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John Jordan is Lead SAP Controlling Consultant at ERP Corp. We improve your SAP Material Ledger, Profitability Analysis, and Controlling experience and prepare you for SAP S/4HANA. Contact John at jjordan@erpcorp.com
John has authored 3 SAP Controlling SAP PRESS bestsellers. 

Display SAP MM-FI Automatic Account Assignment

JJ newOBYC is the transaction you use to assign SAP General Ledger (GL) accounts in Financial Accounting (FI) to movement types in Materials Management (MM), also known as SAP MM-FI Automatic Account Determination.

End users do not typically have authorization to run OBYC. 

Let's see how you easily display automatic account assignment.

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Reasons to Attend SAP Controlling 2021 Conference

WhatsApp Image 2021 06 28 at 11.51.06 AM

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SAP Assembly Scrap Basics

JJ old

SAP assembly scrap allows you to plan for faulty assemblies.

Since no production process is perfect, there is always a percentage scrap produced. You can either scrap or rework assemblies and components that do not meet quality standards. Depending on the problem, you may scrap cheaper items and rework costly items.

When working on SAP Scrap we recommend you work with our ERPCorp experts: Learn about ERPCorp Coaching & Consulting.

 

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SAP Subcontracting

JJ newSAP Subcontracting involves sending components to a vendor where an assembly is manufactured. The vendor returns the completed assembly, and during goods receipt, the components are issued from subcontract inventory. Subcontracting is a purchasing-controlled process.

Special procurement type in the material master MRP 2 view determines when you manufacture a material with the subcontracting process.

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SAP Cost Estimates and Procurement Type

JJ newSAP cost estimates determine how the material is sourced by the procurement type. Material requirements planning (MRP) guarantees material availability by monitoring stocks and requirements and by generating planned orders for procurement and production. A cost estimate needs data on how the material is procured as the first step in determining material cost. Let’s see how to display procurement types and then look at how cost estimates utilize this information.

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SAP Actual Cost Component Split

JJ new

SAP Actual Costing with SAP Material Ledger allows variances to flow to semi-finished and finished products based on the consumption of lower-level components. While multi-level price determination allows you to see the actual price of all materials at the end of the period, you cannot display price differences rolled up separately from the lowest to highest-level materials. You only see price differences assigned from the next lowest level.

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SAP Costing Sheets Allocate Overhead

JJ newThere are 3 methods to distribute overhead costs to the cost of goods sold for the standard price. In increasing level of flexibility and complexity:

Activity Rate: You can either increase the planned activity price to include overhead or create separate overhead activity types. Manufacturing orders are debited and production cost centers credited during activity confirmation.

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Add Cost Component Groups to Cost Components

JJ newCost components group similar cost types together by cost element. Typically materials, labor, and overhead.

Cost components are not available as columns in standard cost estimate list reports. However, they are useful when analyzing production or purchasing performance across a range of products. Add cost components to standard cost estimate list reports and costed multilevel BOM reports by creating cost component groups and assigning them to cost components.

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Actual Costing with SAP Material Ledger

JJ new  SAP Material Ledger has two basic functions:

  - Carry inventory in multiple currencies and valuations

 - Actual Costing

 In this blog we discuss Actual Costing in detail:

Actual costing generates a material ledger document for all goods movements at standard price (preliminary valuation). At period-end, the actual price is calculated for each material based on the actual costs of the period. The actual price is called the Periodic Unit Price (PUP) and can be used for the following at period-end:

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SAP Material Ledger Period-End Closing

JJ newYour three period-end options when activating SAP Material Ledger are:

 - No period-end processing

 - Single-level price determination

 - Multilevel price determination

Let’s discuss each in detail.

 

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SAP Standard vs Moving Average Price

JJ newYou choose standard or moving average price for inventory valuation. Let’s discuss each method in detail. You change the price control indicator with transaction MM02 or by following menu path: Logistics • Material Master • Material • Change

Navigate to the Costing 2 view to display the screen shown in Figure 1.

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Post Purchase Price Variance (PPV) to Purchasing

JJYou typically retrieve the standard price for purchased materials from purchasing info records during a costing run. Purchasing info records store vendor quotations per material as an estimate of your plan purchase price.

You post  purchase price variance (PPV) during goods and invoice receipts if the actual purchase price is different from standard. You use it to measure Purchasing performance and have Purchasing explain an increase in unfavorable PPV postings.

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SAP Controlling Tip 100: Frequently Asked Questions

Tip 100 from 100 Things You Should Know About Controlling with SAP (2nd Ed) by John Jordan:

You can reference SAP Note 552486 for answers to frequently asked questions about Product Cost Controlling (CO-PC). Process orders provide you with extra functionality, such as phases and process instructions for process industries. 

The Online Service System (OSS) contains a database of useful information and advice on fixes for SAP system issues, consulting notes, and frequently asked questions. OSS Note 552486 contains advice on 14 SAP Controlling frequently asked questions. In this tip, we'll discuss how to access OSS Note 552486 adn we'll go over the note's first couple of questions and answers. 

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Wednesday, 18 October 2017 06:14
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SAP Controlling Tip: How to create an internal order budget

ExclusiveContentBlog250Tip 14 from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:

You can use internal order budgeting to control actual expenditures by activating availability control. 

An internal order budget represents funds approved by management. A budget is maintained at either an overall or annual level. You can activate availability control, which can issue warning or error messages based on defined tolerances. Let's look at how to create an internal order budget and how to activate availability control.


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You can maintain a budget profile with Transaction OKOB or via the following IMG menu path: Controlling • Internal Orders • Budgeting and Availability Control.

