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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:

Carry material prices in multiple currencies and valuations

Material inventory values are normally carried in only company code currency. SAP Material Ledger enables you to carry inventory values in two additional currencies/valuations by updating all goods movements in the Material Ledger in up to three currencies or valuations. Currency amounts are translated into foreign currencies at historical exchange rates directly at the time of posting. 

Value inventory at actual costs

Actual costing valuates all goods movements within a period at the standard price (preliminary valuation). All price and exchange rate differences for the material are collected in the Material Ledger.

At the end of the period, an actual price is calculated for each material based on the actual costs of the period. This actual price is called the periodic unit price and can be used to revaluate the inventory for the period to be closed. You can use this actual price as the standard price for the next period.

Actual costing determines what portion of the variance is to be debited to the next-highest level using material consumption. The actual bill of materials enables variances to be rolled up over multiple production levels all the way to the finished product. You can choose to have cost center variances also taken into account. 

This category of tips describes how multiple valuations and actual costing work, and the material ledger period-end closing process. It also describes the implementation steps needed during production startup. The actual cost component split and deactivating the material ledger are also explained. 

Keep reading: Things You Should Know About Controlling with SAP 2nd Ed

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