoodssoldpostingsinCO-PAmatchthevaluesintheGeneralLedger.ThecostofsalesisdeterminedusingconditiontypeVPRSandreadingthepricefromthegoodsreceiptonthedateofthegoodsreceipt.However,ifthedeliverytakesplaceinoneperiodandtheinvoiceinthenext,thevaluesintheP&Lstatementwon’treconcilewiththevaluesincosting-basedCO-PA.Inthiscase,you’llwanttousethereportslistedunderACCOUNTING•CONTROLLING•PROFITABILITYANALYSIS•TOOLS•ANALYZEVALUEFLOWStofindsuchdifferences.

Figure36AccountingDocumentsforDelivery

1.3.3BillingtheCustomer(BillingStep)

Finally,thecustomerisinvoicedforreceiptofthegoods,againtriggeringapostingtoProfitabilityAnalysis,thistimeasarecordoftypeF.Totriggertheinvoice,selectSUBSEQUENTFUNCTIONS•BILLINGDOCUMENTintheSALESORDERmenuandenterthedeliverydocumentnumber.Figure37showsthecustomerinvoicedocumentforthedemoCD.

Figure37BillingDocument

Again,wecandisplaythelineiteminProfitabilityAnalysisusingTransactionKE24andselectingrecordtypeFforbilling.Figure38showsthecharacteristicsfortheinvoicingdocument.

Figure38CO-PALineItemforBilling—Characteristics

Toshowthevaluefields,selecttheVALUEFIELDStab,asshowninFigure39.Therevenue(150Mexicanpesos)andthecostofgoodssold(108Mexicanpesos)arethesameaswesawforthesalesorderdocument.Thistime,however,weseethatthesystemhasbeenconfiguredtocapturethecostcomponentsinmoredetail.Thestandardcostsarebrokendownintotheircostcomponents,sowecanseerawmaterialcosts,laborcosts(fixedandvariable),machinecosts(fixedandvariable),andoverheadfromthecostestimate.

Figure39CO-PALineItemforBilling—ValueFields

Theprocesswouldnormallycontinuewiththeopenitembeingmonitoredinaccountsreceivableandtheninareceiptofpaymentorcollectionactivities.Atperiodclose,thecyclewouldbeclosedbysettlingtheproductionvariancestoPROFITABILITYANALYSISandrunningallocationstotransfercostcenterexpensestoProfitabilityAnalysis.Becausewe’vebeencollectingalltherelevantdataintheMaterialLedger,itisalsopossibletocalculatetheperiodicunitpriceforeachoftherawmaterialsandincludethevariancesintherawmaterialsinventoryatperiodclose.Wecanthenrollthevariancesuptothefinishedgoodsinventoryandfinallytothecostofsalestoprovideacompletepictureofthecostimpactofthewholeprocess.We’llalsobeabletousetherevaluationfunctiontopulltheactualcostcomponentsplitforthematerialintoCO-PA.

Inthepreviousexample,weusedbackflushingtorecordthegoodsissues,goodsreceipt,andconfirmationfortheproductionorderinasinglestep.We’llnowlookathowtocorrectanydataconcernsfollowingbackflushingbyusingthedistributionofusagevariancesfunction.

2DistributionofUsageVariances

OneoftheconcernswhenorganizationsconsiderusingbackflushingisthetacitassumptionthatthestandardvaluesfromtheBOMandtheroutingwereaccurateandthusafairbasisforcostaccounting.Controllersinstinctivelybelieveit’sbettertoconfirmoperationsmanuallytohavefullcontroloftheprocess.Anybodyinvolvedinleanmanufacturingwilladviseyouthatit’sbettertoinvesttimeandeffortinhigh-qualityBOMsandroutingsupfrontratherthantryingtoensureaccuracyastheordersareprocessed.Let’salsonotforgetthatplentyofchemicalprocessesrefusetosubmittooperation-basedconfirmations.

Whateveryourviews,sometimeswheninventorycountsareperformedforthegoodsinstock,thephysicalinventory(PI)revealsthatthematerialmovementsrecordedinthesystemdon’ttallywiththenumberofgoodsinstock.Controllersworkingwithactualcostsdefinitelywanttotakeaccountoftheinventorydifferencesandincludetheminthematerialvaluation,andevencontrollersworkingwithstandardcostswanttobeawareofthevariances.

TherewasatimewhenplantsstoppedworktoperformaPI,butnowregularcyclecountsaretheorderofthedayforreasonsofefficiency,andPIcanbeperformeddaily,weekly,ormonthly.Moreimportantlyforcontrollers,youcandistributetheinventorydifferencesrecordedusingafunctioncalleddistributionofusagevariances,whichyou’llfindintheMATERIALLEDGERmenu,althoughitdoesnotrequireuseoftheMaterialLedger.Ifyoucan’tfindtherelevantentriesinyourmenu,checkwithyourITdepartmenttoseewhethertheEnterpriseExtension

isactivated.

2.1CapturingPhysicalInventoryDocuments

AphysicalinventoryrequireswhoeverperformsthechecktocreateaPIdocumenttoactastheheaderforallactivitiesassociatedwiththecountfortheauditors.TocreateaPIdocument,useTransactionMI01orfollowthemenupathLOGISTICS•MATERIALSMANAGEMENT•PHYSICALINVENTORY•PHYSICALINVENTORY•DOCUMENT•CREATE.Enterthedocumentdate,plant,andstoragelocationandthematerialsyouintendtoincludeinthecount,whichtakesplaceperstoragelocation.Forcontrollingpurposes,it’simportanttoensurethatallrelevantmaterialsinthePIdocumentsareflaggedasrelevantforthedistributionofPIdifferences(DDfield).Figure40showsaPIdocumentforacountofmaterialACT-LCD(oneoftherawmaterialsweusedinthepreviousexample).

Figure40PhysicalInventoryDocument

Thenextstepistoenterthedifferenceintheinventorycountsforthematerialinquestion.ThisextendsthePIdocumenttorecordexactlyhowmuchmaterialismissingorinexcess.Todothis,gotoTransactionMI04orLOGISTICS•MATERIALS

MANAGEMENT•PHYSICALINVENTORY•INVENTORYCOUNT•ENTER.EnterthenumberofthePIdocumentfromthepreviousstepandthentheinventorycountforeachofthematerialsinthePIdocument.Notethatthisdocumentdoesnotimpactthefinancialaccounts.Again,makesurethatwhoeverrecordstheinventorycountsetstheDDflagformaterialACT-LCD,asshowninFigure41.

Figure41RecordingInventoryDifferences

Finally,toposttheinventorydifferencestoFI,gotoTransactionMI07orLOGISTICS•MATERIALSMANAGEMENT•PHYSICALINVENTORY•DIFFERENCES•POST,asshowninFigure42.ThispostingadjuststhestocklevelandpoststhecostsassociatedwiththemissingmaterialstotheP&LfromPIdifferencesaccount.ItalsomakestheinventorycountavailableforCOsoyoucanassignthevalueofthematerials

recordedinthecounttotheproductionordersthatconsumedthemissingrawmaterials.Wewillbeassigningthecostsfor36missingpiecestotheproductionordersthatusedmaterialACT-LCDsincethelastinventorycount.

