SlideShare a Scribd company logo
Orange County Convention Center
Orlando, Florida | June 3-5, 2014
FICO	
  Integra,on	
  with	
  Logis,cs:	
  Process	
  Flows,	
  
Accoun,ng	
  and	
  Valua,on	
  Simplified	
  
Speaker	
  Name:	
  Saugata	
  Ghosh,	
  PwC	
  
1.  Logistics Process Flows
2.  FICO Integrations
3.  Enhanced understanding of Accounting and Valuation
LEARNING	
  POINTS	
  
Agenda	
  
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary & Periodic Valuation
Recap and Q&A
Agenda	
  
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary & Periodic Valuation
Recap and Q&A
Make	
  To	
  Stock	
  Scenario	
  -­‐	
  Overview	
  ProcureToPayProduction
PlanningOrderToCash
Purchase
Requisition
(Raw
Materials)
Prod.
Order
Issue
Raw
Material
External
Activity
Finished
Goods
Produced
Over
head
Variance
Calculation
Prod.
Order
Settlement
Planned
Order
(Finished
Goods)
Goods
Receipt
(Raw
Material)
Invoice
Receipt
Outgoing
Payment
(Vendor)
Purchase
Order
Incoming
Payment
(Customer)
Internal
Activity
Billing
Delivery
PGI
Planned
Ind.
Req.
Sales
Order
Period End Process
Accounting Impact
Operation Confirmations
•  ‘Strategy Group’ in Material Master determines the scenario
Make	
  To	
  Order	
  Scenario	
  -­‐	
  Overview	
  ProcureToPay
Sales Order/
Customer
Requirement
Production
PlanningOrderToCash
Purchase
Requisition
(Raw
Material)
Prod.
Order
Issue
Raw
Material
External
Activity
Finished
Goods
Produced
Over
head
Variance
Calculation
Prod.
Order
Settlement
Planned
Order
(Finished
Goods)
Goods
Receipt
(Raw
Material)
Invoice
Receipt
Outgoing
Payment
(Vendor)
Purchase
Order
Internal
Activity
Billing
Delivery
PGI
Incoming
Payment
(Customer)
Sales
Order
Settlement
Period End Process
Accounting Impact
Operation Confirmations
•  ‘Strategy Group’ in Material Master determines the scenario
Agenda	
  
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary & Periodic Valuation
Recap and Q&A
Key	
  Business	
  Processes	
  
Procure To Pay
Procurement of Stock Item
(Inventory)
Procurement of Non
Stock Item
Procurement of Services
Cross-Company
Procurement
Subcontracting
Stock Transfer
(Intra and Inter-Company)
Production Make To Stock Make To Order
Order To Cash
Scenarios where
Sales Order is NOT Cost
Object
Scenarios where
Sales Order is Cost
Object
Cross-Company
Sales
Third Party Sales Free of Charge/ Samples Consignment
Account	
  Determina,ons	
  -­‐	
  Quick	
  Recap	
  
LimitedPerceivedValueofFinancial
Planning
Sales & Use Tax Accounts
LimitedPerceivedValueofFinancial
Planning
Revenue Accounts
LimitedPerceivedValueofFinancial
Planning
Finance Process Accounts
LimitedPerceivedValueofFinancial
Planning
Material Accounts
SAP Provided Parameters
§  Chart of Accounts
§  Debit/ Credit
§  Transaction Keys for differentiation by Tax Types (e.g. MWS
output tax)
§  Tax Code (Linked with Country/ Tax Procedure)
SAP Provided Parameters
§  Chart of Accounts
§  Debit/ Credit
§  Transaction Keys for differentiation by transactions.
§  Account Modifier for differentiation of the ‘offsetting entry for
inventory posting’ based on Movement Types
§  Valuation Class for differentiation by group of Materials
§  Valuation Modifier for further differentiation by Plants
Commonly Used Parameters
§  Chart of Accounts
§  Sales Organization
§  Acct Assignment Group of Materials
§  Acct Assignment Group of Customers
§  Account Key linked with Pricing Conditions
§  Sales Order as Cost Object vs. Sales Order not Cost Object
SAP Provided Parameters
§  Chart of Accounts
§  Debit/ Credit
§  Transaction Keys for differentiation by transactions (e.g.
Cash discounts received, Cash discount allowed, Bank
charges, etc.)
Procurement	
  of	
  Stock	
  Item	
  ProcureToPay
1.
Purchase
Requisition
(Raw
Material)
3.
Goods
Receipt
4.
Invoice
Receipt
5.
Outgoing
Payment
(Vendor)
2.
Purchase
Order
Accounting Documents $
FI Dr. Inventory-RM (BSX)
Cr. GR/IR Clg. (WRX)
Cr. Freight Clg.(FR1)
110
100
10
CO NA
Accounting Documents $
FI Dr. GR/IR Clg. (WRX)
Dr. Freight Clg.(FR1)
Dr. Price Diff (PRD)
Cr. AP (Vendor)
100
10
15
125
CO Dr. Price Diff 125
Accounting Documents $
FI Dr. AP (Vendor)
Cr. Bank Clearing
Cr. Discount Received
125
120
5
CO Cr. Discount Received 5
•  Key Decision: Whether to implement ‘GR-based IV’ for ensuring 3-way Match as recommended for control.
•  For Goods Receipt, if Material is valued at Standard Price, the difference with PO Price goes to Price Difference.
•  For Invoice Receipt, if Material is valued at Moving Average Price, the difference between PO Price and Invoice is
posted to Inventory to the extent inventory is available in stock. Else, the difference is posted to Price Difference.
Scenarios
§  Procurement of inventory items
§  Example: MAP, Purchase Order = $100, Freight = $10, Vendor sends invoice for $125, Early payment discount = $5
Procurement	
  of	
  Non	
  Stock	
  Item	
  ProcureToPay
1.
Purchase
Requisition
(Consumable)
3.
Goods
Receipt
4.
Invoice
Receipt
5.
Outgoing
Payment
(Vendor)
2.
Purchase
Order
Accounting Documents $
FI Dr. Consumption (From Purch.Order)
Cr. GR/IR Clg. (WRX)
100
100
CO Dr. Consumption (From Purch.Order) 100
Accounting Documents $
FI Dr. GR/IR Clg. (WRX)
Dr. Consumption
Cr. AP (Vendor)
100
25
125
CO Dr. Consumption 25
Accounting Documents $
FI Dr. AP (Vendor)
Cr. Bank Clearing
Cr. Discount Received
125
120
5
CO Cr. Discount Received 5
•  Account-assignments for Purchase Orders. (K - Cost Center, F - Order, P - Project/ WBS, C - Sales Order)
•  Key Decision: What Account-assignment meets your business requirements
•  Key Decision: Whether to implement ‘GR-based IV’ for ensuring 3-way Match as recommended for control.
•  For Invoice Receipt, the difference between PO Price and Invoice Price is posted to same Consumption account.
Scenarios
§  Procurement of direct charge material items like consumables, stationeries, etc.
§  Example: Purchase Order = $100, Vendor sends invoice for $125, Early payment discount = $5
Procurement	
  of	
  Services	
  ProcureToPay
1.
Purchase
Requisition
(Services)
3.
Service
Entry
Sheet
4.
Invoice
Receipt
5.
Outgoing
Payment
(Vendor)
2.
Purchase
Order
Accounting Documents $
FI Dr. Expense (Acct Assn. in PO)
Cr. GR/IR Clg. (WRX)
100
100
CO Dr. Expense (Cost Object in PO) 100
Accounting Documents $
FI Dr. GR/IR Clg. (WRX)
Dr. Expense
Cr. AP (Vendor)
100
25
125
CO Dr./ Cr. Expense 25
Accounting Documents $
FI Dr. AP (Vendor)
Cr. Bank Clearing
Cr. Discount Received
125
120
5
CO Cr. Discount Received 5
•  Key Decision: Use of Service master is optional but advantageous. As an alternate use ‘Text’ in Purchase Order
•  Key Decision: Whether to implement ‘Service Entry Sheet’ for ensuring 3-way Match as recommended control.
•  For Invoice Receipt, the difference between PO Price and Invoice Price is posted to same Expense account.
Scenarios
§  Procurement of services like Professional fees, Audit Fees, etc.
§  Example: Purchase Order = $100, Vendor sends invoice for $125, Early payment discount = $5
* Optional
Procurement	
  -­‐	
  Cross-­‐company	
  Purchase	
  Procuring
Company
1.
Purchase
Requisition
(Raw
Material)
4.
Invoice
Receipt
5.
Outgoing
Payment
(Vendor)
2.
Purchase
Order
Accounting Documents
FI Dr. Inventory (BSX)
Cr. GR/IR Clg. (WRX)
Accounting Documents
(Cross-Company Doc.)
FI Dr. AR (I/C Customer)
Cr. AP (Vendor)
Accounting Documents
FI Dr. AP (Vendor)
Cr. Bank Clearing
Receiving
Company
3.
Goods
Receipt
Accounting Documents
(Cross-Company Doc.)
FI Dr. GR/IR Clg. (WRX)
Cr. AP (I/C Vendor)
Scenarios
§  Centralized procurement
§  Inventory PO where ‘Receiving’ Plant belongs to another Company.
§  Account assigned PO where assigned object (Asset/ Cost Center/ Order/ Project/ etc.) belongs to another Company.
Example of Inventory PO:
Subcontrac,ng	
  ProcureToPay
1.
Subcontracting
Purchase Order
3.
Goods Receipt
Finished Goods
From Vendor
(543)
4.
Invoice
Receipt
(For
Charges)
5.
Outgoing
Payment
(Vendor)
Accounting Documents $
FI Dr. Inventory-FG (BSX)
Cr. COGM-FG (BSV)
Dr. Consumption-RM (GBB-VBO)
Cr. Inventory-RM (BSX)
Dr. Subcont. Charges (FRL)
Cr. GR/IR Clearing (WRX)
130
130
100
100
25
25
CO Cr. COGM-FG
Dr. Consumption-RM
Dr. Subcont. Charges
130
100
25
Accounting Documents $
FI Dr. GR/IR Clg. (WRX)
Cr. AP (Vendor)
25
25
CO
Accounting Documents $
FI Dr. AP (Vendor)
Cr. Bank Clearing
25
25
CO
2.
Goods Issue
RM/ Components
To Vendor
(541)
Scenarios
§  Purchase Order: Components sent to vendor, who performs manufacturing/ assembling and sends back finished
goods. Bill of Material can be used in Purchase Order.
§  Manufacturing Order with Subcontracting Activity: Operations being performed by subcontracting vendor.
Example of Subcontracting Purchase Order:
§  Moving Average Price of RM = $100, Standard Price of FG = $130, Subcontracting Charges = $25
Stock	
  Transfer:	
  Intra-­‐Company	
  	
