global cost accounting 6.1- fplc global design presentation: global finished product logistics cost...

Global Cost Accounting

6.1- FPLC Global Design Presentation:

Global Finished Product Logistics Cost (FPLC) Design


FPLC Design:

Provides standards for managing FPLC across all businesses around the globe.

Uses SAP CO-PA module to simplify & standardize FPLC accounting & analysis needs (Reporting).

Addresses needs of different regions for handling the different components of FPLC costs differently, if needed.


Definition (from SAFE):

Cost incurred from the entry of finished, wrapped pallets or unit loads to the warehousing and distribution chain, until delivery of cases to the customer's receiving dock. (Non– Inventoriable Cost)

Global Cost AccountingBasic Components of FPLC:

Warehousing Costs:Warehousing Costs include receiving, handling, storage and management of finished product at producing plant warehouses, including product produced at other plants.

Inter-Site Freight:Transportation cost to ship finished product from the producing plant to a different ship point or between ship points (e.g., between distribution centers).

Customer Freight:Freight to move finished product to the customer from plants, warehouses, RDCs, or custom packers.


FPLC Data Flow: Warehouse Cost

Warehouse Cost

-Handling /Storage Expense at CC-Allocation to TDCVAL CC-Post Recoveries to CC / offset to P&L at Category Level-Calculate Variances (CC).-Move Variances from TDCVAL PC to Category (release)

New Scenario for Handling & Storage

COPAProvidesWHS Recoveries basedon actual shipment volume fromSD times Mix-Adjusted Standard

GCF to ECCS / S1-SC S1-SC /Customer Rev/BP&L


FPLC Data Flow: Transportation Cost

Transportation Cost

-Transportation at CC-Allocation to TDCVAL CC-Post Recoveries to CC / offset to P&L at Category Level-Calculate Variances (CC).-Move Variances from TDCVAL PC to Category (release)

COPAProvides Transportation Recov.

Based on actual shipment volumeFrom SD times Mix Adjusted Std



General Logistics Cost:

Miscellaneous costs incurred in conjunction with the process of warehousing and distributing. These costs should be charged out based on a "peg rate" (standard rate multiplied by shipment volume) set at the beginning of the fiscal year. The peg rate may then be updated quarterly to reflect changes in cost expectations (if approved by the GBU Regional Category Finance Manager and the Regional A&FRS Cost Manager.)


FPLC Data Flow: General Logistics Cost

General Logistics Cost

-General Logistics Cost at CC-Allocation to TDCVAL CC-Post Recoveries to CC / offset to P&L at Category Level-Calculate Variances (CC).-Move Variances to BS at Cat. Level

COPAProvides GLC Recoveries basedon actual shipment volume fromSD times Mix-Adjusted Standard



Master Data - No Inventoriable Standards:

• In parallel to the effort going on to calculate inventoriable standard costs, the non-inventoriable standards have to be calculated and uploaded into SAP.

• The GBUs are responsible for calculating and passing the standard FPLC Rates to SAP-COPA. They will need to work closely with their CSL Organization to determine the right logistics related costs.

• Importantly, these non- inventoriable standard costs must be calculated outside SAP and uploaded into SAP-COPA as part of the ‘fiscal year standard setting process’:

• The standard GMC & FPLC rates are loaded into COPA as Condition Types.


GBU (Cost Forecasters/Analysts) own the following:

Submitting these standards to the COPA Accountant in the ‘Condition Type Rate Upload Tool’ (ZKXXP018) Upload Tool format.

Validate that the material as setup in SAP-COPA is accurate to the GBU’s forecast.

GBS (Cost Accountants / COPA Accountants) own the following: Cost Accountant owns coordinating the Firm Forecast and Standard

Setting Processes, including meetings between GBU & GBS. They also own working with the GBU’s to make sure they understand the non- inventorable forecasting process, due dates, and getting the rates from the GBUs and to the COPA Accountants.

COPA Accountants owns uploading the rates into COPA, then validating that COPA reconciles to the upload spreadsheet provided by the Cost Accountant. They also will monitor the volume postings weekly in COPA to ensure there are no missing rates. If a revaluation is required within COPA due to missing rates, they will perform this process.