Figure42PostingInventoryDifferences

2.2DistributionofUsageVariances

OncethePIdifferenceshavebeencapturedforthestoragelocation,thecontrollerdistributesthemtotheproductionordersthatusedthatmaterialintheperiod.Todothis,useTransactionCKMATDUVorfollowthemenupathACCOUNTING•CONTROLLING•PRODUCTCOSTCONTROLLING•ACTUALCOSTING/MATERIALLEDGER•ACTUALCOSTING•DISTRIBUTIONOFUSAGEVARIANCES•DISTRIBUTIONOFINVENTORYDIFFERENCES.Toperformthedistribution,proceedasfollows:

1. EntereithertherangeofPIdocuments(ifyouknowthem)orthematerialsforwhichyouwanttoselectdifferences,asshowninFigure43.YoucanseealistofthePIdocumentsselected(onlyoneinourexample),thequantity(36pieces),andthestatusNEW.

Figure43SelectionofPIDocumentforDistribution

2. NowclickontheDISTRIBUTEbutton,locatedinthebuttonbarabovetheselecteddocument(s).

3. ThisresultsinthestatusNEWshowninFigure43changingtothestatusDISTRIBUTIONCOMPLETED,asshowninFigure44.Tounderstandhowthesystemdistributedthatvaluetotheordersthatusedthecomponentinthatperiod,clickonthelinecontainingthePIdocumentandthenclickontheDETAILSbutton.Thequantitiesofmaterialissuedtotheorderswere20,10,and10(shownintheWITHDRAWNQUANTITYcolumn),andthesystemproposalforthedistributionofthe36unitsis18,9,and9(shownintheDEFAULTQUANTITYcolumn).Ingeneral,youacceptthesystem’sproposalandclickonPOST.However,ifyouknowthatoneorderhascausedparticularlyhighvariancesyoucancorrecttheproposalbyoverwritingthefigureproposedandenteringadifferentfigureintheQUANTITYcolumn.

Figure44DistributionofInventoryDifferences

2.3DistributionofActivities

Ifyouwanttocorrectthemachineorlabortimefromtherouting,youcanusethesamemechanismtoassigndifferencestotheproductionorders.Thismightbethecaseifyou’repostingstandardtimetoyourordersbuthavefoundthatthemachineranformorehoursthanthesumofthestandardvaluessuggests.Thisinformationmightcomefromworkers’timesheets,machinehourcounters,orelectricityconsumptionmeters.Torecordtheinitialdifferences,useTransactionCKMDUVRECorfollowthemenupathACCOUNTING•CONTROLLING•PRODUCTCOST

CONTROLLING•ACTUALCOSTING/MATERIALLEDGER•ACTUALCOSTING•DISTRIBUTIONOFUSAGEVARIANCES•ENTERACTUALACTIVITYQUANTITIES.EntervaluesforcostcenterCC530-00andactivitytypesATL-00andATR-00,asshowninFigure45.NotethatthesystemonlysavesthedataifyouselecttheITEMOKcheckboxonthefarleft.

Figure45CorrectingActivityQuantities

Toassignthetimestotheproductionordersusingthatactivity,gotoTransactionCKMDUVACTorACCOUNTING•CONTROLLING•PRODUCTCOSTCONTROLLING•ACTUAL

COSTING/MATERIALLEDGER•ACTUALCOSTING•DISTRIBUTIONOFUSAGEVARIANCES•DISTRIBUTIONOFACTIVITYDIFFERENCES.Enterthecostcenterandtherelevantactivitytypes.Figure46showstheactualactivityquantitiesbeingdistributedinsteadofthequantitiesfromthePIdocumentswesawinthepreviousexample.Theproportionsarethesamebecausethesplitontherelevantorderswasidentical.

IfweworkedasmanufacturersofdemoCDs,wecouldnowmoveontotheperiodclose,havingcapturedallrelevantdata.Now,though,we’lllookatsomeoftheprocessvariantsyoumightfindforeachofthecostobjectcontrollingapproaches.

Figure46DistributionofActivityDifferences

3IntegratedProcessFlows:OtherLogisticsScenarios

Inthissection,we’lllookatproductcostbyorder,productcostbyperiod,productcostbysalesorder,andprojectcontrollingtotakeusalittledeeperthanthesimpledemoCDexample.

3.1ProductCostbyOrder

Thedifferencebetweenusingproductionorders(aswedescribedinChapter1)andprocessordersisminimal,andyou’llbeabletofollowtheflowquitesuccessfully.Theprocesslooksslightlydifferentifyouhaveco-products.

InChapter1,weassumedthateverythingwentperfectly;wedidn’tinitiatereworkorsplitanorderbecausenothingwentwrong.Asacontroller,it’simportanttounderstandwhatcanhappeninLogisticsandwhateffectthemeasurestakenwillhaveonthedatayouanalyze.Also,notallmanufacturingtakesplacein-housethesedays,soit’simportanttounderstandhowtheoutsourcedmanufacturingprocesshasbeenenhancedfromacontrollingpointofview.

3.1.1ProcessOrderswithJointProduction

Ifmultipleproductsaremanufacturedinasingleproductionprocess,thenthecoststhatareassignedtotheworkorderhavetobesplittotheorderitemsusingsettlementatperiodclose.IfyouusetheMaterialLedger,thesamesplitisusedwhendistributinganyvariancestotheco-products.

Inthisexample,we’lluseaprocessorderinsteadofaproductionorder.Tocreateaprocessorder,gotoTransactionCOR1orLOGISTICS•PRODUCTION–PROCESS•PROCESSORDER•PROCESSORDER•CREATE.EntermaterialZ-300,theplant,theordertype,andthequantityfortheleadingproduct.ThemateriallistselectedforZ-300includesco-productPA-300.Todisplaythemateriallist,clickontheMATERIALSbutton.Figure47showsthemateriallistforZ-300,whichincludestheinputmaterialsandtheoutputmaterials.Boththeleadingproductandtheotherco-productareflaggedasco-products.Noticethesmallamountsofcatalystandcontaminatedwaterbeingrecoveredfromtheprocess.

Figure47MaterialListShowingCo-Products

Thestructureoftheprocessorderincludesaheadertowhichallcostsarepostedandorderitemsforeachco-product.Todisplaythecostsplitinthesettlement

rule,selectHEADER•SETTLEMENTRULE.Figure48showsthesettlementrulefortheprocessorderwithtwosettlementreceivers,item0001(materialZ-300)anditem0002(materialPA-300).Theapportionmentstructureinthematerialmasterspecifiesthatwhensplittingthecoststotheorderitems,thedifferentcostelementsaretreateddifferently.ThevaluesintheEQUIVALENCENUMBERScolumnhavebeenderivedfromtheapportionmentstructureandcanbeadjustedmanuallyintheorder.

Figure49showsthecostreportfortheprocessorder.YoucandisplaythisbyselectingGOTO•COSTS•ANALYSISintheorder.Thisshowstwoplannedgoodsreceipts:oneforZ-300andoneforPA-300.Italsoincludesnegativecostsforthecontaminatedwaterandthepartofthecatalystthatcanberecoveredfromtheprocess,becausethesearebyproducts.

Figure48SettlementRuleforJointProduction

Figure49OrderReportforJointProduction

Whensettinguptheperiodcloseforjointproduction,bearinmindthatordersettlementisatwo-stageprocess.Theordercostsarefirstsplitintotheorderitemsandthensettledtostockfortherelevantco-product.You’llfindthisextraclosestepbyfollowingthemenupathACCOUNTING•CONTROLLING•PRODUCTCOST

CONTROLLING•COSTOBJECTCONTROLLING•PRODUCTCOSTBYORDER•PERIODEND

CLOSING•SINGLEFUNCTIONS•PRELIMINARYSETTLEMENTFORCO-PRODUCTS/REWORK•SINGLEPROCESSINGorusingTransactionCO8B.