  
Accounting Document $
FI Dr. Inventory (Receiving Plant)
Cr. Inventory (Sending Plant)
Dr. Price Difference*
1,200
1,250
50
* Only If receiving plant valuates with Std. Price
Same financial impact
Stock
Transfer
Transfer
Posting
(301)
Option 1: w/o STPO – 1 Step Process
Stock
Transfer
Option 2: w/o STPO – 2 Step Process
Transfer
Posting
(303)
Transfer
Posting
(305)
Stock
Transfer
Option 3: With STPO w/o Delivery
Goods
Issue
(351)
Goods
Receipt
(101)
Stock
Transfer
Purchase Order
Stock
Transfer
Option 4: With STPO with Delivery
Delivery/
PGI
(641)
Goods
Receipt
(101)
Stock
Transfer
Purchase Order
Factors To Consider:
•  Physical proximity of the
Plants.
•  Legal and taxation
requirements
•  Need for control at the point
of Issue as well as Receipts
•  Segregation of duties
•  Automation
•  Volume
Example: Plant 1000 (MAP = $1250) transfers material ABC to Plant 2000 (Standard price = 1200)
Stock	
  Transfer:	
  Inter-­‐Company	
  	
  
Receiver
1. Stock
Transfer
Purchase Order
Sender
2. Delivery/
PGI
(641)
3. Goods
Receipt
(101)
4. InterCo.
Billing
(Type IV)
5. Invoice
Receipt
Accounting Documents
FI Dr. COGS
Cr. Inventory
Accounting Documents
FI Dr. AR (I/C Customer)
Cr. I/C Sales
Cr. Output Tax
Accounting Documents
FI Dr. Inventory
Cr. GR/IR Clg
Accounting Documents
FI Dr. GR/IR Clg
Dr. Input Tax
Cr. AP (I/C Vendor)
Scenario: STPO with Delivery
Before Enhancement Pack 5
Stock	
  Transfer:	
  Inter-­‐Company	
  	
