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8/3/2019 Cross Company Actual Costing
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Cross Company Logistics and
Actual Costing
Dr. Ralf HumbertDevelopment Architect Material LedgerSAP
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SAP 2007 / Page 2 SAP 2008 / Page 2
Disclaimer
This presentation outlines our general product direction and should not berelied on in making a purchase decision. This presentation is not subject toyour license agreement or any other agreement with SAP. SAP has noobligation to pursue any course of business outlined in this presentation or todevelop or release any functionality mentioned in this presentation. Thispresentation and SAP's strategy and possible future developments are
subject to change and may be changed by SAP at any time for any reasonwithout notice. This document is provided without a warranty of any kind,either express or implied, including but not limited to, the implied warrantiesof merchantability, fitness for a particular purpose, or non-infringement. SAPassumes no responsibility for errors or omissions in this document, except if
such damages were caused by SAP intentionally or grossly negligent.
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SAP 2007 / Page 3
Introducing a Valuated Stock in Transit
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SAP 2007 / Page 4
Issue 1:
Intercompany Stock Transfers within the Group
Company A Company B
Shipping
Dec. 16th, 100.000
Goods Receipt
Feb. 5th, 100.000 (+ Transf. Profit)
During the Transport Stock disappears from the Books!
Group StockDec. 15th 2.000.000Dec 16th 1.900.000 !!!Feb 5th 2.000.000 (+Transfer Profit)
Stock at Company ADec 15th 1.000.000Dec 16th 900.000
Stock at Company BDec 15th 1.000.000Feb 5th 1.100.000 (+TP)
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SAP 2007 / Page 5
Usage of valuated Stock-In-Transit
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SAP 2007 / Page 6
Goods MovementsProcess variants using stock in transit
Sender Company Code Receiver Company Code
Senders
Free Stock
In plant In transit In plantIn transit
BillingDocument
PurchaseOrder
ReceiverssFree Stock1
Senders
Free StockReceiverssFree Stock
Senders
SIT2
Senders
Free StockReceiverssFree Stock
Senders
SIT3Receiverss
SIT
Senders
Free StockReceiverssFree Stock
Receivers
SIT4
681
681
685 / 107T
683 / 107 T
109
109
645 / 101
685 / 101
VL02N VLPOD MIGOCorresponding t-codes to movement types:
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Goods MovementsReturns
Sender Company Code Receiver Company Code
Senders
Free Stock
In plant In transit In plantIn transit
PurchaseOrder
ReceiverssFree Stockr1
Senders
Free StockReceiverssFree Stock
Senders
SITr2
Senders
Free StockReceiverssFree Stock
Senders
SITr3Receiverss
SIT
Senders
Free StockReceiverssFree Stock
Senders
SIT
ReceiverssSITr4
BillingDocument
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Solution PropertiesValuated Stock in Transit
The Solution will have the following properties:
Stock in Transit (SIT) will be valuated
SIT valuation will be stable and separated from the free stock
SIT stocks postings can be on separate G/L accounts
New Movement types for transfers between free stock and SIT and between SITs
Ownership transfer may be triggered by proof of delivery
Returns out of SIT will be posted with the original material value
Usage of SIT configured by STO order line item type, material, supplier
Solution will support:
Handling Units
Batches
Sales order Assignments
Actual costing
Parallel valuation, e.g. group valuation with transfer prices
Profit center accounting
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Basics of Actual Costing
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Issue 2
Cross-Company Actual Costing
2
GroupCompany
1Company
2
CostsRaw Mat. 20Energy 25
Labour 15Production 40
CostsRaw Mat. 100Energy 0
Labour 0Production 0
Sales process
Actual costing provides no visibility intocost structure after inter-company sales The enhanced Solution shall keep thecost transparency through inter-company sales and add freightcosts and intercompany profits tothe costs from the selling companycode from a group point of view
A solution to issue 1 is precondition tosolve issue 2 in standard
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Parallel CurrenciesValuation with Historic
Exchange Rates
Reasons for Usage of Material Ledger
Parallel ValuationTransfer prices
Group Legal Profit Center
Transparencyof Value Chain
Actual CostingMulti-level
Periodic Material Prices
MaterialLedger
Inventory Valuation
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Actual Costing
Material Movements
Purchasing
Invoices
Production order settlements
Debits/Credit
Goods Issue to Production
Activities to Production
Goods receipt from Production
Stock Transfers
Sales
Building the Quantity Structure
Collection of Values into price
determination scheme
Quantity Value ValueVariances
Price
BeginningInventory
Receipts
CumulativeInventory
Beginning Inventory + Receipts
Consumption
Ending Inventory Cumulative Inventory - Consumption
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External Procurement
Multilevel Price Determination
Production
Production
D
D
D
D
D
Roll-upprice differencesDfrom raw materials to
finished materials
External Procurement
D
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External Procurement External Procurement
Production
Production
Actual Cost Component Split
D
D
D DD
Material
Process
Overhead
Labor
DD
Profitability
Analysis
Material
Process
Overhead
Labor
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Actual Values in Profitability AnalysisContribution Margin Accounting Cost of Sales Split into Cost Components Plan/Actual Variance Analysis
Profitability Analysis based on Actual Costs
Plan Actual Var. % Var. Abs.
