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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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Optimize Financial Performance Leveraging S/4 HANA EPM/BPC

JohannesBusinesses leverage Enterprise Performance Management (EPM) to improve profitability by bringing significant improvement in financial and operational insight. With EPM improved operability and reduction of the cost of ownership with direct integration into SAP, S/4HANA provides integrated analytics solutions.

We use expertise, experiences, best practices, and methodologies using pre-packaged content including starter kits and pre-configured applications.

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Hybrid Planning with BPC S/4HANA and SAP Analytics Cloud

Businesses have leveraged Business Planning and Consolidations (BPC) for a year now and are now challenged by working with several new products at the same time, including SAP Business Warehouse (SAP BW) 7.4/7.5, the Enterprise Performance Management (EPM) add-in, version 10.0 SP30 (frontend for standard SAP BPC), and SAP Analysis for Microsoft Office (frontend for embedded SAP BPC) and they need to decide if they need to go to BPC Embedded, Cloud or BPC S/4 HANA Standard.

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Fiscal Year Variants in SAP S/4HANA Asset Accounting

Many companies operate in multiple regions and countries and need to 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 to meet, such as when you need to use different fiscal year variants (FY variants) in the different valuation frameworks.

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Cost Component Views in SAP Product Costing

TomKingI'm writing a book on SAP Product Cost Planning and in the process getting a better understanding of the importance of cost component views in product cost estimates.

The cost component split and cost component views provide valuable insight into a cost estimate. Setting up cost components correctly in a cost component structure leads you to a multi-faceted understanding of a product cost within a single cost estimate. At the beginning of the implementation our priority was to develop standard costs and we ignored additional information we could have obtained with a better understanding of cost component views.

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Improve Performance of SAP Material Ledger Closing Cockpit

Ashish Sampat 2018 12 1If you experience long run-times during SAP Material Ledger close, this blog is for you. We explore how to expedite your SAP Material Ledger close.

Knowing how much your products cost is essential to determining actual profitability. Yet most decisions are based on the standard cost of your products since it is not easy to determine your actual costs. Actual costing by SAP Material Ledger bridges this gap. It provides you the ability to capture actual costs by tracking variances at the material level. Let's examine SAP Actual Costing.

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GR/IR (Goods Receipt / Invoice Receipt) Processing

GR/IRoss Christoph 2017R is the SAP process to perform the three-way matchpurchase order, material receipt, and vendor invoice.  You use a clearing account to record the offset of the goods receipt (GR) and invoice receipt (IR) postings.  Once fully processed, the postings in the clearing account balance. 

Learn more about GR/IR and other SAP FICO topics. Please visit our new SAP FICO Learning Center please click here.

Clearing is performed at the purchase order (PO) line item level based on quantity entered. Price variance and exchange rate variance are calculated.  You can write off small differences using transaction MR11.

Purchase Price Variance
This discussion assumes you are using standard price control (S)  for purchased materials. The quantity and amount on the GR and IR postings are important. You must have posted GR to record purchase price variance (PPV). There is no PPV posting for just IR. There can be additional variance postings on IR after GR is posted for differences between PO price and actual price paid.

When posting GR, the price variance is based on the PO price, unless IR has already been posted, then it is based on actual price paid. If IR has already been posted, the GR will be based on the IR up to the quantity of the IR, after that is will use the PO price again.

After all postings to a PO line item, the net PPV posted will be the difference between the actual price paid and the standard cost of the material.

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