  
Sender Receiver
Sender’s
Stock
Sender’s
In- Transit Stock
Receiver’s
Stock
1. STPO with
Delivery Type NCC2
2. STPO with
Delivery Type NCC3
3. STPO with
Delivery Type NCCR
Sender’s
Stock
Sender’s
In- Transit Stock
Receiver’s
Stock
Sender’s
Stock
Receiver’s
In- Transit Stock
Receiver’s
Stock
Receiver’s
In- Transit Stock
Outbound
Delivery
Transfer of Ownership-
On Arrival at a Port
Proof of Delivery
OR Goods Receipt
Scenario: STPO with Delivery
Enhancement Pack 5 - New options with preconfigured Delivery Types for SIT
Manufacturing	
  Order	
  Production
Planning
Accounting Documents $
FI Dr. Consumption-RM (GBB-VBR)
Cr. Inventory-RM (BSX)
800
800
CO Dr. Consumption-RM (Prod.Order) 800
Accounting Documents $
FI
CO Dr. Labor (Prod.Order)
Cr. Labor (Home Cost Ctr.)
1000
1000
Accounting Documents $
FI Dr. Inventory-FG (BSX)
Cr. COGM-FG (GBB-AUF)
1500
1500
CO Cr. COGM-FG (Prod.Order) 1500
2.
Production
/ Process
Order
3.
Issue
Raw
Material
5.
External
Activity
6.
Finished
Goods
Produced
7.
Overhead
8.
Variance
Calculation
9.
Production
Order
Settlement
1.
Planned
Order
(Finished
Goods)
4.
Internal
Activity
Accounting Documents $
FI Dr. Ext. Labor (From PO)
Cr. GR/IR (WRX)
200
200
CO Dr. Ext. Labor (Prod.Order) 200
Accounting Documents $
FI
CO Dr Overhead (Prod.Order)
Cr Overhead (Cost Center)
400
400
Accounting Documents $
FI Dr. Price Diff. (PRD)
Cr. COGM-FG
100
100
CO Dr. Price Diff. (Prof.Seg)
Cr. COGM-FG (Prod.Order)
100
100
Example with Product Cost By Order
Debits: RM Cost $800, Internal Activity $1000, External Activity $200, Overhead $400
Credit: FG standard price $1500
Procure
ToPay
5a.
Purchase
Requisition
5b.
Purchase
Order
5c.
Goods
Receipt
Period End Processes
Operation Confirmations
Order	
  To	
  Cash	
  -­‐	
  Simple	
  Sales	
  Order	
  OrderToCash
1.
Sales
Order
3.
Billing
4.
Incoming
Payment
(Customer)
2.
Delivery/
PGI
Accounting Documents $
FI Dr. COGS-FG (GBB-VAX)
Cr. Inventory-FG (BSX)
150
150
AB-COPA Dr. COGS-FG 150
CB-COPA
Accounting Documents $
FI Dr. AR (Customer)
Cr. Sales
Cr. Output Tax
220
200
20
AB-COPA Cr. Sales 200
CB-COPA Sales
COGS
200
150
Accounting Documents $
FI Dr. Bank Clearing
Dr. Discount
Cr. AR (Customer)
215
5
220
Scenarios
§  Sale of Make To Stock Items
§  Sale of Make To Order Items (Optional)
Example: Sale Price = $200, Tax = $20, Cost of Goods Sold = $150, Early Payment Discount = $5
•  Item Category in SO determines Requirement Type/ Requirement Class which in turn determines whether SO is Cost Object.
•  Costing-based COPA: COGS and Revenue both flow at the time of Billing
•  Account-based COPA: COGS flow with PGI and Revenue flows with Billing.
•  COGS – Not created as Cost Element. Differentiation based on Account Modifier VAX.
Order	
  To	
  Cash	
  -­‐	
  Sales	
  Order	
  as	
  Cost	
  Object	
  OrderToCash
1.
Sales
Order
3.
Billing
4.
Incoming
Payment
(Customer)
2.
Delivery/
PGI
Accounting Documents $
FI Dr. COGS-FG (GBB-VAY)
Cr. Inventory-FG (BSX)
150
150
AB-COPA COGS 150
CB-COPA
Accounting Documents $
FI Dr. AR (Customer)
Cr. Sales
Cr. Output Tax
220
200
20
AB-COPA Sales 200
CB-COPA
Scenarios
§  Sale of Make To Order Items
§  To be used when business requirement is to track all order fulfillment related expenses and revenue.
Example: Sale Price = $200, Tax = $20, Cost of Goods Sold = $150
•  Item Category in SO determines Requirement Type/ Requirement Class which in turn determines whether SO is Cost Object.
•  Costing-based COPA: COGS and Revenue both flow at the time of Sales Order Settlement
•  Account-based COPA: COGS flow with PGI and Revenue flows with Billing (Same as SO as not Cost Object)
•  COGS – Created as Cost Element so that COGS flows to Sales Order. Differentiation based on Account Modifier VAY.
5.
Sales Order
Settlement
Accounting Documents $
FI
AB-COPA
CB-COPA Sales
COGS
200
150
Order	
  To	
  Cash	
  -­‐	
  Cross	
  Company	
  Sales	
  Selling
Company
1.
Sales
Order
3.
Customer
Billing
(F2)
6.
Outgoing
Payment
(I/C Vendor)
Accounting Documents
FI Dr. COGS (GBB-VAX)
Cr. Inventory-FG (BSX)
Accounting Documents
FI Dr. AR (Customer)
Cr. Sales
Cr. Output Tax
Accounting Documents
FI Dr. AP (I/C Vendor)
Cr. Bank Clearing
Delivering
Company
2.
Delivery
/PGI
Accounting Documents
FI Dr. AR (I/C Customer)
Cr. I/C Sales
Cr. Output Tax
Dr. I/C COGS (optional)
Cr. COGS (optional)
Scenario
§  Drop-Ship: Order booked by one Company but Delivery Plant belongs to another Company
4.
InterCo.
Billing
(IV)
5.
InterCo.
AP Invoice
Accounting Documents
FI Dr. COGS
Dr. Input Tax
Cr. AP (I/C Vendor)
7.
Incoming
Payment
(I/C
Customer)
Accounting Documents
FI Cr. AR (I/C Customer)
Dr. Bank Clearing
* iDoc
•  Sales Order: Standard Item Category = TAS
•  Purchase Requisition/ Order: Account Assignment Category = 1 - Third Party, Item Category = S - Third Party
Order	
  To	
  Cash	
  -­‐	
  Third	
  Party	
  Sales	
  ProcureTo
Pay
2.
Purchase
Requisition
(Acct
Assigned)
4.
Goods
Receipt
(101)
Accounting Documents
FI Dr. COGS
Cr. GR/IR Clg.
Accounting Documents
FI Dr. AR (Customer)
Cr. Sales
Cr. Output Tax
Accounting Documents
FI	
   Dr. Bank Clearing
Cr. AR (Customer)
OrderToCash
1.
Sales
Order
5
Billing
8.
Incoming
Payment
(Customer)
3.
Purchase
Order
(Acct
Assigned)
6.
Invoice
Receipt
7.
Outgoing
Payment
(Vendor)
Accounting Documents
FI Dr. GR/IR Clg.
Dr. Input Tax
Cr. AP (Vendor)
Accounting Documents
FI Dr. AP (Vendor)
Cr. Bank Clearing
Cr. Discount Received
Scenario:
Direct delivery from vendor Plant
Order	
  To	
  Cash	
  -­‐	
  Free	
  of	
  Charge/	
  Samples	
  
OrderToCash
Sales
Order
Delivery/
PGI
Scenario-1: No Customer Billing (Separate Order Type/ Item Category)
OrderToCash
Sales
Order BillingDelivery/
PGI
Accounting Documents $
FI Dr. COGS
Cr. Inventory-FG
150
150
Accounting Documents $
FI Dr. Sales Deduction
Cr. Sales
Cr. Output Tax
170
150
20
Scenario-2: Customer Billing with 100% Discount (Separate Item Category/ Pricing Procedure)
Accounting Documents $
FI Dr. COGS
Cr. Inventory-FG
150
150
Consignment	
  Sales	
  (Books	
  of	
  Consignor)	
  
Scenario: Consignor selling goods through Consignment Agent (Consignee customer)
Process Flow/ Sales Order Types:
§  Consignment Fill-Up: For moving unrestricted-use stock to Consignee’s stock (special stock ‘W’). Ownership remains with Consignor.
§  Consignment Issue: When Consignee sells the consignment stock (special stock) to a third party. Relevant for Billing.
§  Consignment Return: When Consignee receives return of goods from third party. Relevant for Credit Memo.
§  Consignment Pick-Up: For returning goods from consignment Consignee’s stock (special stock ‘W’) to unrestricted-use stock.
OrderToCash
1a.
Consignment
Fill Up
Accounting Documents
FI Dr. COGS
Cr. Inventory
1b.
Delivery/ PGI
(631W)
2a.
Consignment
Issue
2b.
Delivery/ PGI
(633W)
2c.
Billing
(Invoice)
Accounting Documents
FI Dr. Customer
Cr. Sales
Cr. Output Tax
4a.
Consignment
Pick Up
4b.
Delivery/ PGI
(632W)
Accounting Documents
FI	
   Cr. COGS
Dr. Inventory
3a.
Consignment
Returns
3b.
Delivery/ PGI
(634W)
3c.
Billing
(Credit Memo)
Accounting Documents
FI Cr. Customer
Dr. Sales
Dr. Output Tax
Consignment	
  Purchase	
  (Books	
  of	
  Consignee)	
  
Accounting Documents
FI Dr. Inventory (BSX)
Cr. Payable-Consignment (KON)
Dr./Cr. Gain/ Loss*
* (Std. Price ~ Consignment Price)
Accounting Documents
FI Dr. Payable-Consignment
Cr. AP (Vendor)
ProcureToPay
1.
Scheduling
Agreement
(Item
Category ‘K’)
3.
Transfer to
Unrestricted
Stock
MIGO_TR (411K)
5.
Invoice Receipt
MRKO
(Consignment
Settlement)
2.
Goods
Receipts
MIGO
(101K)
6.
Outgoing
Payment
(Vendor)
Accounting Documents
FI Dr. AP (Vendor)
Cr. Bank Clearing
Scenario: Consignee selling goods for Consignor
Agenda	
  
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary & Periodic Valuation
Recap and Q&A
Price Control
§  Price Control indicator in material master determines the valuation – MAP (V) or Standard Price (S)
Moving Average Price (V)
§  Represents weighted average price (= Total Value/ Quantity)
§  Price gets updated with each Goods Receipts
§  Recommended for externally procured materials.
Standard Price (S)
§  Price is determined and updated periodically, either manually or using Material Cost Estimate (Cost Roll Up)
§  Recommended for in-house produced products
§  Variant Configured materials should be valuated using Sales Order Cost Estimate, as there is no Material Cost Estimate
§  Must for Material Ledger/ Actual Costing
Split Valuation
§  Can be used to valuate sub-stocks of same material in different ways.
§  Example - externally procured vs. in-house produced, duty-paid vs. duty free, by quality, by batch.
§  Parent material is always maintained in MAP
Preliminary	
  (Real-­‐,me)	
  Valua,on	
  