Revenues: 100,000 US$
Sales Quantity: 1,000 pc
50,000 45,000 5,000 10 %Raw Materials4,000 5,000 -1,000 - 25 %Labor variable4,000 4,500 - 500 - 13 %Machine variable
10,000 7,000 3,000 30 %Logistic Processes
5,000 5,500 - 500 - 10 %Material Overheads6,00027,000 33,000 22 %Contribution Margin I
10,000 10,000 0 0 %Labor fix7,000 7,000 0 0 %Machine fix
10,000 16,000 6,000 60 %Contribution Margin II
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Product Cost Controlling Through a Period
Cost Planning Production Actual Costing ProfitabilityAnalysis
Evaluating masterdata
Bill of materials
Routing
Planned prices
Planned activities
Planned yield
Recording logisticalinformation forcontrolling:
Consumptions
Yield & scrap
Purchasing & supplierinvoices
Activities & timerecording
Recalculating thevalue flow using
Actual quantitystructure
Actual activity
recording Multi-level value flow
Actual raw materialprices
Reporting Costs andContribution Margins
Production costs
Sales Revenues
Dimensions
Regions
Channels
Customers
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Screenshotsperiodic costs
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Valuated Quantity Structure
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Profitability Analysis
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Enhancement for Cross-Company ActualCosting
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Typical Sales Process in a Global Group
Plant GroupMarketing
RegionalSalesOrg
Customer
Several group internal sales processesbefore a product reaches a customer
CostsRaw Mat.EnergyLabourProductionMaintenanceFreightMarketingDutiesIntercompany profit
Sales Costs
CostsRaw Mat.EnergyLabourProductionMaintenanceFreightMarketingDutiesIntercompany profit
Sales Costs
CostsRaw Mat.EnergyLabourProductionMaintenanceFreightMarketingDutiesIntercompany profit
Sales Costs
RevenuesCostsRaw Mat.EnergyLabourProductionMaintenanceFreightMarketingDuties
Intercompany profitSales CostsProfit
In SAP standard an internal sales process cuts the value flow foractal costs. Costs will only be transparent for the last step in
the chain. Costs from previous steps will appear as rawmaterial costs only
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Sales Processwith enhanced Cross-Company Actual Costing
Plant GroupMarketing
RegionalSalesOrg
Customer
2 group internal sales processesbefore a product reaches a customer
CostsRaw Mat.EnergyLabourProductionMaintenanceFreightMarketingDutiesIntercompany profit
Sales Costs
CostsRaw Mat.EnergyLabourProductionMaintenanceFreightMarketingDutiesIntercompany profit Plant
Sales Costs
RevenuesCostsEnergyLabourProductionMaintenanceFreightMarketingDutiesIntercompany profit PlantSales CostsIntercompany profit Marketing
Profit
With the enhancement the profitability will make cost and profitcontributions from the whole chain transparent.
Actual costs of the month in mine, marketing and sales will be
compared with actual revenues
CostsRaw Mat.EnergyLabourProductionMaintenanceFreightMarketingDutiesIntercompany profit Plant
Sales CostsIntercompany profit Marketing
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Issue 2
Cross-Company Actual Costing
GroupCompany
1Company
2
CostsRaw Mat. 20Energy 25
Labour 15Production 40
CostsRaw Mat. 100Energy 0
Labour 0Production 0
Sales process
Actual costing provides no visibility intocost structure after inter-company sales The enhanced Solution shall keep thecost transparency through inter-company sales and add freightcosts and intercompany profits tothe costs from the selling companycode from a group point of view
A solution to issue 1 is precondition tosolve issue 2 in standard
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SAP solution multiple steps
Production
legal group
Total cost 1000 1000
Materials 500 500
Labor 400 400
Overhead 100 100
Freight
Sold to
Shipper
Trader
legal group
Total cost 1200 1100
Materials 1100 500
Labor 0 400
Overhead 0 100
Freight 100 100
Invoice1100,-
Freightinvoice100,-
Regional sales
legal group
Total cost 1350 1150
Materials 1000 500
Labor 0 400
Overhead 0 100
Freight 50 150
Sold to
Invoice1300,-
Freightinvoice50,-
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Properties of the Solution
Cross-Company actual Costing
The Solution will have the following properties:
- Cross-Company Sales Process is a multi-level process. Actual costs will be transmitted atfollowing events
- Goods receipt
- Invoice receipt
- Period end closing
- As part of the cost component split intercompany profits will be shown at receiver bycomparison of invoiced price with actual cost at sender
- Configuration to define cost components as inter-company profits
- Legal valuation will include intercompany profits, group valuation will exclude these
- Freight costs and other delivery costs will be added to actual costs
- Mixed scenarios of (internal) procurement, own production and further process steps will be
supported
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Thank you!