SAP Innovations:Are you overlooking important functionality in SAP Controlling

© 2015 ERP Corp. All rights reserved.

SAP’s Innovations – Are You Overlooking Important Functionality in SAP Controlling?

Janet SalmonSAP SE

Introduction

• With the huge interest around SAP HANA and SAP Fiori it can be easy to miss some of the other innovations that SAP has been introducing.

• In this session we’ll look at how you can use some of the SAP HANA innovations without even implementing SAP HANA!

• We’ll look at some key business functions introduced with Enhancement Package 5:• FIN_CO_COGM • LOG_MM_SIT • LOG_EAM_OLC

• We’ll look at some new user interfaces introduced with Enhancement Package 6:• FIN_CO_CCMGMT• FIN_CO_CCPLAN and FIN_CO_ORPLAN3

Topics

• Finding Out About SAP’s innovations• New Reporting Options with SAP HANA

• Material Ledger• CO-PA

• New Business Functions for Controlling• FIN_CO_COGM• LOG_MM_SIT• LOG_EAM_OLC

• New Business Functions for the User Interfaces in Controlling• FIN_CO_CCMGMT• FIN_CO_CCPLAN, FIN_CO_ORPLAN

• Summary

4

SAP Innovation Discovery – Try It

https://apps.support.sap.com/innovation-discovery/index.html

Installing an SAP Enhancement Package

You will need to install an Enhancement Package to use many of the options discussed in this presentation.

Installing an Add-On…

You will need to install an add-on to use the following applications in Controlling:• SAP Fiori Add-On,• SAP Financial Closing cockpit

Topics





• Summary

8

One atomic copy of data for Transactions + Analysis, all in Memory

Eliminate unnecessary complexity and latency Less hardware to manage Accelerate through innovation, simplification + in-memory

3 copies of data in different data models Inherent data latency Poor innovation leading to wastage

Transactions + Analysis + Acceleration processes separated

SAP HANA(DRAM)

Transact

ETL

Analyze

ETL

Re-think Data Management for Real-time Business

A Common Database Approach for OLTP and OLAP Using an In-Memory Column DatabaseHasso Plattner

Accelerate

Cache VS

Data Warehouse Approach to Profitability Reporting

Transact

ETL

Analyze

ETL

Accelerate

Cache

Assigned to Operating Concern

Characteristics/Value Fields

Totals RecordsSummarization Levels…

Moved to InfoProviders

ExtractEnrichLoad…

Transactions RecordedIn CO-PA

InvoicesSales DocumentsAssessment CyclesSettlementOthers…

To Deliver

Profitability by Dimension…

Data Latency – Around 8 Hours

Leaner Approach to Profitability Reporting

UI: Analysis for Microsoft Office

TransactAnalyze

ETL

DataSource: BW Query

Operating Concern on SAP HANA

CE1 table (transactions)CE4 table (dimensions)

Virtual Info Provicder(Create using transaction KEIP)

Result for SAP IT: Postings to CO-PA are visible immediately and close schedule is reduced by three days.

Topics





• Summary

12

Virtual InfoProviders for Material Ledger

1. Use Transaction HDBC to display all options2. Select Material Ledger > Virtual InfoProviders3. Generate Virtual InfoProviders for Material

Ledger and Actual Cost Component Split

Virtual InfoProviders for Material Ledger (cont.)

Sample Report Provisioned Using Virtual Infoprovider

Generated Virtual Info Provider

• See Also: SAP Note 1654843 – ERP accelerators: Material Ledger- Virtual InfoProviders

Topics





• Summary

15

Virtual Info Providers for CO-PA

Use Transaction KEIP to Generate Your Virtual InfoProviderSee Also SAP Note 1667584 – Virtual InfoProvider for CO-PA

Virtual Info Providers for CO-PA (cont.)

Mastering SAP Financials 2013| 17

Info Provider for Your Operating Concern (Under Unassigned Nodes)

Sample Report Provisioned Using Virtual InfoProvider

Topics





• Summary

18

Activate Using Transaction SFW5 (Switch Framework)

All business functions are off by default.You will need to have your system administrator activate those you need.