Material Cost Estimate (Cost Roll Up)
§  In-house produced materials are valuated using Standard Price
§  Standard Price is calculated based on master data like BOM, Routing, Costing Sheet
§  Price gets updated in material master; Revaluation gain/ loss posted in accounting
Manual Price Change (MR21)
§  For updating Price in material master periodically.
§  Commonly used for Materials with price control indicator 'V’
§  Can be used for ‘S’ Materials if Standard Cost Estimate has not been released yet
§  Revaluation difference (gain/ loss) is posted in accounting
Actual Costing with Material Ledger
§  Preliminary valuation for all goods movements is performed with Standard Price and
Price Variances are maintained in the Material Ledger.
§  At the period end, closing inventory is revaluated with the determined ‘Actual Price’ or
the periodic unit price
§  ‘Actual Price’ can be used for statistical purposes as well without Accounting (optional)
FIFO & LIFO
§  Available for month-end inventory valuation adjustment reports.
§  Material is valuated in moving average price for daily purpose
Periodic	
  Revalua,on	
  
Accounting Documents
FI Dr./ Cr. Revaluation Diff. (MM: UMB)
Cr./ Dr. Inventory-FG (MM: BSX)
Accounting Documents
FI Dr./ Cr. Revaluation Diff. (MM: UMB)
Cr./ Dr. Inventory-RM (MM: BSX)
Accounting Documents
FI	
   Dr./ Cr. Price Diff. (OBYC: PRY)
Cr./ Dr. Inventory (MM: BSX)
Material	
  Cost	
  Es,mate	
  (Cost	
  Roll	
  Up)	
  CostingRun
Costing Data
•  Costing Variant
•  Costing Version
•  Controlling Area
•  Company Code
•  Transfer Control
•  Costing Date From
•  Costing Dare To
•  Qty Structure Date
•  Valuation Date
•  Valuation Variant
•  Costing Sheet
6.
Release
1.
Selection
2.
Structure
Explosion
3.
Costing
4.
Analysis
5.
Marking
Accounting Documents $
FI Cr. Revaluation Diff. (UMB)
Dr. Inventory
80,000
80,000
CO Cr. Revaluation Diff. 80,000
Current price in Material master gets updated…
BOM Routing
Quantity StructureQuantity Structure Value StructureValue Structure
•  Prices for Materials
•  Prices for Internal Activities
•  Prices for External Activities
•  Overhead from Costing Sheets
•  Prices from Processes
Material ABC:
Total Stock: 1000 Pcs
Total Value: $800,000
Price: $800/ Pc
New Cost Estimate
suggests $880/ Pc
Material ABC:
Total Stock: 1000 Pcs
Total Value: $880,000
Price: $880/ Pc
Example:
Work	
  In	
  Progress	
  (WIP)	
  
Scenario: WIP represents goods in production that have not yet been completed at the end of an accounting
period.
Material: XYZ
Material Cost 800
Activity Cost 1,200
Overhead 400
---------------------------------------------------
Total 2,400
Production Confirmed (1,000)
---------------------------------------------------
WIP 1,400
COGM – FG $1,000RM Consumption $800
Overhead $400
Activity Allocation $1,200
WIP $1400
Month-end
Accounting Documents $
FI Dr. WIP (B/S)
Cr. WIP Offset (P&L)
1,400
1,400
CO NA
Manufacturing Order
•  Status of the manufacturing orders controls postings. PREL/ REL –> Calculate, DLV/CNF/ TECO –> Cancel
•  Valuation is carried out based on net ‘Actual Cost’ using the formula:
= ∑ (Debits on account of Material, Activity, Overhead, etc) - ∑ (Credits on account of settled cost i.e. COGM)
•  If the result is in positive, it represents ‘Stock in Process’ (FI entry is Dr. WIP Stock, Cr. WIP Offset)
•  If the result is negative, it implies ‘Reserve for Unrealized Cost’ (FI entry is Dr. WIP Offset, Cr. WIP Stock)
•  WIP Offset account should not be created as Cost Element
Physical	
  Inventory	
  Count	
  &	
  Adjustment	
  PhysicalCount
7.
Post
Difference
(MI07, MI37)
1.
Create PI
Documents
(MI01, MI31)
3.
Execute
Count
(Manual)
4.
Enter
Count
(MI04,
MI34)
5.
List Count
Differences
(MI20)
Accounting Documents $
FI Cr. Physical Inv. Diff. (GBB-INV)
Dr. Inventory (BSX)
80,000
80,000
CO Cr. Physical Inv. Diff. (Cost Ctr.) 80,000
6.
Recount
(MI11)
2.
Print PI
Documents
(MI21)
Material ABC:
Total Stock: 1000 Pcs
Total Value: $800,000
Price: $800/ Pc
Sock count suggests
1100 units
Material ABC:
Total Stock: 1100 Pcs
Total Value: $880,000
Price: $800/ Pc
Example:
Scenario: Physical inventory count is carried out at periodic intervals to ensure accuracy in financial books. This
may also be mandated by accounting or taxation rules to place an accurate value on the inventory.
Agenda	
  
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary & Periodic Valuation
Recap and Q&A
1.  Key Process Flows for P2P, Production and OTC
2.  FICO Integrations with step-by-step Accounting
3.  Account Determinations for correct Accounting
4.  Preliminary and Periodic valuation methods for accurate Amounts
5.  Design Options
KEY	
  LEARNINGS	
  
This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
© 2014 PricewaterhouseCoopers LLP.All rights reserved. PwC refers to the United States member firm, and may sometimes refer to the PwC network. Each member
firm is a separate legal entity. Please see www.pwc.com/structure for further details.
FOLLOW	
  US	
  
THANK	
  YOU	
  
THANK	
  YOU	
  FOR	
  PARTICIPATING	
  
	
  
Please	
  provide	
  feedback	
  on	
  this	
  session	
  by	
  compleAng	
  
a	
  short	
  survey	
  via	
  the	
  event	
  mobile	
  applicaAon.	
  
	
  
SESSION	
  CODE:	
  1511	
  
	
  
For	
  ongoing	
  educa,on	
  on	
  this	
  area	
  of	
  focus,	
  
visit	
  www.ASUG.com	
  

More Related Content

What's hot

Case study material ledger implementation lessons learned
Case study  material ledger implementation lessons learnedCase study  material ledger implementation lessons learned
Case study material ledger implementation lessons learned
Johannes Le Roux
 
Procure to pay ppt
Procure to pay pptProcure to pay ppt
Procure to pay ppt
tiffanymaetua
 
Document splitting-in-new-general-ledger
Document splitting-in-new-general-ledgerDocument splitting-in-new-general-ledger
Document splitting-in-new-general-ledger
Rajeev Kumar
 
Accounting entries in sap
Accounting entries in sapAccounting entries in sap
Accounting entries in sap
Rajeev Kumar
 
Period end closing activites in sap fico
Period end closing activites in sap ficoPeriod end closing activites in sap fico
Period end closing activites in sap fico
Hari Krishna
 
SAP Innovations:Are you overlooking important functionality in SAP Controlling
SAP Innovations:Are you overlooking important functionality in SAP ControllingSAP Innovations:Are you overlooking important functionality in SAP Controlling
SAP Innovations:Are you overlooking important functionality in SAP Controlling
Alice Adams
 
162 erp605 process_overview_en_in
162 erp605 process_overview_en_in162 erp605 process_overview_en_in
162 erp605 process_overview_en_in
Nageswararao Kuchipudi
 
Oracle R12 AR Enhancement Overview
Oracle R12 AR Enhancement OverviewOracle R12 AR Enhancement Overview
Oracle R12 AR Enhancement Overview
Sanjay Challagundla
 
Oracle EBS P2P 101
Oracle EBS P2P 101Oracle EBS P2P 101
Oracle EBS P2P 101
Ajay Tankhiwale
 
Breakin’ Up is Hard to Do: Complexities of Separating Data in an ERP Environment
Breakin’ Up is Hard to Do: Complexities of Separating Data in an ERP EnvironmentBreakin’ Up is Hard to Do: Complexities of Separating Data in an ERP Environment
Breakin’ Up is Hard to Do: Complexities of Separating Data in an ERP Environment
eprentise
 
Commitment management in sap
Commitment management in sapCommitment management in sap
Commitment management in sap
Rajesh Shanbhag
 
