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ERPCorp SAP FICO Blog
- Category: Blog
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SAP assembly scrap is used in production planning and product costing to account for expected losses when manufacturing finished or semi-finished products. In SAP S/4HANA, the assembly scrap percentage maintained in the material master helps Material Requirements Planning (MRP) plan additional production quantities and influences the quantities used in material cost estimates.
For example, if a manufacturer needs 100 good printed circuit boards (PCBs) and plans for 10% assembly scrap, SAP can increase the planned production quantity to account for expected losses. Assembly scrap also affects component consumption, production activities, and the planned cost of manufacturing.
In this article, we'll explain how assembly scrap works in SAP, where to maintain the scrap percentage using transaction MM02, and how to analyze its effect on standard costing using CK11N.
Read more: SAP Assembly Scrap: MRP, Material Costing, and S/4HANA
- Category: Blog
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By John Jordan
SAP subcontracting is a procurement process in which a company provides components to an external vendor that manufactures or processes a finished or semi-finished material. In SAP S/4HANA, the components are managed as stock provided to the vendor, and their consumption is recorded when the subcontracted material is received.
Subcontracting connects purchasing, inventory management, Material Requirements Planning (MRP), and product costing. For example, a manufacturer can supply components to a subcontractor, create a subcontracting purchase order using transaction ME21N, and record the finished material's goods receipt while accounting for the components consumed.
In this article, we'll explain how subcontracting works in SAP, how overhead and special procurement settings affect the process, and how outsourced manufacturing relates to material costing.
Read more: SAP Subcontracting in S/4HANA: Process, MRP, and Costing
- Category: Blog
- Hits: 39312
by John Jordan
Introduction
SAP S/4HANA provides several methods for allocating overhead costs to products and manufacturing orders. The three primary methods are activity rates, templates, and costing sheets.
1. Activity Rate:
You can either increase the planned activity price to include overhead, or create separate overhead activity types. Manufacturing orders are debited during activity confirmation, and production cost centers are credited.
Read more: SAP Costing Sheets in S/4HANA: How to Allocate Overhead
- Category: Blog
- Hits: 44723
By John Jordan
Actual Costing in SAP Material Ledger enables organizations to calculate the actual cost of materials by collecting and allocating price differences incurred during a period. These differences can arise from purchase price variances, production variances, and other inventory-related transactions.
At period-end, Actual Costing calculates a periodic unit price (PUP) that reflects the actual costs of procuring and producing materials. This provides greater transparency into material costs, inventory valuation, and cost of goods sold.
In SAP S/4HANA, Material Ledger is mandatory for inventory valuation, while Actual Costing remains optional.
- Category: Blog
- Hits: 39789
By John Jordan
Table of Contents
- Introduction
- No Period-End Processing
- Single-level price determination
- Multiple-level price determination
- Glossary
Introduction
The three period-end options when you activate SAP Material Ledger are:
- No Actual Costing - no period-end processing
- Single-level price determination
- Multilevel price determination
Here's more details of each option:
- Category: Blog
- Hits: 70257
By John Jordan
In SAP S/4HANA, materials are typically valuated using either Standard Price (S) or Moving Average Price (V). The appropriate price control depends on the type of material and how you want inventory price differences to be handled.
Read more: SAP Standard Price vs. Moving Average Price in S/4HANA
- Category: Blog
- Hits: 32985
By John Jordan
Introduction
Purchase Price Variance (PPV) in SAP S/4HANA occurs when the actual procurement cost of a material differs from the price used to value the material. For materials using Standard Price (S), differences between the standard price and purchase order, goods receipt, or invoice receipt values can be posted to price difference accounts.
Analyzing PPV helps Purchasing identify the causes of procurement cost variances, including changes in supplier prices, purchase order prices, freight costs, exchange rates, and invoice prices. Assigning PPV to Purchasing also provides greater visibility into the materials and transactions driving those differences.
Read more: SAP Purchase Price Variance (PPV): Posting and Analysis in S/4HANA
- Category: Blog
- Hits: 41714
By Stoil Jotev
Table of Contents
- Introduction
- Parallel Valuation in Asset Accounting
- Additional Representative Ledger Solution
- Alternative Solutions
- Conclusion
- Continue Reading
- Glossary
Introduction
Many companies operate in multiple regions and countries and must report on their fixed assets based on various legal and valuation frameworks.
Parallel Valuation in Asset Accounting
SAP S/4HANA provides the tools and processes to fulfill these parallel valuation requirements. Some of these requirements can be technically challenging, such as when using different fiscal year variants (FY variants) in the various valuation frameworks.
Read more: Fiscal Year Variants in SAP S/4HANA Asset Accounting
- Category: Blog
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BY Ashish Sampat
Several colleagues have asked me questions about integration of MM and FI such as:
- How do postings flow from Materials Management into Financial Accounting?
- How do we find out what occurs behind the scenes?
- How do we identify which movement types point to a specific General Ledger (GL) Account?
- How do you change the posting to a different GL Account?
- How do you create a new movement type and assign it to a specific GL Account?
This blog explains the fundamentals of MM-FI account determination. Let's start with some configuration basics, including OBYC.
- Category: Blog
- Hits: 64917
By John Jordan
How SAP Internal Order Budgeting Works
SAP Internal Order budgeting allows you to define approved spending limits for an Internal Order and monitor costs against those limits. Budgets can be maintained at an overall or annual level, depending on the requirements of the organization.
To understand how budgeting differs from planning in SAP Controlling, see our guide to SAP planning vs. budgeting.
Availability control monitors actual and committed costs against the available budget. When defined tolerance limits are reached, SAP can issue warning or error messages to help prevent spending from exceeding the approved budget.
The following example explains how to configure a budget profile, define availability control tolerances, enter an original budget, and post a budget supplement for an Internal Order.
Read more: SAP Internal Order Budgeting and Availability Control