GBS (Cost Accountants / COPA Accountants) own the following:

The Standard GMC Rate and the Standard FPLC Rates should be calculated and input into COPA on an annual basis. Corporate policy should govern when Mid-year adjustments to the standards are needed.

Access Sequences should be standardized across the GBUs. This standardization will help keep master data issue to a minimum while significantly improving data accuracy.

The GBUs and CSL Organizations own the Integrity and Accuracy of the GMC and the FPLC Rates.

Module Integration

CO => Inventoriable Cost

Estimates Calculated=> Recipe & Resources

Setup

MM => Bill of Materials &

Material Masters Setup

CO Inventoriable Cost

Estimates StoredMark & Release

COPA => Mix-Adjusted

Inventoriable & Non-Inventoriable Standard

Costs

Finished Product Cost

Estimates

Bill of MaterialMaterial Masters

Inventoriable Cost

Estimate Components

Supply Chain Client CRM Client

Material Masters

Accounting & Cost Views

Only


COPA Introduction:

CO-PA Access real time data from transactional Systems enabling bottom up aggregation on multi-dimensions.

-Forecast Update-NOS and Volume Data

CO-PA Supports the Legal Entity Books closing (e.g calculating journal entries).

CO-PA provides a Financial Data Strategy in two areas:

1.Financial Profitability Analysis

Brand P&L ActualsCOPA is the source of Revenue & TDC Mix-Adjusted at Brand Level.Provides feedback to management on GCF Legal Entity books for Actuals Profit Proofing.Enables Management reporting of the Legal Entity Books for profitability analysis by key dimension (brand, geography) versus the business plan.

Profit Forecast SystemCOPA is the source of Revenue and TMC and FPLC/GMC mix adjusted costs at Finished Product Code.Data is provided to the forecast system to incorporate into the monthly Brand Profit Estimates




1.Financial Profitability Analysis

Customer Revenue:COPA module is designed to capture customer information and measures associated to all shipments and financial customer adjustments (providing customer information is entered), across the product hierarchy. This enables S1 customer revenue reports to be sourced from COPA.

Official Shipments:COPA module is the official source of daily shipment reporting figures to Source 1 for countries integrated with SD Module.



2. Cost Accounting:

CO-PA module delivers in conjunction with CO-PC (product costing) TMC and FPLC Standard Solution. (full picture of TDC Std Setting)Enables the reconciliation of Standards of the products that the business Imports/Exports or sells. (Cost Estimates SC vs. CRM)Provides Mix-Adjusted Std for GMC (Shipment based)

FPLC Standard accounting:

- Set up Standard Rates (high level to lower product hierarchy level)

- Provides Mix-Adjusted standards automatically upon shipment.- Allows rates set up at Brand Code, TDCVAL, transportation type

rather than one overall peg rate for the site.



2. Cost Accounting

FPLC Standard Accounting:

- Provides means to a more budget based FPLC plan, meaning more accurate ICBP.- Drives the business units to develop better annual business

plans.

Plant/Cost Accounting:

- Enables Month-End Processes (e.g. COPS Reclassification, ICBP Calculation, etc).- Enables Scorecard reporting for TMC & FPLC by site.- Operational reports for standard TMC / FPLC analysis and month-end processes are available from the COPA module.


COPA – Introduction:

COPA’s specific importance to standard building is that all ‘non-inventoriable’ standards (or ‘rates’) need to be calculated outside SAP and uploaded into COPA, where they will be stored.

Non-inventoriable standards are ONLY stored in COPA.

These standards remain ‘frozen’ within COPA and used, as previously explained, to valuate product costs upon actual shipment of a finished product to a customer.

Non-inventoriable standards can be changed during the year if they meet the same threshold criteria as inventoriable standards.

Global Cost AccountingCharacteristics:

Characteristic Values are the criteria or multi-dimensional attributes within COPA that enable operating results analysis as well as the creation of Firm Forecast/Plan data. Some characteristics are hierarchical, and can be derived from one another (example: brand and category can be derived from product code).

Characteristic can be ‘product based’ or ‘shipment based’, as outlined below:

Product-Based Characteristics: These are product based attributes that relate to the product being shipped.