Multiperiod Accounting in Oracle EBS R12
Multiperiod Accounting in Oracle EBS R12Multiperiod Accounting in Oracle EBS R12
Multiperiod Accounting in Oracle EBS R12
Prithis Das, PMP, OCS ☁️
 
Asset Revaluation or Impairment - Understanding the Accounting for Fixed Asse...
Asset Revaluation or Impairment - Understanding the Accounting for Fixed Asse...Asset Revaluation or Impairment - Understanding the Accounting for Fixed Asse...
Asset Revaluation or Impairment - Understanding the Accounting for Fixed Asse...
eprentise
 
80467542 asset-closing-in-sap-fico
80467542 asset-closing-in-sap-fico80467542 asset-closing-in-sap-fico
80467542 asset-closing-in-sap-fico
Srinivas Y
 
New gl documentsplitting_guidebook
New gl documentsplitting_guidebookNew gl documentsplitting_guidebook
New gl documentsplitting_guidebook
Prashant Aiwale
 
Period end closure document r 12
Period end closure document r 12Period end closure document r 12
Period end closure document r 12
kurmalak
 
What is intercompany reconciliations
What is intercompany reconciliationsWhat is intercompany reconciliations
What is intercompany reconciliations
samuthra Thilak
 
Going From Public to Private - The Oracle E-Business Suite Challenges
Going From Public to Private - The Oracle E-Business Suite ChallengesGoing From Public to Private - The Oracle E-Business Suite Challenges
Going From Public to Private - The Oracle E-Business Suite Challenges
eprentise
 
The Search for the Single Source of Truth - Eliminating a Multi-Instance Envi...
The Search for the Single Source of Truth - Eliminating a Multi-Instance Envi...The Search for the Single Source of Truth - Eliminating a Multi-Instance Envi...
The Search for the Single Source of Truth - Eliminating a Multi-Instance Envi...
eprentise
 
Asset Revaluation or Impairment – Understanding Release 12 Fixed Assets Options
Asset Revaluation or Impairment – Understanding Release 12 Fixed Assets OptionsAsset Revaluation or Impairment – Understanding Release 12 Fixed Assets Options
Asset Revaluation or Impairment – Understanding Release 12 Fixed Assets Options
eprentise
 

What's hot (20)

Case study material ledger implementation lessons learned
Case study  material ledger implementation lessons learnedCase study  material ledger implementation lessons learned
Case study material ledger implementation lessons learned
 
Procure to pay ppt
Procure to pay pptProcure to pay ppt
Procure to pay ppt
 
Document splitting-in-new-general-ledger
Document splitting-in-new-general-ledgerDocument splitting-in-new-general-ledger
Document splitting-in-new-general-ledger
 
Accounting entries in sap
Accounting entries in sapAccounting entries in sap
Accounting entries in sap
 
Period end closing activites in sap fico
Period end closing activites in sap ficoPeriod end closing activites in sap fico
Period end closing activites in sap fico
 
SAP Innovations:Are you overlooking important functionality in SAP Controlling
SAP Innovations:Are you overlooking important functionality in SAP ControllingSAP Innovations:Are you overlooking important functionality in SAP Controlling
SAP Innovations:Are you overlooking important functionality in SAP Controlling
 
162 erp605 process_overview_en_in
162 erp605 process_overview_en_in162 erp605 process_overview_en_in
162 erp605 process_overview_en_in
 
Oracle R12 AR Enhancement Overview
Oracle R12 AR Enhancement OverviewOracle R12 AR Enhancement Overview
Oracle R12 AR Enhancement Overview
 
Oracle EBS P2P 101
Oracle EBS P2P 101Oracle EBS P2P 101
Oracle EBS P2P 101
 
Breakin’ Up is Hard to Do: Complexities of Separating Data in an ERP Environment
Breakin’ Up is Hard to Do: Complexities of Separating Data in an ERP EnvironmentBreakin’ Up is Hard to Do: Complexities of Separating Data in an ERP Environment
Breakin’ Up is Hard to Do: Complexities of Separating Data in an ERP Environment
 
Commitment management in sap
Commitment management in sapCommitment management in sap
Commitment management in sap
 
Multiperiod Accounting in Oracle EBS R12
Multiperiod Accounting in Oracle EBS R12Multiperiod Accounting in Oracle EBS R12
Multiperiod Accounting in Oracle EBS R12
 
Asset Revaluation or Impairment - Understanding the Accounting for Fixed Asse...
Asset Revaluation or Impairment - Understanding the Accounting for Fixed Asse...Asset Revaluation or Impairment - Understanding the Accounting for Fixed Asse...
Asset Revaluation or Impairment - Understanding the Accounting for Fixed Asse...
 
80467542 asset-closing-in-sap-fico
80467542 asset-closing-in-sap-fico80467542 asset-closing-in-sap-fico
80467542 asset-closing-in-sap-fico
 
New gl documentsplitting_guidebook
New gl documentsplitting_guidebookNew gl documentsplitting_guidebook
New gl documentsplitting_guidebook
 
Period end closure document r 12
Period end closure document r 12Period end closure document r 12
Period end closure document r 12
 
What is intercompany reconciliations
What is intercompany reconciliationsWhat is intercompany reconciliations
What is intercompany reconciliations
 
Going From Public to Private - The Oracle E-Business Suite Challenges
Going From Public to Private - The Oracle E-Business Suite ChallengesGoing From Public to Private - The Oracle E-Business Suite Challenges
Going From Public to Private - The Oracle E-Business Suite Challenges
 
The Search for the Single Source of Truth - Eliminating a Multi-Instance Envi...
The Search for the Single Source of Truth - Eliminating a Multi-Instance Envi...The Search for the Single Source of Truth - Eliminating a Multi-Instance Envi...
The Search for the Single Source of Truth - Eliminating a Multi-Instance Envi...
 
Asset Revaluation or Impairment – Understanding Release 12 Fixed Assets Options
Asset Revaluation or Impairment – Understanding Release 12 Fixed Assets OptionsAsset Revaluation or Impairment – Understanding Release 12 Fixed Assets Options
Asset Revaluation or Impairment – Understanding Release 12 Fixed Assets Options
 

Viewers also liked

無料追補版#2「ペーパープロトタイピング原論」
無料追補版#2「ペーパープロトタイピング原論」無料追補版#2「ペーパープロトタイピング原論」
無料追補版#2「ペーパープロトタイピング原論」
Tarumoto Tetsuya
 
UX/ユーザビリティのためのテスト - ユーザーテスト見学会 at JaSST
UX/ユーザビリティのためのテスト - ユーザーテスト見学会 at JaSSTUX/ユーザビリティのためのテスト - ユーザーテスト見学会 at JaSST
UX/ユーザビリティのためのテスト - ユーザーテスト見学会 at JaSST
Tarumoto Tetsuya
 
Detial process description inter company stock transfer
Detial process description inter company stock transferDetial process description inter company stock transfer
Detial process description inter company stock transfer
Muhammad Zafar Firoz
 
作ってみよう! ジャーニーマップ - PO祭り2016
作ってみよう! ジャーニーマップ - PO祭り2016作ってみよう! ジャーニーマップ - PO祭り2016
作ってみよう! ジャーニーマップ - PO祭り2016
Tarumoto Tetsuya
 
Procurement in Business
Procurement in BusinessProcurement in Business
Procurement in Business
Tom Matys
 
SAP General Ledger_Sample Project Plan
SAP General Ledger_Sample Project PlanSAP General Ledger_Sample Project Plan
SAP General Ledger_Sample Project Plan
Saugata Ghosh
 
Dpr105 databases
Dpr105 databasesDpr105 databases
Dpr105 databases
Tom Matys
 
Emerging technologies
Emerging technologiesEmerging technologies
Emerging technologies
Tom Matys
 
Partner with SAP to Develop Mobile apps and capture the Mobile Market Opportu...
Partner with SAP to Develop Mobile apps and capture the Mobile Market Opportu...Partner with SAP to Develop Mobile apps and capture the Mobile Market Opportu...
Partner with SAP to Develop Mobile apps and capture the Mobile Market Opportu...
SAP PartnerEdge program for Application Development
 