3.1.2OrderReworkandOrderSplit

Whenlookingatproductionorders,we’veemphasizedtheimportanceoftheorderlotsizeasthebasisforvarianceanalysis.However,thingsdon’talwaysgocompletelytoplan,andduringmanufacturingitsometimesbecomesclearthattheordercannotbecompletedintheformintended.Sometimesit’simpossibletosavetheorder,andtheentirequantityhastobescrapped.Inthiscase,allcostsareconsideredscrapwhenvariancesarecalculated.

Twoothersituationsarepotentiallyinterestingtothecontroller:

Theorderhastobereworked.Inthiscase,theordercanbesavedandthefinalproductdelivered,butadditionaleffortintheformofreworkisrequiredtoresolvetheissues.Thiscantaketheformofadditionaloperationsthatareaddedtotheoriginalorderwhenreworkisconfirmedorthecreationofacompleteneworder.Inthefirstcase,thecostsfortheadditionaloperationsarerecordedontheproductionorderasvariances.Inthesecondcase,thesettlementruleinthereworkorderassignsthecoststotheoriginalproductionorder.Whenpreparingtosettleyourproductionorders,youshouldensurethatreworkordersaresettledbeforethemainproductionorderissettledtostock.Again,aswesawforco-products,useTransactionCO8B.

Theorderhastobesplit.Theabilitytosplitproductionandprocessorderswasintroducedwiththebusinessfunctionenhancementsforsplittingofproductionorders( )inEHP4forSAPERP6.0.Severalbusinesssituationscanmakeanordersplitnecessary:

Thecustomerchangeshisrequirements,andtheproductionorderhastobeadjustedtoreflectthis.

Partofthequantitymanufacturedisfaultyandhastobereworkedorusedtomanufactureadifferentproduct.

Theprioritiesoftheproductionplanarechanged,andproductionordershavetobepostponed.

Thenecessarymachinesortoolsaredefective.

Theordersplitmeansthatachildorderiscreatedeitherforthenewmaterials(ifthecustomerchangeshisorderortheproductspecificationschange)orfortheoriginalmaterial(ifthedatesorproductionresourceschangesignificantly).Itcanalsomeanthatthepartofthesemifinishedproductcompletedtodateisdeliveredtostock.Forthecontroller,whatmattersishowtheplannedcostsareapportionedbetweentheparentandchildorders.Thisisbasedontheproportionofthequantitiesuptotheoperationatwhichthesplittookplace,soameaningfulcomparisonofplannedandactualcostsisstillpossible.

3.1.3OutsourcedManufacturing

Alongsideproductionordersandprocessorders,you’llalsofindthatthePRODUCT

COSTBYORDERmenureferencessomethingcalledaCOproductionorder.Thisisamorelikeaninternalorderthanaproductionorderinthatit’screatedinCOtocapturemanufacturingcosts(goodsissues,goodsreceipts,andsoon)whenproductionplanningisnotimplementedinSAPERP.AlthoughtheoriginalCOproductionorderdatesbacktotheearlydaysofSAPR/3,ithascomebackintofocusasameansofcollectingcostsinexternalmanufacturingscenarioswiththeintroductionofbusinessfunction (OutsourcedManufacturinginSAPERPOperations)inEHP4forSAPERP6.0.

Outsourcedmanufacturinginvolvesthesubcontractingofthemanufacturingworktoanexternalsupplier,whotakesdeliveryofthematerialcomponents,performsthenecessarywork,andthenshipsthefinishedproductbacktotherequestingorganizationandbillsforhisservices.ThepurchaseorderthatrequeststhesubcontractingworkcreatesaCOproductionorderautomatically.Figure50showsastandardpurchaseorderforoutsourcedmanufacturing.IfyoucompareitwiththepurchaseorderwecreatedfortherawmaterialsatthestartoftheE-Bite,you’llnoticethattheACCOUNTASSIGNMENTtabassignsthesubcontractingcoststoanorder:ordernumber7000282,inourexample.

Figure50PurchaseOrderforOutsourcedManufacturing

Youcannotcreateconfirmationsfortheseorders(becausetheassumptionisthattheworkisbeingperformedbyasubcontractor),butyoucanapplyoverheadandcalculateworkinprocess(WIP),meaningthatthecostsassociatedwiththeseorderscanbeincludedinthefinancialstatementsearlier.It’salsopossibletotransferstatusinformationfromtheexternalsuppliertotheseorders.Figure51showstheCOproductionorderassociatedwiththispurchaseorder.TodisplaytheCOproductionorder,useTransactionKKF3orfollowthepathACCOUNTING•CONTROLLING•PRODUCTCOSTCONTROLLING•COSTOBJECTCONTROLLING•PRODUCT

COSTBYORDER•MASTERDATA•COPRODUCTIONORDER•DISPLAYandselecttheordernumber.Tosearchforoutsourcedmanufacturingordersinyourownsystem,use(F4)ontheorderfieldandchoosethematchcodeCOPRODUCTIONORDERS

CREATEDFROMOM.NoticethattheCOproductionorderhasallthefieldsthatyouwouldassociatewitharegularinternalorder(table ),butalsohasadditionalcharacteristicsforreportingthathavebeentransferredfromthepurchaseorderthatinitiatedoutsourcedmanufacturing.

Figure51ProductionOrderforOutsourcedManufacturing

3.2ProductCostbyPeriod

Creatingaproductcostcollectortocollectcostsbyperiodratherthanontheindividualproductionordersisawayofmovingawayfromthestrongworkorderfocusoftraditionalaccountingsystemsandtowardaleanaccountingapproach,inwhichthefocusisonthedirectcostsincurredforthevaluestreamintheperiod.

Beforemanufacturingbegins,youmustensurethatyoucreateproductcostcollectorsforallrelevantmaterialsandproductionversions.YoucanthencreatetheproductionordersasdescribedinChapter1butusinganordertypethatsupportsworkingwithproductcostcollectors(ordertypePP08inthestandardconfiguration).Forthepeopleworkingontheshopfloor,theproductionorderlookscompletelynormal,allowingscheduling,materialreservations,andsoon.Thedifferenceisthattheorderhasnosettlementrule,andthecostingfunctionsandcostreportsareinactive.You’llrecognizetheseproductionordersbythestatusPCC(PRODUCTCOSTCOLLECTOR)intheheader.

Todisplayalistofallassociatedproductionordersandtherelevantproductionversion,clickontheORDERS/PVbutton,asshowninFigure52.Youcanusethislisttonavigatetotheindividualproductionordersifyouneedtocheckthedetailsofwhatquantitieswererecordedontheorder.

Whenyoucreatethemasterdataforaproductcostcollector,you’reaskedifyouwanttocreateacostestimateforeachproductionversion.Youdon’thavetocreateacostestimate,becauseyoucanusethestandardcostestimatetodeterminethetargetcostsforeachoperationtocalculatetheWIPandthescrap.However,ifyourproductionversionincludesaBOMorroutingwithadifferentstructurethanthatusedtosetthestandardcosts,itmakessensetocreateanewcostestimatefortheproductcostcollectorusingtheBOMandroutinginyourproductionversionasastartingpoint.Figure53showsthecostestimateformaterialTB400.YoucanaccessitbyclickingontheCOSTESTIMATEbuttoninFigure52.

