Leveraging Master Data to Elevate Product Cost Controlling

SAP provides flexibility within Product Cost Planning that allows businesses to elevate how materials are costed with diverse functionality to fit business need.

However, a key to precise product costing is understanding and ensuring the accuracy of the Master Data that Product Cost Controlling relies on. In this session, we will take a more in-depth view of some of the key master data that is utilized across Production Cost Controlling and why ensuring the accuracy of this data elevates the reliability of the results and downstream functions.

In this live webcast with Tara Hushbeck, we will explore:

• A high-level introduction to Product Cost Controlling o Review key upstream integration points of Product Cost Controlling with other modules and processes

• An overview of the Master Data used most often by Product Cost Controlling for both Raw Material and Manufactured Materials

• Key insight into how Master Data is used by Product Cost Controlling with a focus on topics:

• Production Version Selection Changes in S4HANA o Mixed Costing

• Activity Types/Prices

Q&A

Q: We discussed how important master data is to Product Cost Controlling, what have you seen as the biggest challenge for companies when trying to maintain Master Data?

A: I have seen two major ones over the course of my career - the first is data integrity and multiple sources of the truth. If there are disconnected systems that are maintaining master data, BOMs for example and each is being used by a different group/being maintained separately, those double touches often lead to different sources of truth and misinformed decisions. The 2nd is having enough people on the team understand the complexities of the Master Data usage and design. Master data can be utilized by many different stakeholders so understanding how the master data is used is across the organization is key to ensure one group doesn't "break" functionality for another.

Q: In your experience, what is the most underutilized piece of Master Data when it comes to Production Cost Controlling?

A: I think it's hard to pick just one as I have seen companies that are underutilizing something as simple as the Special Procurement Costing key which resulted in significant increase in effort for a single cost run but I think overall, I see the calculation of Activity Prices using SAP, which requires some master data elements is heavily underutilized within SAP as a lot of companies just use Excel and upload prices in KP26. That really limits the Standard vs Actual comparisons that are possible.

Q: Part of the presentation focused on planning and how increasing the complexity of your plan can benefit PCC but the challenge we see is that getting our plan into SAP can be time consuming - are there ways to make the planning process more efficient?

A: Yes, there are non-standard programs that can be utilized to upload a financial plan/budget via Excel. Similarly, if your company is using Integrated Planning there are integrations that can be made from other modules to make the process more efficient and effective.

Q: Is PCC configuration different for planning strategies like for MTO & MTS etc.?

A: As mentioned during the presentation, there are many upstream impacts to PCC, including planning and planning strategy. Your PCC design is bound to be different depending on the type of planning strategies, the types of orders used, purchasing strategies, etc. which drives the requirement for different configuration and/or master data set-up. The PCC design will drive what is required from a set-up/configuration/master data.

Q: Regarding inventory valuation and the material ledger obligatory within S4 HANA, if a company is using standard costing for inventory valuation, is it needed to run CKMLCP with the option to reevaluate materials at month end? Or can we remove that option without any issue?

A: The requirement to move to SAP S4HANA is the activation of Material Ledger but it does not require the activation of Actual Costing within Material Ledger. The activation of Actual Costing is what requires the running of CKMLCP. That said, there are many benefits to Actual Costing and I would recommend at least considering activating it when moving to Material Ledger/S4HANA. In either case, Actual Costing doesn’t replace Standard Costing and you would still create a Standard Cost.

Q: We heard with UPA (Universal Parallel Accounting) there is no need for KP26? Is this correct? If that’s the case, how is the rate for respective activity type and Cost center being calculated in S4?

A: Correct. With UPA, KP26 has been replaced with the Fiori App – “Manage Cost Rates – Plan” (ID F3162) which allows you to maintain the rates for separate Ledgers

About the Presenter:

Tara Hushbeck is a business leader with 9+ years of SAP experience. Her time in different Fortune 100 organizations was spent transforming product costing and leading cross-functional teams through SAP design and implementation of enterprise data integrity strategies.

Boost Financial Consolidation with SAP Group Reporting: Tips and Strategies

SAP S/4HANA Group Reporting is the latest Financial Close and Consolidation software from SAP. The solution assists an organization with unifying and streamlining local and group consolidation closing activities. In addition, the solution supports an organization's finance department by collecting, processing and then presenting consolidated financial statements in accordance with GAAP requirement such as US GAAP or IFRS.