Production Supply with SAP EWM
Production Supply with SAP EWMProduction Supply with SAP EWM
Production Supply with SAP EWM
Victor Cerullo
 
EWM Yard Management
EWM Yard ManagementEWM Yard Management
EWM Yard Management
andyiska
 
New gimax
New gimaxNew gimax
New gimax
Jorge Longoria
 
HTW2011: Branko Milutinovic - Social gaming - lessons learned
HTW2011: Branko Milutinovic - Social gaming - lessons learnedHTW2011: Branko Milutinovic - Social gaming - lessons learned
HTW2011: Branko Milutinovic - Social gaming - lessons learned
How to Web
 
La Escucha Activa
La Escucha ActivaLa Escucha Activa
La Escucha Activa
Mónica Vera
 
Brochure Ideográfica Ads Media
Brochure Ideográfica Ads MediaBrochure Ideográfica Ads Media
Brochure Ideográfica Ads Media
Ideográfica Ads Media
 
MANEJO INICIAL EN POLITRAUMATIZADOS MIC HORACE NEGRETTE
MANEJO INICIAL EN POLITRAUMATIZADOS MIC HORACE NEGRETTEMANEJO INICIAL EN POLITRAUMATIZADOS MIC HORACE NEGRETTE
MANEJO INICIAL EN POLITRAUMATIZADOS MIC HORACE NEGRETTE
Horace Negrette
 
Boletín Informativo PSOE de Villarrobledo, Mayo 2015
Boletín Informativo PSOE de Villarrobledo, Mayo 2015Boletín Informativo PSOE de Villarrobledo, Mayo 2015
Boletín Informativo PSOE de Villarrobledo, Mayo 2015
Libre Pensador
 
Pdm organizativo inst.
Pdm   organizativo inst.Pdm   organizativo inst.
Pdm organizativo inst.
Richard Suárez Velarde
 
wicked problems 20-may-14_rev-rkg
wicked problems 20-may-14_rev-rkgwicked problems 20-may-14_rev-rkg
wicked problems 20-may-14_rev-rkg
Bob Garrett
 
Performance audit handbook
Performance audit handbookPerformance audit handbook
Performance audit handbook
Golden Saragih
 

Viewers also liked (20)

無料追補版#2「ペーパープロトタイピング原論」
無料追補版#2「ペーパープロトタイピング原論」無料追補版#2「ペーパープロトタイピング原論」
無料追補版#2「ペーパープロトタイピング原論」
 
UX/ユーザビリティのためのテスト - ユーザーテスト見学会 at JaSST
UX/ユーザビリティのためのテスト - ユーザーテスト見学会 at JaSSTUX/ユーザビリティのためのテスト - ユーザーテスト見学会 at JaSST
UX/ユーザビリティのためのテスト - ユーザーテスト見学会 at JaSST
 
Detial process description inter company stock transfer
Detial process description inter company stock transferDetial process description inter company stock transfer
Detial process description inter company stock transfer
 
作ってみよう! ジャーニーマップ - PO祭り2016
作ってみよう! ジャーニーマップ - PO祭り2016作ってみよう! ジャーニーマップ - PO祭り2016
作ってみよう! ジャーニーマップ - PO祭り2016
 
Procurement in Business
Procurement in BusinessProcurement in Business
Procurement in Business
 
SAP General Ledger_Sample Project Plan
SAP General Ledger_Sample Project PlanSAP General Ledger_Sample Project Plan
SAP General Ledger_Sample Project Plan
 
Dpr105 databases
Dpr105 databasesDpr105 databases
Dpr105 databases
 
Emerging technologies
Emerging technologiesEmerging technologies
Emerging technologies
 
Partner with SAP to Develop Mobile apps and capture the Mobile Market Opportu...
Partner with SAP to Develop Mobile apps and capture the Mobile Market Opportu...Partner with SAP to Develop Mobile apps and capture the Mobile Market Opportu...
Partner with SAP to Develop Mobile apps and capture the Mobile Market Opportu...
 
Production Supply with SAP EWM
Production Supply with SAP EWMProduction Supply with SAP EWM
Production Supply with SAP EWM
 
EWM Yard Management
EWM Yard ManagementEWM Yard Management
EWM Yard Management
 
New gimax
New gimaxNew gimax
New gimax
 
HTW2011: Branko Milutinovic - Social gaming - lessons learned
HTW2011: Branko Milutinovic - Social gaming - lessons learnedHTW2011: Branko Milutinovic - Social gaming - lessons learned
HTW2011: Branko Milutinovic - Social gaming - lessons learned
 
La Escucha Activa
La Escucha ActivaLa Escucha Activa
La Escucha Activa
 
Brochure Ideográfica Ads Media
Brochure Ideográfica Ads MediaBrochure Ideográfica Ads Media
Brochure Ideográfica Ads Media
 
MANEJO INICIAL EN POLITRAUMATIZADOS MIC HORACE NEGRETTE
MANEJO INICIAL EN POLITRAUMATIZADOS MIC HORACE NEGRETTEMANEJO INICIAL EN POLITRAUMATIZADOS MIC HORACE NEGRETTE
MANEJO INICIAL EN POLITRAUMATIZADOS MIC HORACE NEGRETTE
 
Boletín Informativo PSOE de Villarrobledo, Mayo 2015
Boletín Informativo PSOE de Villarrobledo, Mayo 2015Boletín Informativo PSOE de Villarrobledo, Mayo 2015
Boletín Informativo PSOE de Villarrobledo, Mayo 2015
 
Pdm organizativo inst.
Pdm   organizativo inst.Pdm   organizativo inst.
Pdm organizativo inst.
 
wicked problems 20-may-14_rev-rkg
wicked problems 20-may-14_rev-rkgwicked problems 20-may-14_rev-rkg
wicked problems 20-may-14_rev-rkg
 
Performance audit handbook
Performance audit handbookPerformance audit handbook
Performance audit handbook
 

Similar to 1511_ASUG_FICO_Integration_w_Logistics_June2014

Purchasing 11i.5.10 Training
Purchasing 11i.5.10 TrainingPurchasing 11i.5.10 Training
Purchasing 11i.5.10 Training
Dharmalingam Kandampalayam Shanmugam
 
Account Payable
Account PayableAccount Payable
Account Payable
Ankur Rastogi
 
Lecture 4b: Basic Functions/Activities/ Procedures II
Lecture 4b: Basic Functions/Activities/ Procedures IILecture 4b: Basic Functions/Activities/ Procedures II
Lecture 4b: Basic Functions/Activities/ Procedures II
KC Tan
 
SAP Overview Details
SAP Overview DetailsSAP Overview Details
Ap[1](buy to pay)
Ap[1](buy to pay)Ap[1](buy to pay)
Ap[1](buy to pay)
gauravmohan31
 
Advance Supply Chain Management : Holistic Overview with respect to an ERP an...
Advance Supply Chain Management : Holistic Overview with respect to an ERP an...Advance Supply Chain Management : Holistic Overview with respect to an ERP an...
Advance Supply Chain Management : Holistic Overview with respect to an ERP an...
Rahul Guhathakurta
 
Oracle Application Differences & Drop Ship Sales Orders
Oracle Application Differences & Drop Ship Sales OrdersOracle Application Differences & Drop Ship Sales Orders
Oracle Application Differences & Drop Ship Sales Orders
iWare Logic Technologies Pvt. Ltd.
 