Figure52ProductionOrdersAssociatedwithProductCostCollector

Figure53CostEstimateforaProductCostCollector

Astheproductionordersmovethroughtheproductionprocessandincurcosts,youcandisplaythesecostsbyclickingontheCOSTSbuttoninFigure52.ThiswilltakeyoutothereportshowninFigure54.Goodsissues,goodsreceipts,orderconfirmations,andsoonaretreatedexactlythesamewayasforanormalproductionorder.Thedifferenceisthatinsteadofbeingrecordedwithreferencetotheproductionorderthey’rerecordedbymaterialandproductionversion.Inanygivenperiod,you’llhaveamixtureofcompletedoperations(finishedgoodsinventory),incompleteoperations(WIP),andscrap(recordedattheoperation).Anyvariancesaresettledtostock,andtheproductcostcollectorappearsintheMaterialLedgerundertheprocurementalternativeshownunderthePRODUCTION

PROCESStab.

Figure54ProductCostCollectorwithAssociatedCosts

Anevenleanerapproachdispenseswiththeproductionordersaltogetherandusesrunscheduleheaders.Toconfirmrunscheduleheaders,useTransactionMFBForLOGISTICS•PRODUCTION•REPETITIVEMANUFACTURING•DATAENTRYREPETITIVE

MANUFACTURINGCONFIRMATION,asshowninFigure55.Toidentifytheproductcost

collector,entertherelevantmaterial,plant,andproductionversion,andenterthequantitytobeconfirmed.

Figure55ConfirmationinRepetitiveManufacturing

3.3ProductCostbySalesOrder

InChapter1,allsalescontrollingactivitiestookplaceinProfitabilityAnalysis,andthedeliveryforthesalesorderinvolvedpickinggoodsfromneutralstocktoshiptothecustomer.It’salsopossibletoconfigureyoursalesorderprocesstoinitiateaproductionprocesstomanufacturethegoodstoorder(maketoorder).

Themostcommonreasontoinitiatemake-to-orderproductionisthattheproductrequestedisconfigurableandthecustomerhasmadecertainselectionsthatwillaffectthepartsneededinmanufacturingandsometimestheoperationstobeperformed.Youhavetwooptionsinamake-to-orderscenario:

Theproductionorderistriggeredfromthesalesorderanddeliversitscompletedproducttosalesorderstock,fromwhereitwillbeshippedtothecustomer.Iftherearenocustomer-specificcostsforthedelivery,there’snoneedtoconfigurethesalesorderitemasanaccountassignmentandsetuprevenuecostelementsfortherevenues.ThemaindifferencecomparedtowhatwesawinChapter1isthattheproductionordersettlesitscoststosalesorderstock.ReportingandvarianceanalysiscanstilltakeplacebyproductionorderasinChapter1.However,thesalesorderstockisvalued,meaningthesystemisconfiguredtopickapriceforthesalesorderstockusingasalesordercostestimate,theproductionordercostestimate,oroccasionallythestandardcostestimate(ifoneexists)ratherthanthestandardpriceweusedtovaluethereceipttostockinChapter1.

Thesalesorderinitiatesmake-to-orderproduction,andproductioncostsarecollectedontheproductionorder.However,thecostofperformingcustomer-specificconfigurationorspecialdeliverycostsneedstobechargedtothesalesorder.Inthiscase,thesalesorderitemneedstobeconfiguredasanaccountassignment,andsalesrevenueiscapturedasacostelement.You’llalsohavetoperformresultsanalysisatperiodclose.

Let’slookattheprocessflowforthefirstoption.Toillustratethisprocess,we’llcreateasalesorderforconfigurablematerialDPC1.Theproceduretocreateasalesorderisthesameasbefore,exceptthatweenteredaconfigurablematerialastheproduct.Assoonasyoucreatethesalesitem,thesystemdirectsyoutotheCONFIGURATIONscreen.Figure56showstheselectionscreenforthecharacteristicsthatrepresentthedifferentconfigurationoptions.Thesearethesameastheconfigurationsettingsinthematerialmaster.

Figure56ConfigurationSettingsforProductDPC1

Thesalesmanagermaintainstheseincollaborationwiththecustomer,ortheycanbetransferredfromanexternalapplication,suchasaweborderentryscreen.

Thesalesorderitemforthismaterialhasaspecialrequirementstype(seeFigure57)thatcontrolsthefactthattheproductionorderwillbecreatedwithreferencetothesalesorderssothatthecustomers’requirementscanbetakenintoaccountduringproduction.Tochecktherequirementstypeforasalesorder,selectthePROCUREMENTtabintheorderoverview.Thisrequirementstypealsodeterminesthatthegoodswillbedeliveredtoandissuedfromsalesorderstock—inotherwords,theinventorythatbelongstothesalesorderratherthanthegeneralfinishedgoodsinventory.Thisraisestheissueofhowthesalesorderitemwillbevalued,becausenostandardcostestimateexistsforthecustomer-specificconfiguration.Again,thisiscustomizable.Usually,eitheracostestimateiscreatedforthesalesorderortheproductionordercostestimateisusedtoprovideaninitialvaluation.TherequirementstypealsodetermineswhetherthesalesorderitemexistsasanaccountassignmentinCOornot.Inbothcases,thecostsforthesalesorderitemflowintoProfitabilityAnalysis.

Figure57RequirementsTypeofSalesOrder

TheMRPrunlinkstheproductionorderwiththesalesorderitemthattriggeredtheorder,oryoucanmanuallycreateaproductionorderwithreferencetoasalesorderitem.Whenwedisplayaproductionorderformaketoorderusing

TransactionCO03,weseealinktothesalesorderitemandtheorderingpartyintheGENERALtabfortheproductionorder(seeFigure58).

Thesettlementrulefortheproductionordersettlestosalesorderstock(inventorythatcanonlybedeliveredtothecustomernamedinthesalesorder)ratherthanneutralmaterialstock(whichcouldbeissuedtoanysalesorder).Todisplaythesettlementrule,selectHEADER•SETTLEMENTRULE.Figure59showsthesettlementrulewiththereceiversmaterialandsalesorderitem.YoumayrememberthattheproductionorderwesettledinChapter1onlyincludedthematerialasareceiver.Youcansetupadifferentvaluationclassinthematerialmastertoassigngoodsmovementstosalesorderstocktoadifferentsetofaccountsfromnormalgoodsmovements.

Figure58ProductionOrderforMaketoOrder

Figure59SettlementRuleforProductionOrder(MTO)

Ifwereturntothesalesorderitem,wecanchecktheassignmentofthesalesorderitemtoProfitabilityAnalysisasbefore.NoticeinFigure60thatthematerial

isstillDPC1.Thismeansthatsalescontrollingwillbebasedontheconfigurablematerial(encompassingallpossiblevariants)ratherthantheindividualconfigurationworkedoutincollaborationwiththefinalcustomer.

Figure60ProfitabilitySegmentforMaketoOrder

3.4ProjectControlling

Projectcontrollingissimilartoordercontrolling,withseveralnotableexceptions:

WhereasweprocuredtheblankCDsandlabelsforproductionofourCDswithnoreferencetoacostcenter,order,orproject,goodsorservicesprocuredspecificallyfortheprojectincludetheWBSelementasanaccountassignmentinthepurchaseorderitem.ThecostsareexpensedtotheWBSelementimmediatelyratherthanwhenthegoodsareissuedfromrawmaterialsinventorytotheproject/order.

Inadditiontomonitoringexpensesonprojects,it’salsocommontomonitorfutureexpensesthatareknown,becausepurchaseordershavebeencreatedtobuymaterialsorservicesfortheproject.Suchknownfutureexpensesarecalledcommitments.