Topics





• Summary

20

Parallel Accounting: Cost of Goods Manufactured

Value Flow — Overview

ControllingUpdate of Depreciation Expenses by Cost

Center and Version

Actual CostingPeriodic Costing RunUpdates either leading valuation or local valuation*

Version 0 (legal)(Actual rate)

Version N (par.

COGM) (Actual rate)

Actual CostingAlternative Valuation RunUpdates local valuation if both valuations use actual costs*

Depreciation Area 01 (IFRS) Asset Accounting

Perform Depreciation Run

Version 0(legal valuation)

Ledger 0L (IFRS)

Version N

Depreciation Area 02(Local GAAP)

Ledger N(Local GAAP)

(parallel COGM)

Version N (par. COGM)(Actual rate)

ControllingDirect Activity Allocation at standard;

Actual Rate Calculated at Period Close

Version 0 (legal)(Actual rate)

Version 0 (legal) (Standard rate)

Version N (par.COGM)(Actual rate)

OR

Financial AccountingUpdate of General Ledger

Post depreciation in Asset Accounting

Transfer depreciation to General Ledger

Transfer depreciation to Cost Center Accounting

Transfer of depreciation from asset accounting to controlling

The depreciation values for the international accounting principle are updated to the leading ledger in the SAP General Ledger application (or the global accounts in the classic general ledger) and to version 0 in controlling. The depreciation values for the second accounting principle are updated to a nonleading ledger in the SAP General Ledger (or the local accounts in the classic general ledger) and to a delta version in controlling.

* Improvements

Allows global manufacturing organizations to set activity prices that take account of depreciation according to IFRS and local GAAP.

In previous releases, only the values in the leading ledger were transferred to controlling. Other values were unavailable for controlling and therefore could not be used to determine activity prices and update inventory values for the goods manufactured.

Customer business challenges Business value

Asset Accountant

*

Financial Accountant ControllerParallel Accounting and

related processes*

Calculation of activity prices to reflect multiple accounting approaches

During all operational processes (such as confirmations and backflushing in logistics), the hours worked are valued with the planned activity rate in version 0 in controlling. At period close, activity price calculation is used to determine the actual activity rates for the leading version (international accounting standard) and the alternative version (local GAAP) in that period. Both are calculated as deltas to the initial standard activity price.

Perform order confirmation/backflushing

* Improvements

Calculate standard activity rates

Include standard activity rates in material ledger

Calculate actual activity rates for both approaches

Controller

Reduces manual effort at period close.

In previous releases, it was possible to calculate only activity prices to take account of the leading valuation. Alternative approaches required manual workarounds.


Record working time

*

ControllerShopfloor Employee

Inventory Accountant

Parallel Accounting and related processes*

Select actual activity rates for activities used during period

Calculate actual product costs in leading or alternative valuation

Revalue material inventory in leading or alternative valuation

Inclusion of multiple activity prices in periodic costing run

Allows the periodic costing run to use activity price from leading valuation to determine the cost of goods manufactured according to the global accounting standard, and update the inventory values accordingly

May also be used to calculate actual costs according to the local accounting standard, if the group accounting approach is standard costs

* Improvements

Reduces manual effort at period closePeriodic costing run only allows the inclusion of activity prices in version 0


**Parallel Accounting and

related processes*

Controller/Inventory Accountant Inventory Accountant

Controller/Inventory Accountant

Select actual activity rates for activities used during period

Calculate actual product costs for period in alternative valuation

Revalue material inventory in alternative valuation

Inclusion of multiple activity rates in alternative valuation run

Allows multiple valuation runs to be created to determine the value of the cost of goods manufactured. The periodic costing run uses the activity price for the leading valuation (version 0) while the alternative valuation run uses the activity price for the alternative valuation. It is then possible to revaluate inventory (create closing entries) to take account of both valuations.

** Improvements

Reduces manual effort at period close.In previous releases, the alternative valuation run could include different approaches to the valuation of raw materials, such as FIFO, LIFO, and so on, and initiate activity price calculations for the periods selected. Now activity prices for the relevant version can be included in the run.