Attend this live webcast with SAP Finance/Group Reporting expert, Orpheus Birch, where he'll delve into the essential strategies to enhance your financial consolidation process and share practical tips, innovative tricks, and real-world examples to optimize your Group Reporting implementation. Discover how to leverage advanced features for improved accuracy, efficiency, and compliance, ensuring your organization remains agile and informed in today’s dynamic financial landscape, and learn the following:

· Basic Overview of Group Reporting consolidation. · Streamlining consolidation close process

· Group Reporting Preparation Ledger · Legal consolidation for multiple consolidation groups

· Options and key design decisions for implementing Group Reporting

· Lessons learned from previous implementations · Reporting options

SAP Cloud ALM for SAP Implementations

SAP Cloud ALM is a game-changer for managing and operating cloud-based and hybrid SAP system landscapes. This native cloud solution offers a central entry point for streamlined management and automated operations of SAP landscapes, focusing on swift SAP solution implementations.

In this session, you'll gain:

✨ An overview of SAP Cloud ALM features and processes

✨ Insights into creating and managing SAP Public Cloud implementation projects using SAP Activate roadmaps

✨ Guidance on selecting implementation scopes and defining business processes

✨ Skills to create and manage requirements

✨ Knowledge on defining system groups and deployment plans

✨ Strategies for test preparation, execution, and defect management

✨ Techniques for developing and deploying new features

Revolutionizing SAP® Processes with Automation and Artificial Intelligence - ERPfixers x Precisely

In today's business landscape, where data complexity reigns supreme, companies are increasingly turning to AI to enhance efficiency and drive better decision-making. However, navigating this terrain requires a solid understanding of data quality and process optimization.

Join our webinar to explore how automation of routine tasks can streamline operations, minimize errors, and pave the way for better data quality. We'll discuss the convergence of AI with automation solutions, highlighting its potential to drive efficiencies across SAP® operations.

Key Discussion Points:

• Understanding the pivotal role of high-quality data in supporting accurate AI recommendations within SAP® processes.

• Exploring the incorporation of various AI technologies into automation solutions and their potential impact on future business operations.

• Unveiling the critical importance of an automation platform in driving your organization's automation strategy.

Realizing tangible results from automation initiatives today and envisioning how AI can further enhance these processes. Addressing data privacy concerns and integration complexities in SAP®, necessitating strategic planning for successful AI projects.

Discover how automation and AI can elevate your SAP® processes, from routine tasks to strategic decision-making. Gain insights into the transformative power of these technologies and chart a course towards future success. Reserve your spot now to join the conversation!

Erpfixers.com

Currencies and Exchange Rates in SAP and S/4 HANA

Presented by Ashish Sampat

Dive into the heart of SAP currency management and revolutionize your understanding of currency maintenance in FI/CO!

Tune in and gain insights into:
✨ Important currency tables and exchange rates
✨ Transaction codes for seamless exchange rate maintenance
✨ Currency types across FI, CO, ML, and CO-PA
✨ Programs and modules for efficient exchange rate reading
✨ Foreign Currency Revaluation transactions and setup

Don't miss out on this invaluable opportunity to elevate your SAP expertise!

Q&A

1) If rate for a currency pair is available (e.g., EUR to USD), do we also need to maintain the rate for the opposite combination (USD to EUR)?

a. If you have configured the exchange rate type to allow for Inverse rates in OB07 (Exchange Rate Type configuration shown on slide 25), then no need to maintain the opposite combination.

b. One can still maintain the inverse rate, if maintained the opposite combination rate will be used. However, if the USD EUR rate is not maintained, then the inverse rate will automatically be picked up.

2) Apart from initial data load of opening balances, what others business scenarios can FBB1 be used for?

a. We can possibly use FBB1 for correction journal entries which involve group currency, and we want the group currency to have the same rate as the original document.

b. Here we can explicitly enter the amounts in document currency, local currency, and group currency, rather than deriving these amounts from the exchange rate table.

c. This is more relevant when correction is done across different dates, or different fiscal periods where the exchange rate has changed.

3) What are the features of an extension ledger? And how does it differ from a parallel ledger, especially from the point of view of currencies?

a. Extension ledger was introduced to enable postings to be made that do not affect the main ledger.

b. An extension ledger becomes the main vehicle for adjustments which should be reported for internal/tax reporting.

c. Extension ledger brings controlling or tax flavor to ACDOCA – so that CO-only adjustment entries can be made, without impacting the main ledger.

d. Extension ledger is an optional feature and can also be used for local legal reporting.

e. Till ECC, only parallel ledgers were supported, which post all entries of main ledger in the parallel ledger. This amounts to duplication of data.

f. S/4 supports both parallel ledger, as well as extension ledger. When it comes to currencies, parallel ledger has more flexibility, as compared to extension ledger.