• An example is the ‘product hierarchy’ which enables aggregation of product-based attributes like sales, shipment, or cost data according to a variety of reporting requirements and therefore of reporting levels.


Characteristics:

Shipment – Based Characteristics: These are attributes related to how or where the product is shipped.

• An example is the ‘customer account assignment group (CAAG)’ which is a code within COPA that is derived from the ‘sold-to-party’. This is used to differentiate between affiliate and trade shipments. (IC, Ex/ SR (RE-SR), 01 (Trade).

Characteristic values are important to standard setting in that this value represents the product hierarchy level where the non-inventoriable rates are set.

• An example is where all non-inventoriable rates are set at TDC VAL Product Hierarchy level, meaning that all shipped finished products within that TDC VAL will be charged the same rate upon shipment.


COPA – Introduction:

COPA captures information on a real time basis from the billing documents (from shipment system whether SD, COSMOS, or OSB) and aggregates this data on higher levels based on a pre-defined criteria (as in the product hierarchy).

For example, all the transactions in SD take place at a SKU level. COPA aggregates this data to a higher level such as TDC VAL, Category, Sub-Sector, Sector, etc.

Said another way, when an SD billing document is posted, the ‘non-inventoriable’ standards are combined with the ‘inventoriable’ standard rates within CO-PA, then multiplied by the shipment volume to “valuate” the TDC costs for that specific shipment.


Characteristic Derivations:

Characteristic derivation functionality makes it possible for the system to automatically derive unknown characteristic values if these are dependent on characteristics whose values are known. This means that even though a business may set their non-inventoriable standards at TDC VAL level, COPA will automatically ‘derive’ down to finished product code level upon shipment.

Derivation rules are valid for a specific timeframe. This parameter makes it possible for the system to handle future business changes like a reorganization and/or master data changes like profit center or product groups, etc. COPA will read these changes effective from the date specified in master data with no implications on historical data.


Condition or Condition Types:

A Condition Type represents one step in a Costing Sheet, and essentially represents a rate that is calculated by the Cost Analyst and then uploaded by the COPA Administrator into COPA at standard setting time.

COPA uses conditions and access sequences to calculate anticipated values called value fields (value fields are used for reporting purposes).

• For example, cost components non- inventoriable standards like GMC, FPLC & PS ADMIN, which are not included within the Material Cost Estimates, need to be defined within COPA using conditions so that we get a total picture of TDC for the volumes shipped.


The standard GMC & FPLC rates are loaded into COPA as Condition Types.

Condition Types: Condition types are simply a rate per stat unit value that COPA will read during the valuation process. They can be maintained against many different characteristics and combination of characteristics.

Once the condition types have been successfully uploaded into SAP-COPA, the rates will be used to valuate volume postings upon shipment from the businesses Billing System.


Condition Types are important to the standard setting process because all non- inventoriable standards are uploaded into SAP COPA using condition types as the ‘cost component’ (or standard rate), at stat case value.

For example:• Condition Type Cost Component • ZCFR Customer Freight• ZIFR Interstice Freight• ZWHS Warehousing Cost• ZGLC General Logistics Costs• ZGMC General Manufacturing Costs

Reference the Global Cost Team space for more detailed information concerning Condition Types, including a full list of possible options together with detailed descriptions of each.


Value Fields hold the total value of a non-inventoriable standard (example is customer freight) for a specific product hierarchy level, based on COPA ‘mix-adjusted’ functionality.

Condition Types are loaded into COPA as standard rates, with each ‘type’ being mapped to its own ‘value field’ via internal COPA mapping tables.

COPA ‘mix-adjusted’ functionality calculates product hierarchy level standards through interaction of shipment volumes from the billing system with Condition Types (rates).

Reference the Global Cost Team space for more detailed information concerning Value Fields, including a full list of possible options together with detailed descriptions of each.