Projectsthatdon’thavenetworksornetworkactivitiesassociatedwiththemhavenolinktotheconfirmationstepwesawfortheproductionorder.Instead,thecostofdoingworkfortheprojectcaneitherbeassignedtotheprojectinCObyusingdirectactivityallocation(TransactionKB21N)orbyusingthecross-applicationtimesheet(TransactionCATS).IfyouusetheCross-ApplicationTimeSheet,theworktimeisrecordedbytheemployeesinhumanresources,butthevalueofthatworkisnottransferredimmediately.Instead,separatetransactionsareusedtoinitiatethetransfertoCO.

Let’sdigintoeachofthesealittledeeper.

3.4.1Project-SpecificPurchasing

Goodsandservicesthatarepurchasedspecificallyforaprojectarehandledusingapurchaseorderaswesawbefore,buttheaccountassignment(columnA)inthepurchaseorderitemorACCASSCATfieldintheACCOUNTASSIGNMENTtabisP(project).ThismeansyouhavetomakeanassignmenttotheWBSelementthatwillcarrythecostsofthepurchase.Figure61showsapurchaseordertobuymaterialsforaproject(WBSelementT-20301).Inthisexample,thesystemhasbeenconfiguredsothattheavailabilitycheckissuesthemessagethatthebudgethasbeenexceededandspendingisblockedfortheWBSelement.TheprojectmanagernowhastorequestadditionalbudgetortransferbudgetfromanotherWBSelementbeforehecancompletehispurchase.

ScopeofAvailabilityChecks

It’sonlypossibletoactivateavailabilitychecksforprojectsandinternalorders.We’reoftenaskedwhethersuchafunctionisalsoavailableforcostcenters,butthisisnotpossibleatthetimeofwriting.SAPNote68366describesaworkaroundusingstatisticalorderstorepresenteachcostcenter.

Theavailabilitycheckisahardcheckagainsttheexistingbudgetpriortomakinganyexpenseorcommitmentpostingtotheproject.Thebudgetandspendingtodateisshowninseveralreportstoenablemanagerstomonitorwheretheystandpriortomakingapurchase.

Figure61PurchaseOrderforProjectwithAvailabilityCheck

3.4.2CommitmentManagement

Let’sassumethatinourpreviousexamplethemanagernowsucceedsinrequestingmorebudgetandplacinghispurchaseorder.Acommitmentiscreatedforthevalueofthepurchaseorder.Figure62showsthecommitmentfortheopenpurchaseorder.Aseachgoodsreceiptisrecorded,thecommitmentisreduceduntilthefinalgoodsreceiptiscompleted.

Toaccessthisreport,followACCOUNTING•PROJECTSYSTEM•INFORMATIONSYSTEM•FINANCIALS•COSTS•PLAN-BASED•BYCOSTELEMENT•ACTUAL/COMMITMENT/TOTAL/PLANINCOAREACURRENCYandentertheprojectnumber.Notethattherearevariouswaysofdisplayingthecommitmentsforinvestmentprograms,projects,andorders.Reportswiththetitle“commitments”areparticularlyimportantiftherearelongleadtimesbetweenplacingtheorder(openingthecommitment)andreceivingtheorder(cancellingthecommitment).

Figure62CommitmentsforProject-RelatedPurchases

3.4.3TimeRecording

InChapter2,welookedattheactivityallocationtriggeredbytheorderconfirmationforourproductionorder.Thesameprocesscanbeinitiatedinhumanresourcestopostworkingtimetoaproject.Thesendingcostcenterinthiscaseisthecostcenterintheemployee’sorganizationalunit.Theactivitytypesaredefinedasforproductioncostcenters,andanactivityrateiscalculatedthesamewayasforproductionactivities.Thisactivityrateisusedtovaluetheworkingtimeenteredbytheemployeeforhisworkonaparticularproject.Sincethereisoftennorealrelationshipbetweentheamountoftimeworkedandtheorganizationalresourcesemployed,itisalsocommontoenteranactivityratemanuallytocoverthedifferentchargesforajuniororseniorconsultant.

Topostworkingtimetoaproject,gotoTransactionCAT2orHUMANRESOURCES•TIMEMANAGEMENT•TIMESHEET•CATSCLASSIC•RECORDWORKINGTIMEandselecttherelevantdataentryprofileandapersonnelnumber.Thedataentryprofilesareconfiguredtodeterminewhataccountassignmentstheemployeeisallowedtorecordtimeagainst.Thenentertheworkingtimes,asshowninFigure63.Thetimesheetincludestheemployee’scostcenterandtheactivitytypewagehoursasthesenderoftheallocationandtheWBSelementasthereceiveroftheallocation.

Figure63TimeRecording

TheattendancetypeinHRis0800(attendancehours).Fromacontrollingpointofview,therelevantfieldsarethesendercostcenterandactivitytype,thereceiverWBSelement,andthehoursentered.

ThemaindifferencebetweenaconfirmationinLogisticsandtimerecordinginhumanresourcesisthattheactivityallocationdoesnottakeplaceimmediately.Instead,atransferhastobescheduledtotransfertheworkingtimerecordedfrom

humanresourcestoCOevenwhenhumanresourcesandfinanceareonthesameSAPERPinstance.Tomakethetransfer,useTransactionCAT5orfollowthemenupathHUMANRESOURCES•TIMEMANAGEMENT•TIMESHEET•TRANSFER•PROJECTSYSTEM•TRANSFERandenterthepersonnelnumberofthepersonwhoseworkeffortyouwanttotransfer.Similartransactionsexistfortransferstocostcentersandplantmaintenanceorcustomerserviceorders.Figure64showsthetransferlog,withanitemforeachtimerecordtransferred.

Figure65showsthelineitemsfortheactivityallocationoncethedatatransferiscomplete.YoucandisplaytheprojectlineitembyusingTransactionCJ13orfollowingthemenupathACCOUNTING•PROJECTSYSTEM•INFORMATIONSYSTEM•FINANCIALS•LINEITEMS•ACTUALCOSTS/REVENUESandenteringtherelevantproject,WBSnumber,costelement,andtimeframe.Noticeagainthatwe’veadaptedtheALVLayouttoshowthebusinessTransactionRKL,exactlythesameoneaswesawfortheorderconfirmationsinproduction.Justaswesawfortheproductionactivities,youcanalsoseethisworktimeonthecostcenterbyusingTransactionKSB1(seeChapter1)toviewthelineitemsonthecostcenter.

Figure64TransferWorkTimestoControlling

Figure65LineItemsforDirectActivityAllocationviaTimeSheet

Ifyoudon’tuseTimeRecordinginCATS,youcanpostanactivityallocationtoaWBSelementdirectlybygoingtoTransactionKB21NorACCOUNTING•CONTROLLING

•COSTCENTERACCOUNTING•ACTUALPOSTINGS•ACTIVITYALLOCATION•ENTER.ToentertheWBSelementasareceiver,selectthescreenvariantWBSELEMENT/NETWORK.Thenenterthecostcenterforwhichtheemployeeworksandtheactivitytypeasthesender,theWBSelementasthereceiver,andtheappropriatequantities,asshowninFigure66.