Double-click a budget profile to display the the internal order budget profile. Activation type 1 indicates automatic activation of availablity control during budget allocaiton. If the Overall checkbox is selected, availability control checks against the overall budget. If it isn't selected, availaiblity control checks against the annual budget. Availability control works with controlling area currency, unless you select the Object Currency checkbox. You can assign the budget profile to an order type with Transaction KOAB or via the first menu path.

You can maintain availability control tolerances via the following IMG menu path: Controlling • Internal Orders • Budgeting and Availability Control • Define Tolerance Limits for Availibility Control

Left-click then right-click in an action field and selct posible entries to display the avabilty control and tolerance limits screen.

The action field defines the messages and emails the system will send at specific degress of budget overrun. In this example, when the budget is nearly consumed at 95%, a warning is issued with an automatic email to the persons responsible. Specify a budget manager with Transaction OK14, or the system will issue an error message. With a budget overrun at 105%, an error message is issued. 

You can enter an order budget with Transaction KO22 or via the following menu path: Accounting • Controlling • Internal Orders • Budgeting • Original Budget.

Keep reading in Things You Should Know About Controlling with SAP (2nd Edition)Use coupon code CTLSP10 for 10% off on www.sap-press.com.

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SAP Controlling Tip: Process versus Production Orders

JJordan400ResizedTip 50 from 100 Things You Should Know About Controlling with SAP (2nd Ed)

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Process orders provide you with extra functionality, such as phases and process instructions for process industries. 

If you use production orders, the system transfers a routing and a bill of material (BOM) into the master data of the order header. If you’re manufacturing on the basis of process orders, the system uses the master recipe and associated materials list. The difference occurs because process industries manufacture in phases, converting initial liquid batches into consumable batches, which are then bottled and packaged.

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When Should I Use An SAP Internal Order?

139 3D Cover Internal Orders

Why would you use an internal order? Here a few examples:

    You're managing an event with several cost centers.

    You'll settle major repair costs to a production line cost center.

    You're responsible for a fleet of service vehicles with a cost center.

    You're managing a capital project with a budget.

    You need to measure revenue and cost for a non-standard event.

Each of the above examples require:

    An order with actual/plan cost, and a settlement rule or a periodic reposting cycle to cost centers.

    An order with actual/plan cost, and a settlement rule to a profitability segment.

    An order with statistical cost, and a real cost-center assignment.

    An order with an investment profile, budget, and availability control.

    An order with revenue, and perhaps a sales order line item assignment.

You can see the combinations and possibilities of internal orders are quite flexible.

To learn more about SAP internal orders and other SAP FICO topics please visit our new SAP FICO Learning Center, please click here

Marjorie Wright is an SAP expert, author, and speaker, and is the founder of Simply FI-CO, LLC, a boutique SAP training consulting company. She is an education consultant in SAP FICO and financial supply chain management. With more than 25 years of training and accounting experience across multiple industries, she has conducted training for more than 3,500 learners.

 

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Cloud ERP vs On-Premise ERP

Forrest Burnson at Software Advice, a firm that helps buyers choose ERP software, recently wrote an article called Cloud ERP vs On-Premise ERP.  The article provides a breakdown of the advantages and disadvantages of each type of ERP system, and how you can determine which system is best for your organization.

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SAP Controlling Tip 100: Frequently Asked Questions

Tip 100 from 100 Things You Should Know About Controlling with SAP (2nd Edition) by John Jordan:

You can reference SAP Note 552486 for answers to frequently asked questions about Product Cost Controlling (CO-PC). Process orders provide you with extra functionality, such as phases and process instructions for process industries. 

The Online Service System (OSS) contains a database of useful information and advice on fixes for SAP system issues, consulting notes, and frequently asked questions. OSS Note 552486 contains advice on 14 SAP Controlling frequently asked questions. In this tip, we'll discuss how to access OSS Note 552486 adn we'll go over the note's first couple of questions and answers. 

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SAP Material Ledger - Excerpt: 100 Things You Should Know About Controlling with SAP

Excerpt: 100 Things You Should Know About Controlling with SAP (2nd Ed)

by John Jordan

When working on SAP Material Ledger we recommend you work with our ERPCorp experts: Learn about ERPCorp Coaching & Consulting.

 

SAP Material Ledger allows you to carry inventory in up to two additional valuations and actual cost:

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Electronic Bank Statement & Lockbox in SAP ERP: How is the lockbox file different from the electronic bank statement file?

Lennart Ullmann SAP Electronic Bank StatementHow is the lockbox file different from the electronic bank statement file?

The lockbox file contains the remittance information the customers have sent to the bank, for example amount and number by invoice. That level of payment information allows easy reconciliation and clearing of open items in SAP Accounts Receivable. It is normally used for check payments only.

Within the electronic bank statement file you can have various types of payment transactions. The remittance information in the electronic bank statement file is limited and provides you with the consolidated amount paid by the customer. It is possible to use only one of these services, or both in combination, depending on the company’s needs. When using lockbox and electronic bank statement it is important to set up the posting rules in SAP correctly to avoid incorrect postings. The main lockbox program will debit the bank clearing account for accounts receivables and post a credit entry to the bank clearing account for incoming checks (lockbox). In a second posting area, the program will debit the bank clearing account for incoming checks and clear open items in the customer accounts. The remaining open items on the bank clearing account for accounts receivables will be cleared through the electronic bank statement. The electronic bank statement will debit the main bank account and credit the bank clearing account for accounts receivable.

Excerpt from Electronic Bank Statement & Lockbox in SAP ERP by Lennart Ullmann and Claus Wild.

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