Currency Value FieldsName Description Cost Cpt

VVT01 Raw Materials 010, 011, 012VVT02 Pack Materials 020, 021, 022VVT03 Intermediates 030, 031, 032VVT04 Trade 040VVT05 Making 050VVT06 Packing 060VVT07 Quality 070VVT08 Contractor Cost 080VVT09 Local Market Conversion 090VVT10 MSA Charge 100VVT11 Import GMC 110VVT12 Import FPLC 120VVT13 Import PSAdmin 130VVT14 Mark-Up 140VVT15 Miscellaneous 150



The GMC & FPLC Rates will need to be Computed at a specific level in the Hierarchical Structure. The levels available in COPA are defined by the Access Sequences.

The Access Sequences define the level the rates will be maintained at. They are the characteristics that the condition types are loaded against.

Examples of ‘access sequences’ that the GBUs can select from are outlined below.


GMC

GLC

Warehouse Costs

Ccode x Plant x Brand Element

Ccode x Plant x Brand Element

Ccode x Plant x TDC Val



Ccode x Plant x TDC Val x Cust AAGr

Ccode x Plant x TDC Val x Cust AAGr

Ccode x Plant x TD C Val x Cust AAGr

Ccode x Brand Element


Ccode x TDC Val

Ccode x TDC Val

Ccode x TDC Val

Ccode x Category

Ccode x Category

Ccode x Category

Ccode x Plant x Category

Ccode x Plant x Category

Ccode x Plant x Sector

Ccode x Ctry x TDC Val

Ccode x Planning Unit

Ccode x Sector

Intersite Freight

Customer Freight

Ccode x Plant x Brand Element Ccode x Brand Element


Ccode x TDC Val


Ccode x Ctry x TDC Val

Ccode x TDC Val

Ccode x Planning UnitCcode x Plant x

Category

Ccode x Sector

Ccode x Plant x Sector

Ccode x Cust AA

Ccode x Planning Unit

Ccode x Ctry x Plant x Tzonegrp x Brand Element

Ccode x Sector

Ccode x Ctry x Plant x Tzonegrp x TDC Val

Ccode x Plant x Planning Unit Ccode x Ctry x Plant x Tzonegrp x Category

Ccode x Ctry x CAAG x Category

Ccode x Ctry x SSKU

Ccode x Cust AAG x Category

Ccode x Ctry x Brand Element

Ccode x Ctry x Sector

Access Sequence Examples:


Access Sequence Selection Guidelines:

Use an Existing Access Sequence as defined above.

The same Access Sequence selection should be employed per Rate across each of the GBUs.

• WANT STANDARDIZATION where possible.

The access sequence selected will offer certain benefits, based on the level selected:

• Lower-level rates provide enhanced accuracy.• Higher-level rates provide less on-going maintenance

and reduced chance of missing a rates.

Business case:• In standard SAP, all SD bookings (ex. revenue and COPS bookings) are done to the profit center derived from the material master.• For P&G purposes, need to post shipments into P&L profit centers, per category / country sold to.• Material master profit centers however are at the level of TDC VAL / ship-from DC.

SD-COPA solution:• Special SD user exit during order entry substitutes the SAP material master profit center in the order with the corresponding P&L profit center.• Derivation is maintained in table ZVXXPCSUBS. • In COPA, P&L profit center is then mapped to a P&G profit center on GBU/Region level.

Profit Center Substitution


System Work Process Organization (F&A/IT)

SourceOne Automated Brand P/L Reporting BIS/BISBIS/BISCustomer NOS/CR Reporting BIS/BISBIS/BISForecast Update - Actuals BIS/BISBIS/BISFPLC Scorecard Reporting BIS/BISBIS/BIS

CO-PA COPA Financials Data BIS BIS && A&FRA&FR//ITBSITBS

CO Cost Accounting (FPLC,Affiliate) A&FRA&FR//ITBSITBS

FI General Accounting A&FR/A&FRA&FR/A&FRRealization AccountingMSA Accounting

SD/OSB/COSMOS Shipping,Billing (Invoices/Credits) CL&FS/CL&FS/ITBSITBSOther (ex:Siebel) Customer Payments CL&FS/CL&FS/ITBSITBS

SA

P T

rans

acti

onal

Int

egra

tion

Man

agem

ent

Rep

ortin

g

CO-PA Financials

GBS X-Bundle Initiative : End-to-End


COPA Delivers Low Level Mgmt ReportingTo S1 (Brand, LE, Country, Customer,Profit Ctr)

Legal EntityBooks Data Flow

SourceOne

GCF EC-CSEC-CS

Brand P&L

CO

-PA

Fin

anci

als

Financial Forecast Actuals

Supply ChainFPLC S’card

CustomerAnalysis

CO-PAVolumeOutside Sales, Sales Deductions,TDC St’nds

TransactionalSystem Data Flow

ECCS Delivers High Level MgmtReporting to S1 (Category Level)

Source One Brand P/L always ties to the official company books (ECCS).