1. Suppose a firm decides to minimize its holdings of current asse.docx
1. Suppose a firm decides to minimize its holdings of current asse.docx1. Suppose a firm decides to minimize its holdings of current asse.docx
1. Suppose a firm decides to minimize its holdings of current asse.docx
jackiewalcutt
 
AGS Support Live: SAP Business One Procure to Pay Refresher Training
AGS Support Live: SAP Business One Procure to Pay Refresher TrainingAGS Support Live: SAP Business One Procure to Pay Refresher Training
AGS Support Live: SAP Business One Procure to Pay Refresher Training
AGSanePLDTCompany
 
Ais Romney 2006 Slides 11 The Expenditure Cycle
Ais Romney 2006 Slides 11 The Expenditure CycleAis Romney 2006 Slides 11 The Expenditure Cycle
Ais Romney 2006 Slides 11 The Expenditure Cycle
Sharing Slides Training
 
Collaborative SIG - PO To Receive
Collaborative SIG - PO To ReceiveCollaborative SIG - PO To Receive
Collaborative SIG - PO To Receive
kthanki
 
Fiap
FiapFiap
Accounting Information System (AIS) Analysis
Accounting Information System (AIS) AnalysisAccounting Information System (AIS) Analysis
Accounting Information System (AIS) Analysis
Rachel Wilcox-Miano
 
E Procurement
E ProcurementE Procurement
E Procurement
ahmad bassiouny
 
Bab4
Bab4Bab4
STOCK AND BOOK DEBT AUDIT.pptx
STOCK AND BOOK DEBT AUDIT.pptxSTOCK AND BOOK DEBT AUDIT.pptx
STOCK AND BOOK DEBT AUDIT.pptx
CAVEDPRAKASHPALIWAL
 
STOCK AND BOOK DEBT AUDIT.pptx
STOCK AND BOOK DEBT AUDIT.pptxSTOCK AND BOOK DEBT AUDIT.pptx
STOCK AND BOOK DEBT AUDIT.pptx
CAVEDPRAKASHPALIWAL
 
Acl
AclAcl
Cause10 presentation on e procurement einvoice 11 9-10
Cause10 presentation on e procurement einvoice 11 9-10Cause10 presentation on e procurement einvoice 11 9-10
Cause10 presentation on e procurement einvoice 11 9-10
UNC Charlotte
 
juh
juhjuh

Similar to 1511_ASUG_FICO_Integration_w_Logistics_June2014 (20)

Purchasing 11i.5.10 Training
Purchasing 11i.5.10 TrainingPurchasing 11i.5.10 Training
Purchasing 11i.5.10 Training
 
Account Payable
Account PayableAccount Payable
Account Payable
 
Lecture 4b: Basic Functions/Activities/ Procedures II
Lecture 4b: Basic Functions/Activities/ Procedures IILecture 4b: Basic Functions/Activities/ Procedures II
Lecture 4b: Basic Functions/Activities/ Procedures II
 
SAP Overview Details
SAP Overview DetailsSAP Overview Details
SAP Overview Details
 
Ap[1](buy to pay)
Ap[1](buy to pay)Ap[1](buy to pay)
Ap[1](buy to pay)
 
Advance Supply Chain Management : Holistic Overview with respect to an ERP an...
Advance Supply Chain Management : Holistic Overview with respect to an ERP an...Advance Supply Chain Management : Holistic Overview with respect to an ERP an...
Advance Supply Chain Management : Holistic Overview with respect to an ERP an...
 
Oracle Application Differences & Drop Ship Sales Orders
Oracle Application Differences & Drop Ship Sales OrdersOracle Application Differences & Drop Ship Sales Orders
Oracle Application Differences & Drop Ship Sales Orders
 
1. Suppose a firm decides to minimize its holdings of current asse.docx
1. Suppose a firm decides to minimize its holdings of current asse.docx1. Suppose a firm decides to minimize its holdings of current asse.docx
1. Suppose a firm decides to minimize its holdings of current asse.docx
 
AGS Support Live: SAP Business One Procure to Pay Refresher Training
AGS Support Live: SAP Business One Procure to Pay Refresher TrainingAGS Support Live: SAP Business One Procure to Pay Refresher Training
AGS Support Live: SAP Business One Procure to Pay Refresher Training
 
Ais Romney 2006 Slides 11 The Expenditure Cycle
Ais Romney 2006 Slides 11 The Expenditure CycleAis Romney 2006 Slides 11 The Expenditure Cycle
Ais Romney 2006 Slides 11 The Expenditure Cycle
 
Collaborative SIG - PO To Receive
Collaborative SIG - PO To ReceiveCollaborative SIG - PO To Receive
Collaborative SIG - PO To Receive
 
Fiap
FiapFiap
Fiap
 
Accounting Information System (AIS) Analysis
Accounting Information System (AIS) AnalysisAccounting Information System (AIS) Analysis
Accounting Information System (AIS) Analysis
 
E Procurement
E ProcurementE Procurement
E Procurement
 
Bab4
Bab4Bab4
Bab4
 
STOCK AND BOOK DEBT AUDIT.pptx
STOCK AND BOOK DEBT AUDIT.pptxSTOCK AND BOOK DEBT AUDIT.pptx
STOCK AND BOOK DEBT AUDIT.pptx
 
STOCK AND BOOK DEBT AUDIT.pptx
STOCK AND BOOK DEBT AUDIT.pptxSTOCK AND BOOK DEBT AUDIT.pptx
STOCK AND BOOK DEBT AUDIT.pptx
 
Acl
AclAcl
Acl
 
Cause10 presentation on e procurement einvoice 11 9-10
Cause10 presentation on e procurement einvoice 11 9-10Cause10 presentation on e procurement einvoice 11 9-10
Cause10 presentation on e procurement einvoice 11 9-10
 