4) Can you please cover the topic of functional currency introduced with 1909? Use cases, best practices etc.

a. SAP note 3200089 - Functional Currency in SAP S/4HANA gives a good overview on Functional Currency.

b. In most cases, the company code currency is used as the functional currency.

c. In a scenario where most transactions are conducted in a currency other than the country’s own currency (e.g., A Swiss company conducts business mainly in Euro, thereby adopting EUR as the functional currency, rather than CHF)

5) What is the difference in a 0:0 ratio and a 1:1 ratio that I've seen depending on how ratios were loaded?

a. OB08 will show accurate ratios since it reads data from TCURR as well as TCURF. However, TCURR standalone does not reflect the ratios from TCURF. It can be confusing to see a 0:0 ratio (or blank), when the expectation is to see 1:1.

b. Per SAP Note 3200089 - Functional Currency in SAP S/4HANA “Table TCURR stores the exchange rates that are absolute, not ratios. Table TCURF stores the conversion of currencies in ratios. So FFACT and TFACT are always non-zero in TCURF and are always zero in TCURR.”

c. Also review SAP Note 783877 - Currency translation: FAQ “The fields FFACT and TFACT for exchange rate factors are present in table TCURR, but they are of no importance. The factors displayed in Transaction OB08 (Maintenance view of V_TCURR for exchange rate entry) are always taken from table TCURF, and not from table TCURR.”

6) In OMWN, if we make the customization to make the comparison against Planned exchange rate how PRD IS affected? Can we separate and have the PRD clean with a real price difference?

a. [I believe the question was meant to highlight OMRW and not OMWN?].

i. OMRW Treatment of Exch. Rate Differences

ii. OMWN MM-IM: Acct Group. Code for Mvt.Type

b. In OMRW, one can configure whether the difference will be posted as price difference, or exchange rate difference.

c. If we select price difference, all difference is posted to PRD; if we select exchange rate difference, then exchange rate difference is posted to KDM, all other differences are posted to PRD.

d. It is a good practice to separate out PRD and KDM, that way procurement can be held accountable for the pure price differences.

7) What does the balance sheet adjustment do during FCV run?

a. This is more around whether you want to put the difference in a P&L account, which typically most clients do. The offset of that would be to do a balance sheet adjustment.

b. This feature is mainly applicable to the unrealized gain/loss on foreign currency translation.

c. Realized gain/loss are typically P&L accounts, where the final actual value of exchange rate is account for.

8) In standard functionality during customer billing, the accounting is captured by exchange rate type M. How can we change it to any other exchange rate type like G? Why wouldn't you put the currency on the document type?

a. If it is required that all customers to use a specific exchange rate type for billing, you would probably end up customizing.

b. There is also an option to setup exchange rate type for specific customer (table KNVV, field KURST).

9) What is the use of index-based currency?

a. Index-based currency is used for external reporting in a high inflation scenario.

10) Is it possible to understand the alternate exchange rate function as for countries like Poland where the regulatory requirement requires a daily exchange rate?

a. OBBS has following definition for Alternative exchange rate types: “Alternative exchange rate types are used to process currency translations for certain currency pair combinations from a given date using a different exchange rate type.”

b. This is applicable for expiring currencies (like BEF, DEM, FRF, NLG, etc. which switched to EUR).

c. Daily exchange rate can be maintained for any currency pairs, if needed to meet local legal requirements.

11) When you say 8 additional currencies, can you mention those currencies and how to assign them?

a. When you look at the details of SAP Note 2344012 - Currencies in Universal Journal, it highlights an example configuration with possible options to select currency types.

b. Currency codes are in turn assigned to currency types.

12) After go live, we need to introduce new currency in our transaction. How do we update in all documents posting? Is this possible to add a third currency (like hard currency) in a productive system?

a. Look for the “Manage Currencies” setup in SPRO under Financial Accounting à Financial Accounting Global Settings à Tools à Manage Currencies

b. This feature allows enriching data for existing company codes. Several steps are involved for Preparation and Execution of the currency conversion project.

c. System Landscape Optimization (SLO) / System Landscape Transformation (SLT) / Data Management and Landscape Transformation (DMLT) service may be needed in some instances.

About the Speaker

Ashish Sampat is a distinguished finance and costing professional with over 20 years of experience in the SAP Finance and Controlling space. Throughout his illustrious career, Ashish has consistently delivered innovative and effective solutions to global clients, addressing various complex challenges in SAP Controlling. His extensive expertise and dedication to excellence make him a sought-after consultant and speaker in the industry. Ashish's profound knowledge and practical insights will undoubtedly provide valuable perspectives to our webinar attendees.