The sum of the brand detail COPA data needs to equal the

Legal Entity Books Category data.

Accounting & CO-PA Data Flow

Global Cost AccountingFinance & Accounting Systems Vision

Using SAP Design – Deliver Financial Information Via Two Paths:

Global Core Financials (G/L) - High Level Information

• Delivers Accounting by Legal Entity and Profit Center • High Level Management Reporting (Category Level)

CO-PA (Controlling-Profitability Analysis) – Lower Level and Segment Information

• Source of Realization, Sales Deductions and • TMC/FPLC Mix Adjusted Standards by Key Dimension

– Brand– Country (Geography)– Customer – Legal Entity– Profit Center

• Used to Close the Legal Entity Accounting Books – Cost Accounting & Other

• Integrated with SAP Transactional Modules (Sales Distribution/OSB/COSMOS,– CO-Cost Accounting, FI-General Ledger, Sales, MSA)

Global Cost AccountingBusiness/Management Reporting

Integrated/Automated Brand P/L (+ 7 w/day)Actuals for Financial Forecast Update (+2 & +7 w/day)Week One “NOS” (+2 w/day)CO-PA Financials (+2 & + 7 w/day : TBD)

CO-PA Financials Cube by RegionSales Realization/Net Trade Sales (WE)

Customer Analysis (+7 w/day)Customer Revenue (LA)Customer NOS/MDA (Future)

Mix Adjusted FPLC for Scorecard Reporting (+ 7 w/day)

Cost Accounting SolutionFPLC/GMC Standard Cost AccountingICBP Generation (Western Europe)Affiliate Accounting and Mark-up ReversalCOPS Reclassification

OtherShipment Reporting (Replaced by MDO Release 5.5)Corporate Restructure Pricing Analysis


COPA Reconciliations:

Master Data reconciliation (COPA Adminstrator/Cost Accountant/G/L Acct)

• Material Master Data – Cost & Accounting Views (TDCVAL Profit Ctr)

• Material Cost Estimates Reconciliation• PCSUBS Table

Shipment Volume with Transactional Systems• SD/OSB/COSMOS Billing (G/L Revenue) To CO-PA Volume

comparison of totals by company code / FP code (COPA Acct/CLS.)

• Goods Issue (G/L COPS) to SD/OSB/COMOS Billing (G/L Revenue)at the transaction level (CSL/Cost

Accountant/CO-PA Acct)

FPLC Recoveries (FPLC Accountant/COPA Accountant)• CO-PA Calculation To Supply Chain-Cost Accounting (G/L

Journals)comparison by legal entity / cost component

(e.g. Warehouse)


COPA Reconciliations:

Mix Adjusted Total Delivered Cost (COPA Accountant/Cost Accountant)

• CO-PA Reconciliation To Supply Chain-Cost Accounting (G/L COPS)

comparison by legal entity / profit center of total TMC, total GMC,

total FPLC

FI CRM Box (COPA Accountant/G/L Accountant)• CO-PA ‘Realization’ Reporting To FI-Sales Accounting (G/L

Accounts)• comparison by legal entity / profit center at

the major account code level (Outside sales, Sales deductions…)

SAP CO-PA/SourceOne CO-PA Financials (COPA Accountant)

• System to System Reconciliation of Data Submitted vs Data Received

global cost accounting 6.1- fplc global design presentation: global finished product logistics cost...

Documents

cost expectations

inventoriable cost slide

regional afrs cost manager

fplc accounting analysis

cc allocation

cc offset

tdcval cc post recoveries

sc customer revbpl slide