Figure66DirectActivityAllocationtoWBSElement

PriorYearRatesforProjects

AdevelopmentforthepublicsectorinEHP4forSAPERP6.0maybeofinteresttocontrollers.Becausefederalagenciesallowtimesheetcorrectionsinthe13monthsprecedingthedocumentdate,therewasaneedtovaluethechangedworkingtimenotwiththeactivitypricevalidonthekeydateforthechangebutwhentheworkwasoriginallyperformed.Follow-upfunctions,suchasoverheadcalculation,shouldalsobebasedonthevaluesusedfortimerecording.Althoughmostindustriesdon’tallowsuchalongperiodforcorrectionstotimerecordings,youmightbeinterestedtoknowthatit’spossibletocalculateoverheadinrealtimewhenthetimesheettransferfromHRtakesplaceortheactivityallocationinCOisposted.Youcanactivatethisprocessusingthebusinessfunction .

3.5ControllingforMaintenanceandServiceOrders

Maintenanceandserviceordersuseexactlythesamemechanismstocapturetheircostsasproductionorders.Themaindifferencesarethatthetasklistsdescribemaintenanceorservicestepsratherthanmanufacturingstepsandthattheordersarecreatedwithreferencetoafunctionallocationinsteadoftoamaterialnumber.

Althoughmaintenanceordersdon’tgenerallyattractasmuchattentionasproductionorders,largelybecausetheircostsdon’timpactthebalancesheet,theregulatoryauthoritieshaverecentlystartedtoputthemunderincreasedscrutiny.Oneoptiontoconsiderinthiscontextiswhethertousethebusinessfunction

(OperationAccountAssignment)introducedinEHP5forSAPERP6.0.Theclassicmaintenanceorder,liketheproductionorder,capturescostsviatheconfirmationsatoperationlevelbutstoresthecostsatheaderlevel.Forthesortofmaintenanceordersthatarecompletedinanafternoon,thiscanbeperfectlyadequate.Formaintenanceandserviceordersthataremorecomplexandhavehugelydifferentoperations,considerstoringthecostsatoperationlevelinstead.Youcanactivatetheoperationasanaccountassignmentbysettingaflagintheordertype.We’vedonethisforordertypePOLC.

Youcanidentifyorderswithoperation-levelcostingbythestatusACAS(activityaccountassignment)intheorderheader.Inthiscontext,youmightwonderwherethetermactivitycomesfrom.Thesamecodingisusedtoassignmaintenancecoststooperationsasisusedtoassignmanufacturingcoststonetworkactivities,leadingtoconfusion.Althoughthenewfunctionwillallowyoutoshowcostsbyoperation,youdon’thavetochangeeitheryourreportingorperiod-endcloseprocesses.Youcancontinuetoexecuteallyourreportsandperiod-closestepsbyorder,butthesystemwillautomaticallyselectcostsforalltheoperationsthatareassignedtotheorderanddisplayorprocessthecostsforthemultipleoperations.

Tocreateamaintenanceorder,chooseLOGISTICS•PLANTMAINTENANCE•MAINTENANCEPROCESSING•ORDER•CREATE(GENERAL)orTransactionIW31andentertheordertypeandwhatistobemaintained(functionallocation,equipment).Toseetheoperations,selecttheOPERATIONStabandentertheworkcenter(whichwillalsoprovidethelinktothecostcenter),thedurationofthemaintenancestep,andtheactivitytypetobeusedtochargethecosts.Figure67showsasamplemaintenanceordertogetherwiththetwooperationsthatwe’llusetocapturecosts.NotethestatusACAS(activityaccountassignment)intheorderheader.

Figure67OperationsforaMaintenanceOrder

Clearly,capturingcostsbyoperationwillincreasethenumberofobjectstoprocessatperiodclose,becauseeachoperationbecomesaminiorderwithintheparentorder,butitwillallowyoutolookattheactualcostsforeachoperationinturn.Onceyouhavereleasedthemaintenanceorder,youcanconfirmtheworktimesbyusingTransactionIW41orLOGISTICS•PLANTMAINTENANCE•MAINTENANCE

PROCESSING•COMPLETIONCONFIRMATION•INDIVIDUALTIMECONFIRMATIONandenteringthenumberofhoursworkedineachoperation.

Figure68showsthecostsforthetwooperationsinthemaintenanceorder.Toreachthisreport,chooseEXTRAS•COSTREPORTS•OPERATIONCOSTOVERVIEWintheorderheaderorchooseTransactionIW40N(OperationCostOverview)directly.You’llnoticethatwe’vebeenabletocollectactualcostsatexactlythesamelevelasplannedcosts.Inmaintenance,asintheprojectsystem,costscanbedisplayednotonlybycostelementbutalsobyvaluecategory.Thisissimplyadifferentwayofstructuringthecostsandispartoftheconfigurationeffortofsettinguptheprojectsystemandmaintenanceorders.

Figure68MaintenanceOperationsandTheirCosts

Ofcourse,youcanalsoviewmaintenanceordersjustlikeinternalordersorproductionorders,butyouwillneedtoadjusttheALVlayoutstodisplaytheoperation.Figure69showsthelineitems(TransactionKOB1)forourmaintenanceorder,butwe’veextendedthedefaultALVlayouttoincludetheoperationfield.

Figure69LineItemsfortheOperationsonaMaintenanceOrder

We’velookedatactualpostingsinmanyofthelogisticsprocessesandinhumanresourcesandathowtomakedirectactivityallocationsinCO.Ifthesearewrongforanyreason,it’scommontocorrecttheworkingtimeinhumanresourcesortheconfirmationinlogistics,butyoushouldalsoknowhowtomakecorrectionpostingsinCOforwhenit’snotpossibleorpracticaltoreversetheoriginaldocument.Thiscanbethecaseintheheatoftheperiodclose.

4CorrectionsorAdjustmentPostings

Ourexamplesshowedcompleteflowsthattookplacewithoutahitch,butthecontrollerisoccasionallycalledupontomakeacorrection.Sometimesacompletereversalisrequired,whichactsasadocumented“undo”oftheoriginalposting,andsometimesapostingismadeusingthewrongaccountassignment(forexample,travelexpensesarechargedtothewrongcostcenterororder)orthecontrollermustmoveadirectactivityallocationfromoneaccountassignmenttoanother(forexample,workpostedtooneWBSelementmustbemovedtoadifferentWBSelement).

Figure70showstheACTUALPOSTINGSfolderforCostCenterAccounting,butthesameapplicationsareavailableintheINTERNALORDERS,PRODUCTCOSTBYORDER,PRODUCTCOSTBYPERIOD,SALESORDERCONTROLLING,andACTIVITY-BASEDCOSTING

folders.Hereyou’llseethetransactionsfortimerecordinganddirectactivityallocationthatwetalkedaboutintheprevioussection.We’llnowlookattheotheractualpostingtransactions.

Figure70ActualPostingsinCostCenterAccounting

4.1RepostingLineItems

Let’sassumethatoneoftheemployeesonacostcenterhasjustmovedtoanothercostcenter,buthistravelexpensesfromthepreviousperiodhavebeenpostedtotheoldcostcenter.Tomovethesecoststothecorrectcostcenter,weneedtorepostthelineitemthatrecordedtheoriginalexpensepostingbyusingTransactionKB61orfollowingthemenupathACCOUNTING•CONTROLLING•COST

CENTERACCOUNTING•ACTUALPOSTINGS•REPOSTLINEITEM•ENTER.

Inanidealworld,youknowthedocumentnumberunderwhichthetravelexpenseswerepostedandcanenteritintheselectionscreenshownonFigure71.Usually,however,thebiggestchallengeofrepostingalineitemisfindingthedocumentyouwanttorepostinthefirstplace.Ifyoudon’tenteradocumentnumberintheselectionscreen,thesystemwillselectalldocumentsthatmeetyourselectioncriteria(alltravelpostingstothesalescostcenterin2013,inourexample).Ifthiswillresultintoomanydocumentsbeingselectedforreposting,clickontheCHANGESELECTIONPARAMETERSbutton.