*

Parallel Accounting and related processes*

Controller/Inventory Accountant Inventory Accountant

Controller/Inventory Accountant

Parallel Accounting: Asset Accounting

Smart Financials

Processflow:

Generated documents by settlement:

(2) With Acc.Principle local GAAP

D 70 Machines 32000 10.200

C 50 Other Expenses 415000 10.000

C 50 Freight Expenses 472000 200

IFRS

D 70 Machines 32000 10.000


Assumptions: • Freight Costs are capitalized under

IFRS only• 100% of other expenses are

capitalized under IFRS and local GAAP

• 80% of other expenses are capitalized under Tax Law.

local GAAP

(2c) With Acc.Principle TAX D 70 Machines 32000 8.000


Tax

(1) With Acc.Principle IFRS

Investm. Order

Other expenses,Freight costs

Ext. Procurement,Production costs

Settlement AuC, Asset

Parallel Accounting for Fixed Assets

FI-AA (New) – Settlement

• CO generates accounting principle specific postings• Assign settlement rule for AuC: you need to assign a settlement

rule for each line item (per accounting principle)

Topics





• Summary

30

Stock in Transit and Actual Costing

Stock in Transit for (Cross-Company-Code) Sales Processes

During the transportation phase companies, can keep ownership of the materials that are sent to a customer or another company code (visible as stock in transit in this company).

Alternatively, ownership for these materials (during the transportation phase) can be directly transferred to the receiving company code (visible as stock in transit in the receiving company code).

There is also an option to move materials from one stock in transit to another.

Delivered by Business Function: Cross-Company-Code Stock Transfer & Actual Costing

Create Stock Transport Order

* Improvements

This functionality enables companies to track and manage ownership changes better when selling materials to a customer or another company code.

Companies can more easily fulfill the legal requirement of showing all the stock values in the group.

In sales processes and cross-company transfer processes, it was impossible to model stock in transit. The ownership of the material was not reflected correctly in SAP ERP.

When selling materials from one company code to another using the two-step approach, the stock value did not automatically appear in the balance sheet after the first step.


Purchaser

Create Cross-Company Delivery

Perform Goods Issue

Perform Goods Receipt

Manage Ownership Transfer *

*

Plant Manager Warehouse Clerk Warehouse Clerk

*

EHP 5: Cross-Company Code Material Transfer with Stock in Transit

Sender Company Code Receiver Company Code

Sender‘s Free Stock

In plant In transit In plantIn transit

OutboundDelivery

Purchase Order

Receiver‘sFree Stock



Sender‘s Transit Stock1



Sender‘s Transit Stock2 Receiver‘s

Transit Stock



Receiver‘s Transit Stock 3

Immediate Transfer (1-step scenario)

Goods stay in sender’s ownership during transfer

Ownership changes during the transfer, e.g., upon arrival in the port of destination

Ownership changes when leaving the sender

0

Actual costs and internal profit in company 1

Actual costs and internal profit in company 2

Actual costs and internal profit for the whole group

Cross-Company-Code Actual Costing

By activating this business function, you can extend material and actual costing to run across company codes without losing actual costs and actual cost component split at the company code border. The intercompany sales process allows transfer of the costs and cost component split information from the sending company code to the receiving company code. Calculation of mark-up or intercompany profit in such a value chain is also supported.

Delivered by Business Function: Cross-Company-Code Stock Transfer & Actual Costing

** Improvements

• Markups and transfer profits visible in cost element • Legal valuation: show transfer profit in actual cost component split• Group valuation: rollup of price variances • Group valuation: rollup of actual cost component split

Up to now, customers could not transfer actual cost component split information from one company code to another.

Marks-ups could not be used in a cross-company-code sales scenario.


Cost accountant company 1

**

Cost accountant company 2 Group controller and portfolio manager

Cross-Company Actual Costing

Group

Company A

Company B

CostsRaw Mat. 20 Energy 25Labor 15Production 40

CostsRaw Mat. 100 Energy 0Labor 0Production 0

Sales process

Actual costing provides no visibility into cost structure after intercompany sales

The enhanced solution shall ensure cost transparency during intra-company sales by adding freight costs and intra-company profits to the costs incurred in the selling company code to provide a correct valuation from a group perspective

Issue Requirement

General Mechanism of Cost Transfer

• The new stock in transit processes secure that the inventory value is always recorded and present in material ledger.

• When a stock transfer between company codes is posted, ML records the value from the purchase order in parallel to the cost at the sending side.

• The PO price is used for the legal valuation, the cost is used for group valuation. The difference of both is shown as mark-up.

• If actual costs at sender are recalculated the mark-up and the group costs are adjusted.

Plant 1Total cost 1000

Materials 500

Labor 400

Overhead 100

Freight

CC Markup 0

Sold to


Materials 1100

Labor 0

Overhead 0

Freight

CC Markup 100

PO-Price1100,-

37

Comparison of Views

• There are 3 different implementation options:• Legal View (LV): contains the markup, but will show no cost component

information from supply chain members outside the own company. Materials purchased from affiliate companies will populate only the material cost component and the markup • Default in currency type 10.

• Transparent Legal View (TLV): Contains the markup, and will preserve cost component information coming from affiliate companies if the logistical process allows that.• Activated by a BADI in currency type 10.

• Group View (GV): Can be used in parallel to the LV or TLV in a parallel valuation. Does not show a markup, since all processes are treated as if the plants were part of the same organization, without taking company code borders into account.

• Currency type 11 or 31.• An implementation can use either LV or TLV. GV can be added for both• The 2 typical scenarios to evaluate would be only TLV or LV + GV

Valuation Example in 3 Views

• LV (Legal View)• Total Cost from PO +

Freight Cost• Markup shown• CC collapsed


Materials 500

Labor 400

Overhead 100

Freight

CC Markup 0

Sold to

Shipper

Plant 2 LV TLV GVTotal cost 1175 1175 1075

Materials 1100 600 500

Labor 0 400 400

Overhead 0 100 100

Freight 75 75 75

CC Markup 100 100 100

PO Price1100,-

Freightinvoice75,-

• TLV (Transparent Legal View) • Total Cost from PO +

Freight Cost• Markup shown• CC from Sender• Material cost include

markup

• GV (Group View)• Total Cost from

Sender + Freight• No Markup• CC from Sender

Screenshots in Group View

Plant 2000 sold 5 PC to plant 1000 within the same group:Cost Info is preservedNo Mark-up is shownA transit stock on the sending side was used intermediately

Screenshots in Transparent Legal View

Plant 2000 sold 5 PC to plant 1000 in another company codeConsider the different currencies:

GBP in plant 200

EUR in plant 1000

Currency conversion will take place using the rate GBP /EUR

The PO / Invoice Price was 4000 EUR

The cost component info is transferred (TLV is activated via BADI)

The consumption cost component for the material in plant 1000 is ‘other cost’. Therefore the ‘Delta Company Code’ is mirrored there

Usage of Transit Stock (Legal View)

1. Material is produced in plant 2000 using 2 materials and one activity

2. Material is moved into the transit stock, keeping its value

3. Material arrives in plant 1000 at the PO price of 4000 EUR

Topics





• Summary

42

Operation Account Assignment

existing header costed orders operation level costing

header

operation

operation

operation

costs:plan/actual header

operation

operation

operationcosts:plan/actual

costs:plan/actual

costs:plan/actual

Operation Costs

Update of Plant Maintenance Cost View

OAA Order

The system status I0053 (ACAS in English) is displayed when the order operation is the account assignment object. This is the same indicator as for a PS network with activity level costing.

• Indication using System Status

OAA Order

• Account assignment details and operation costsThe account assignment details for an operation are shown on the Account Assignment tab of the operation detail view.Sub-operation account assignment values are inherited from the superior operation.The costs are displayed in the cost tabs on the lower panel.

existing header costed orders

operation level costing

header

operation

operation

operation

costs:plan/actual header

operation

operation

operationcosts:plan/actual

costs:plan/actual

costs:plan/actual

ORnnnn………

Reporting / Transactions / Extraction

Transformation of costs

(plan/actual) according to

value categories

OVnnnnOVnnnnOVnnnn…………

Stored in database as

Dynamic summation for header values

Operation Costs

• Update of Plant Maintenance Cost View

OAA order costs are only stored for the operation objects. Header totals are dynamically summed as required. No costs are stored on the database for the OAA Order object.