Figure71SelectionScreenforReposting

Figure72showsallselectionparametersforalineitemreposting.Toincludeadditionalparametersontheselectionscreen,double-clickonafieldontheleft,suchasPERSONNELNUMBER,toidentifytheemployeewhochangedcostcenter.Thisfieldthenappearsontherightasadynamicselectionparameter.Whenyousavethedynamicselection,thepersonnelnumberappearsasanadditionalselectionparametertohelpyoulocatethecorrectdocumenttoberepostedinFigure71.

Figure72SelectionParametersforLineItemReposting

Onceyouhavemadeyourselection,youhavetwooptions:

Figure73showsthelistview,whichisdesignedformassentryofmanyitemswhenmasscorrectionsareneeded(forexample,whentheorganizationisbeingrestructuredandallpostingsfortheperiodneedtobemovedtothenewcostcenter).Thelistviewrequiresyoutochoosetheobjecttype(OTYPEcolumn)fortheaccountassignmentusing(F4)helpandthentoenterthenewaccountassignment.

Figure74showstherowview,whichisdesignedforenteringdetailsforasingleitem(suchasouremployee’stravelexpenses).Therowviewoffersaseparatefieldforeachobjecttype.

Figure73Reposting—ListView

Figure74Reposting—RowView

YoucanswitchtotherowviewbyclickingontheROWbuttoninthelistviewandtothelistviewbyclickingontheLISTbuttonintherowview.

Inbothcases,youcaneasilyenterthecorrectcostcenteroranotheraccountassignment,suchasaWBSelement,forthedocument.YoucanidentifytherepostingdocumentsforauditingbyextendingtheALVlayoutforthelineitemreporttoincludebusinesstransactionRKU3.Figure75showsalineitemreportforthesalescostcenter,inwhichtheDecembertravelcostshavebeenrepostedtoanothercostcenter,andthefieldsBUSINESSTRANSACTION,PARTNEROBJECTTYPE,andPARTNEROBJECThavebeenaddedtothereportlayoutsothatyoucanseetowhichcostcenterthecostshavebeenreposted.

Figure75LineItemReportfollowingReposting

4.2CorrectinganActivityAllocation

IfanemployeehaspostedtimetothewrongorderorWBSelement,youcancorrectthelineitemforthedirectactivityallocationinmuchthesameway,byusingTransactionKB65orfollowingthemenupathACCOUNTING•CONTROLLING•COSTCENTERACCOUNTING•ACTUALPOSTINGS•ACTIVITYALLOCATIONREPOSTING•ENTER.Figure76showstheROWviewforthecorrection.Thedifferenceisthatthelineitemnowcontainsthesendercostcenterandactivitytyperatherthanthecostcenterandthetravelcostelement.You’lleffectivelybepostingtimeintheformofanactivitytyperatherthanexpensestothenewcostobject.

Figure76RepostActivityAllocation:RowView

4.3RepostingValues

Althoughthetwoprevioustransactionsinvolvedselectingtheoriginaldocumentasthebasisforthereposting,it’salsopossibletomovecostsfromoneaccountassignmenttoanother.Thisagaincanbeusedtohandleorganizationalchangesandmovingcostsfromonecostcentertoanother.Torepostfromonecostcentertoanother,useTransactionKB11NorfollowthemenupathACCOUNTING•CONTROLLING•COSTCENTERACCOUNTING•ACTUALPOSTINGS•MANUALREPOSTINGOFCOSTS•ENTER.Toaccesstherelevantaccountassignmentsinthistransaction,selecttheappropriatescreenvariant(aswedidforthedirectactivityallocation).Thenenterthedocumentdate,thecostelement,andtheamounttogetherwiththeoldcostcenterandthenewcostcenter(orwhicheveraccountassignmentyou’removingcostsfromandto),asshowninFigure77.

Figure77ManualCostReposting

Theactualpostingswe’velookedatsofarhaveallbeenwithinthesamecompanycode.We’llnowlookatwhathappenswhengoodsmovefromoneaffiliatedcompanytoanotherinthesamegroupandatyouroptionsforcostaccountinginsuchasituation.

5Cross-CompanyPostings

We’velookedatactualpostingswithinasinglecompany,butintoday’sglobalsupplychains,it’scommonforseveralplantstobeinvolvedinmanufacturingasingleproductandfortheseplantstobelongtodifferentlegalentities.It’salsocommonfororganizationstohaveacentraldistributioncenterthat’ssuppliedbymultipleplantsthatbelongtodifferentlegalentities.Inthiscase,ontopofhavinganinitialpurchaseoftherawmaterialfromanexternalsupplierandafinalsaleofthefinishedproducttotheendcustomer,therewillbeasaleandpurchaseofmaterialsbetweenaffiliatedcompaniesalongtheway.Oneofthefirstchallengeshereistomakesurebothaffiliatedcompaniesareusingthesamecodeforthematerialsthey’rebuyingfromandsellingtoeachother.Ifthiskindofharmonizedmasterdataisinplace,youactivatetwoseparatevalueflowsinCOtolookatthistypeofgoodsmovementfromtwoperspectives.Fromalegalperspective,thesaleandpurchaseofthematerialsaretreatedasiftheytookplacewithexternalcustomers/vendors,butfromagroupperspective,therehassimplybeenagoodsmovementfromoneplanttoanother.

Fromalogisticspointofview,themovementbetweentheaffiliatedcompaniesishandledusingastocktransferorder.Thisresultsinthecreationofacross-companydeliveryandagoodsissuefromthesupplyingplant.Thereareanumberofoptionsforthetransferofgoodsownership,asshowninFigure78:

Theremaybeaone-steptransfersuchthatthegoodsreceiptatthereceivingplantisrecordedimmediately.

Ifthereisasignificanttimelagbetweengoodsissueandgoodsreceipt,thematerialmaybepostedtostockintransit.

Dependingontheconfiguration,thestockintransitmayremainintheownershipofthesupplyingcompanyormoveimmediatelytotheownershipofthereceivingcompany.

Thestockintransitmaybetransferredenroute.

Figure78Cross-CompanyStockTransportOrder

Fromafinancialpointofview,therearetwopointstoconsider.Oneisthelegaltransferofgoodsfromonecompanytoanother.Thistakesplaceusingpricingconditionsjustasifthematerialswerepurchasedfromandsoldtoanonaffiliatedcompany(sometimescalledarm’slengthtrading).Theotherpointisthegroupcontrollingview,fromwhichtheintercompanymarkupscanbeeliminatedandtheflowtreatedasifitweretakingplacewithinthesamecompany.ThisdualflowisenabledintheMaterialLedgerfromEHP5forSAPERP6.0byactivatingthebusinessfunctionCross-CompanyCodeStockTransfer&ActualCosting( ).

We’llnowlookatanexampleofsuchagoodsflow.Plant2820(Shanghai)inChinahassuppliedmaterialACT-DCDtoplant2821(USplant).Let’slookfirstatthesituationinthesupplyingplant,2820(Shanghai),byusingTransactionCKM3NorfollowingthemenupathCONTROLLING•PRODUCTCOSTCONTROLLING•ACTUALCOSTING/MATERIALLEDGER•INFORMATIONSYSTEM•DETAILEDREPORTS•MATERIALPRICEANALYSIS.Figure79showsthelegalvaluation(companycodecurrency).Hereweseeafolder,PURCHASEORDER(GRP),whichshowsthreegoodsissuestotheUSplant.Makeanoteofthedocumentnumbersforthesethreelines;we’llneedthemlater.