Reporting

The operation cost overview report shows costs for all operations by value category.The report can be run as a transaction IW40N and include sub-orders.

• Operation overview report

Topics





• Summary

49

Activate Business Function and Relevant WebDynpros!

50

Use transaction SICF to activate the relevant webdynpro applications

Copy the WebDynpros from the Sample Roles to Your Controller Roles

51

Copy the delivered master data applications from the role SAP_CO_INTERNAL_CONTROLLER to your roles

Topics





• Summary

52

WebDynpro Application for Cost Center Maintenance

53

Rolle

Configurable UI

54

WebDynpro Application for Cost Center Hierarchies

55

Inactive Versions

56

Changes can be made prior to a reorganization and stored as an inactive version

Inactive Versions (cont.)

57

Choose between versions in the application and in, e.g., Report Writer

Web Dynpro Application for Internal Orders

58

Web Dynpro Application for Activity Types

59

Topics





• Summary

60

Projects: Cost Element Planning

61

Projects: Top-Down Planning

62

Web and Excel Frontend in EhP6

• Both frontends use the same backend planning model• Same planning queries and same planning functions

• All features described are available in both frontends

Web Dynpro Analysis Office

Query Adaptations

• Customers want to see: • Actual values• Plan values from other

years/versions• Formula columns

• „Planning is like reporting with editable columns“

Topics





• Summary

65

SAP Resources

• http://help.sap.com/businesssuite > SAP ERP• Business Functions in SAP ERP > Enterprise Business

Functions > Accounting• CO, Parallel Cost of Goods Manufactured• CO, Cost Center Managerment• CO, Cost Center Planning• CO, Order Planning• Business Functions in SAP ERP > Enterprise Business

Functions > Logistics• MM, Stock in Transit and Actual Costing• Operation Account Assignment

67

Resources (cont.)

• www.financialsexpertonline.com/• Janet Salmon, “Provide Parallel Product Costs for Inventory Valuation in

the SAP General Ledger” (Financials Expert, October 2009).• Janet Salmon, “Use Alternative Valuation Runs in the Material Ledger to

Smooth Seasonal Price Variances” (Financials Expert, November 2007).• Marco Jordy “Don’t Wait Until After Go-live to Set Up Cross-Company

Code Controlling” (Financials Expert, September 2006).• Ashim A.Nanda “Cater to Arm’s Length Standards by automated

Intercompany Transfer Pricing Design” (Financials Expert, October 2010).• Janet Salmon, “Capture Service and Maintenance Costs at Operation

Level from SAP Enhancement Package 5” (Financials Expert, December 2012).

• Janet Salmon, “Refresh the Look of the Master Data in Cost Center Accounting with a New Business Function” (Financials Expert, February 2013).

68

Resources (cont.)

• https://scn.sap.com/docs/DOC-32680• http://scn.sap.com/docs/DOC-29523• SAP Notes 1836149, 1719702 (project planning) and

1777947 (cost center planning)

Other Resources

Janet Salmon, Controlling with SAP – Practical GuideISBN: ISBN 978-1-4932-1012-1https://www.sap-press.com/controlling-with-sap-practical-guide_3625/

Martin Munzel, New SAP Controlling Planning Interface

http://co.planning.espresso-tutorials.com

Five Key Ideas

70

• Use SAP Innovation Discovery to find out about Enhancement Packages, SAP Notes and other innovations

• Consider using virtual InfoProviders to improve your end user reporting

• If you are a global company, explore the new functions for Actual Costing and Multiple Valuations

• Don’t forget that some of the CO-related innovations might be in Logistics because of the integrated nature of SAP ERP

• Consider updating the look of your user interfaces and planning applications, especially if you are bringing new users online

Questions

• Now:• Ask questions now for immediate answers

• Later:• [email protected]

71

Q&A

Disclaimer

SAP®, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP® products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. ERP Corp is neither owned nor controlled by SAP.

Technology

SAP Innovations:Are you overlooking important functionality in SAP Controlling