Nowlet’slookatthestocksituationforthesamematerialinplant2821(USplant).Figure80showsthatthesamematerialshavebeenreceived.HereyouwillseethesamedocumentnumbersasinFigure79,butthistimetheyappearintheRECEIPTSfolder.

Figure79MaterialPriceAnalysisforLegalValuationinSupplyingPlant

Figure80MaterialPriceAnalysisinLegalValuationforReceivingPlant

Thestocktransferorderresultsinthematerialissueandthematerialreceiptbeingrecordedinthesamedocument.Wecanseethisbyclickingononeofthelines.Figure81showstheissuerecordedinChineseyuan(thelocalcurrencyforShanghai,thesupplyingplant)andthereceiptrecordedinUSdollars(thelocalcurrencyinthereceivingplant).

Ifyoureturntothepreviousscreens,noticeanadditionallineateachplant,CONSUMPTIONFORNEXTLEVELonthesupplyingplantinFigure79andRECEIPTFROMLOWERLEVELSonthereceivingplantinFigure80.ThisisapostingcreatedbytheMaterialLedgerduringtheperiodiccostingrun.Thecostingrunpassestheactualcostsfromthesupplyingplanttothereceivingplant.ForFigure79andFigure80,thevaluepassediszero,becausewe’relookingatthelegalvaluation,whichkeepsthetwocompaniesat“arm’slength.”Fromalegalperspective,theUSdoesnotreceivefollow-oncostsfromChina.

Figure81MaterialLedgerDocumentShowingBothPlants

However,acorporatecontrollerexpectstoseethisflowinitsentirety.Thiscanbedonebyswitchingtothegroupview.Usually,accesstothisviewisrestricted,andonlycorporatecontrollerswithappropriateauthorizationcanseetheactualcoststhathavebeenpassedbetweenthecompaniesduringthecostingrun.

Figure82showsthesamematerialsingroupvaluation.BoththeUSplantandtheChineseplantbelongtoaEuropeangroup,sothegroupcurrencyisEuros.Inourexample,therearenovariancesinthepurchaselinetobepassedon,butifwe

hadincurredpurchasevariances,wewouldseethesepricedifferencesintheCONSUMPTIONFORNEXTLEVELline.

Figure82MaterialPriceAnalysisinGroupValuationinSupplyingPlant

Figure83showsthemirrorimageofthispostinginthelineRECEIPTSFROMLOWER

LEVELS,wherewewouldseeanydifferencesbeingassignedtothereceivingplant.

Figure83MaterialPriceAnalysisinGroupValuationinReceivingPlant

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TheDocumentArchive

TheDocumentArchivecontainsallfigures,tables,andfootnotes,ifany,foryourconvenience.

Figure1Procure-to-PayProcess

Figure2CreatingaPurchaseOrder(PurchaseOrderProcessingStep)

Figure3CreatingaGoodsReceipt(GoodsReceiptStep)

Figure4MaterialPriceAnalysisfollowingGoodsReceipt

Figure5MaterialLedgerDocumentandLinkstoAccountingDocuments

Figure6AccountingDocumentforGoodsReceipt

Figure7EnteringanIncomingInvoice(InvoiceProcessingStep)

Figure8MaterialPriceAnalysisfollowingInvoicing

Figure9MaterialLedgerDocumentandLinkstoAccountingDocuments

Figure10VendorInvoiceintheGeneralLedger

Figure11ProfitabilitySegmentforRawMaterial

Figure12ValueFieldsShowingPriceDifferencesforRawMaterials

Figure13Make-to-StockManufacturing

Figure14CreatingaProductionOrder

Figure15MaterialComponentsinaProductionOrder

Figure16OperationinaProductionOrder

Figure17PlannedCostsfortheProductionOrder

Figure18GoodsMovementsAssociatedwiththeConfirmation

Figure19MaterialPriceAnalysisfollowingGoodsIssue

Figure20AccountingDocumentsforGoodsIssuesandReceipts

Figure21ControllingDocumentforGoodsIssuesandReceipts

Figure22ConfirmingaProductionOrder

Figure23ValuatedQuantityStructureforaFinishedProduct

Figure24ActualCostsforaProductionOrder

Figure25LineItemsforActivityPosting

Figure26MaterialPriceAnalysisfollowingGoodsReceiptforFinishedProduct

Figure27DocumentsforGoodsReceipt

Figure28DetailsofValuesIncludedinSettlement

Figure29AccountingDocumentsforSettlement

Figure30Order-to-CashProcess

Figure31SalesOrderItemandAssociatedProfitabilitySegment

Figure32CO-PALineItemforSalesOrderItem—Characteristics

Figure33CO-PALineItemforSalesOrder—ValueFields

Figure34DeliverywithGoodsIssue

Figure35MaterialPriceAnalysisforGoodsIssuetoSales

Figure36AccountingDocumentsforDelivery

Figure37BillingDocument

Figure38CO-PALineItemforBilling—Characteristics

Figure39CO-PALineItemforBilling—ValueFields

Figure40PhysicalInventoryDocument

Figure41RecordingInventoryDifferences

Figure42PostingInventoryDifferences

Figure43SelectionofPIDocumentforDistribution

Figure44DistributionofInventoryDifferences

Figure45CorrectingActivityQuantities

Figure46DistributionofActivityDifferences

Figure47MaterialListShowingCo-Products

Figure48SettlementRuleforJointProduction

Figure49OrderReportforJointProduction

Figure50PurchaseOrderforOutsourcedManufacturing

Figure51ProductionOrderforOutsourcedManufacturing

Figure52ProductionOrdersAssociatedwithProductCostCollector

Figure53CostEstimateforaProductCostCollector

Figure54ProductCostCollectorwithAssociatedCosts

Figure55ConfirmationinRepetitiveManufacturing

Figure56ConfigurationSettingsforProductDPC1

Figure57RequirementsTypeofSalesOrder

Figure58ProductionOrderforMaketoOrder

Figure59SettlementRuleforProductionOrder(MTO)

Figure60ProfitabilitySegmentforMaketoOrder

Figure61PurchaseOrderforProjectwithAvailabilityCheck

Figure62CommitmentsforProject-RelatedPurchases

Figure63TimeRecording

Figure64TransferWorkTimestoControlling

Figure65LineItemsforDirectActivityAllocationviaTimeSheet

Figure66DirectActivityAllocationtoWBSElement

Figure67OperationsforaMaintenanceOrder

Figure68MaintenanceOperationsandTheirCosts

Figure69LineItemsfortheOperationsonaMaintenanceOrder

Figure70ActualPostingsinCostCenterAccounting

Figure71SelectionScreenforReposting

Figure72SelectionParametersforLineItemReposting

Figure73Reposting—ListView

Figure74Reposting—RowView

Figure75LineItemReportfollowingReposting

Figure76RepostActivityAllocation:RowView

Figure77ManualCostReposting

Figure78Cross-CompanyStockTransportOrder

Figure79MaterialPriceAnalysisforLegalValuationinSupplyingPlant

Figure80MaterialPriceAnalysisinLegalValuationforReceivingPlant

Figure81MaterialLedgerDocumentShowingBothPlants

Figure82MaterialPriceAnalysisinGroupValuationinSupplyingPlant

Figure83MaterialPriceAnalysisinGroupValuationinReceivingPlant

Footnotes