juh
juhjuh
juh
 

1511_ASUG_FICO_Integration_w_Logistics_June2014

  • 1. Orange County Convention Center Orlando, Florida | June 3-5, 2014 FICO  Integra,on  with  Logis,cs:  Process  Flows,   Accoun,ng  and  Valua,on  Simplified   Speaker  Name:  Saugata  Ghosh,  PwC  
  • 2. 1.  Logistics Process Flows 2.  FICO Integrations 3.  Enhanced understanding of Accounting and Valuation LEARNING  POINTS  
  • 3. Agenda   End-to-End Scenario Overview Key Process Flows with Accounting Preliminary & Periodic Valuation Recap and Q&A
  • 4. Agenda   End-to-End Scenario Overview Key Process Flows with Accounting Preliminary & Periodic Valuation Recap and Q&A
  • 5. Make  To  Stock  Scenario  -­‐  Overview  ProcureToPayProduction PlanningOrderToCash Purchase Requisition (Raw Materials) Prod. Order Issue Raw Material External Activity Finished Goods Produced Over head Variance Calculation Prod. Order Settlement Planned Order (Finished Goods) Goods Receipt (Raw Material) Invoice Receipt Outgoing Payment (Vendor) Purchase Order Incoming Payment (Customer) Internal Activity Billing Delivery PGI Planned Ind. Req. Sales Order Period End Process Accounting Impact Operation Confirmations •  ‘Strategy Group’ in Material Master determines the scenario
  • 6. Make  To  Order  Scenario  -­‐  Overview  ProcureToPay Sales Order/ Customer Requirement Production PlanningOrderToCash Purchase Requisition (Raw Material) Prod. Order Issue Raw Material External Activity Finished Goods Produced Over head Variance Calculation Prod. Order Settlement Planned Order (Finished Goods) Goods Receipt (Raw Material) Invoice Receipt Outgoing Payment (Vendor) Purchase Order Internal Activity Billing Delivery PGI Incoming Payment (Customer) Sales Order Settlement Period End Process Accounting Impact Operation Confirmations •  ‘Strategy Group’ in Material Master determines the scenario
  • 7. Agenda   End-to-End Scenario Overview Key Process Flows with Accounting Preliminary & Periodic Valuation Recap and Q&A
  • 8. Key  Business  Processes   Procure To Pay Procurement of Stock Item (Inventory) Procurement of Non Stock Item Procurement of Services Cross-Company Procurement Subcontracting Stock Transfer (Intra and Inter-Company) Production Make To Stock Make To Order Order To Cash Scenarios where Sales Order is NOT Cost Object Scenarios where Sales Order is Cost Object Cross-Company Sales Third Party Sales Free of Charge/ Samples Consignment
  • 9. Account  Determina,ons  -­‐  Quick  Recap   LimitedPerceivedValueofFinancial Planning Sales & Use Tax Accounts LimitedPerceivedValueofFinancial Planning Revenue Accounts LimitedPerceivedValueofFinancial Planning Finance Process Accounts LimitedPerceivedValueofFinancial Planning Material Accounts SAP Provided Parameters §  Chart of Accounts §  Debit/ Credit §  Transaction Keys for differentiation by Tax Types (e.g. MWS output tax) §  Tax Code (Linked with Country/ Tax Procedure) SAP Provided Parameters §  Chart of Accounts §  Debit/ Credit §  Transaction Keys for differentiation by transactions. §  Account Modifier for differentiation of the ‘offsetting entry for inventory posting’ based on Movement Types §  Valuation Class for differentiation by group of Materials §  Valuation Modifier for further differentiation by Plants Commonly Used Parameters §  Chart of Accounts §  Sales Organization §  Acct Assignment Group of Materials §  Acct Assignment Group of Customers §  Account Key linked with Pricing Conditions §  Sales Order as Cost Object vs. Sales Order not Cost Object SAP Provided Parameters §  Chart of Accounts §  Debit/ Credit §  Transaction Keys for differentiation by transactions (e.g. Cash discounts received, Cash discount allowed, Bank charges, etc.)
  • 10. Procurement  of  Stock  Item  ProcureToPay 1. Purchase Requisition (Raw Material) 3. Goods Receipt 4. Invoice Receipt 5. Outgoing Payment (Vendor) 2. Purchase Order Accounting Documents $ FI Dr. Inventory-RM (BSX) Cr. GR/IR Clg. (WRX) Cr. Freight Clg.(FR1) 110 100 10 CO NA Accounting Documents $ FI Dr. GR/IR Clg. (WRX) Dr. Freight Clg.(FR1) Dr. Price Diff (PRD) Cr. AP (Vendor) 100 10 15 125 CO Dr. Price Diff 125 Accounting Documents $ FI Dr. AP (Vendor) Cr. Bank Clearing Cr. Discount Received 125 120 5 CO Cr. Discount Received 5 •  Key Decision: Whether to implement ‘GR-based IV’ for ensuring 3-way Match as recommended for control. •  For Goods Receipt, if Material is valued at Standard Price, the difference with PO Price goes to Price Difference. •  For Invoice Receipt, if Material is valued at Moving Average Price, the difference between PO Price and Invoice is posted to Inventory to the extent inventory is available in stock. Else, the difference is posted to Price Difference. Scenarios §  Procurement of inventory items §  Example: MAP, Purchase Order = $100, Freight = $10, Vendor sends invoice for $125, Early payment discount = $5
  • 11. Procurement  of  Non  Stock  Item  ProcureToPay 1. Purchase Requisition (Consumable) 3. Goods Receipt 4. Invoice Receipt 5. Outgoing Payment (Vendor) 2. Purchase Order Accounting Documents $ FI Dr. Consumption (From Purch.Order) Cr. GR/IR Clg. (WRX) 100 100 CO Dr. Consumption (From Purch.Order) 100 Accounting Documents $ FI Dr. GR/IR Clg. (WRX) Dr. Consumption Cr. AP (Vendor) 100 25 125 CO Dr. Consumption 25 Accounting Documents $ FI Dr. AP (Vendor) Cr. Bank Clearing Cr. Discount Received 125 120 5 CO Cr. Discount Received 5 •  Account-assignments for Purchase Orders. (K - Cost Center, F - Order, P - Project/ WBS, C - Sales Order) •  Key Decision: What Account-assignment meets your business requirements •  Key Decision: Whether to implement ‘GR-based IV’ for ensuring 3-way Match as recommended for control. •  For Invoice Receipt, the difference between PO Price and Invoice Price is posted to same Consumption account. Scenarios §  Procurement of direct charge material items like consumables, stationeries, etc. §  Example: Purchase Order = $100, Vendor sends invoice for $125, Early payment discount = $5
  • 12. Procurement  of  Services  ProcureToPay 1. Purchase Requisition (Services) 3. Service Entry Sheet 4. Invoice Receipt 5. Outgoing Payment (Vendor) 2. Purchase Order Accounting Documents $ FI Dr. Expense (Acct Assn. in PO) Cr. GR/IR Clg. (WRX) 100 100 CO Dr. Expense (Cost Object in PO) 100 Accounting Documents $ FI Dr. GR/IR Clg. (WRX) Dr. Expense Cr. AP (Vendor) 100 25 125 CO Dr./ Cr. Expense 25 Accounting Documents $ FI Dr. AP (Vendor) Cr. Bank Clearing Cr. Discount Received 125 120 5 CO Cr. Discount Received 5 •  Key Decision: Use of Service master is optional but advantageous. As an alternate use ‘Text’ in Purchase Order •  Key Decision: Whether to implement ‘Service Entry Sheet’ for ensuring 3-way Match as recommended control. •  For Invoice Receipt, the difference between PO Price and Invoice Price is posted to same Expense account. Scenarios §  Procurement of services like Professional fees, Audit Fees, etc. §  Example: Purchase Order = $100, Vendor sends invoice for $125, Early payment discount = $5 * Optional
  • 13. Procurement  -­‐  Cross-­‐company  Purchase  Procuring Company 1. Purchase Requisition (Raw Material) 4. Invoice Receipt 5. Outgoing Payment (Vendor) 2. Purchase Order Accounting Documents FI Dr. Inventory (BSX) Cr. GR/IR Clg. (WRX) Accounting Documents (Cross-Company Doc.) FI Dr. AR (I/C Customer) Cr. AP (Vendor) Accounting Documents FI Dr. AP (Vendor) Cr. Bank Clearing Receiving Company 3. Goods Receipt Accounting Documents (Cross-Company Doc.) FI Dr. GR/IR Clg. (WRX) Cr. AP (I/C Vendor) Scenarios §  Centralized procurement §  Inventory PO where ‘Receiving’ Plant belongs to another Company. §  Account assigned PO where assigned object (Asset/ Cost Center/ Order/ Project/ etc.) belongs to another Company. Example of Inventory PO:
  • 14. Subcontrac,ng  ProcureToPay 1. Subcontracting Purchase Order 3. Goods Receipt Finished Goods From Vendor (543) 4. Invoice Receipt (For Charges) 5. Outgoing Payment (Vendor) Accounting Documents $ FI Dr. Inventory-FG (BSX) Cr. COGM-FG (BSV) Dr. Consumption-RM (GBB-VBO) Cr. Inventory-RM (BSX) Dr. Subcont. Charges (FRL) Cr. GR/IR Clearing (WRX) 130 130 100 100 25 25 CO Cr. COGM-FG Dr. Consumption-RM Dr. Subcont. Charges 130 100 25 Accounting Documents $ FI Dr. GR/IR Clg. (WRX) Cr. AP (Vendor) 25 25 CO Accounting Documents $ FI Dr. AP (Vendor) Cr. Bank Clearing 25 25 CO 2. Goods Issue RM/ Components To Vendor (541) Scenarios §  Purchase Order: Components sent to vendor, who performs manufacturing/ assembling and sends back finished goods. Bill of Material can be used in Purchase Order. §  Manufacturing Order with Subcontracting Activity: Operations being performed by subcontracting vendor. Example of Subcontracting Purchase Order: §  Moving Average Price of RM = $100, Standard Price of FG = $130, Subcontracting Charges = $25
  • 15. Stock  Transfer:  Intra-­‐Company     Accounting Document $ FI Dr. Inventory (Receiving Plant) Cr. Inventory (Sending Plant) Dr. Price Difference* 1,200 1,250 50 * Only If receiving plant valuates with Std. Price Same financial impact Stock Transfer Transfer Posting (301) Option 1: w/o STPO – 1 Step Process Stock Transfer Option 2: w/o STPO – 2 Step Process Transfer Posting (303) Transfer Posting (305) Stock Transfer Option 3: With STPO w/o Delivery Goods Issue (351) Goods Receipt (101) Stock Transfer Purchase Order Stock Transfer Option 4: With STPO with Delivery Delivery/ PGI (641) Goods Receipt (101) Stock Transfer Purchase Order Factors To Consider: •  Physical proximity of the Plants. •  Legal and taxation requirements •  Need for control at the point of Issue as well as Receipts •  Segregation of duties •  Automation •  Volume Example: Plant 1000 (MAP = $1250) transfers material ABC to Plant 2000 (Standard price = 1200)
  • 16. Stock  Transfer:  Inter-­‐Company     Receiver 1. Stock Transfer Purchase Order Sender 2. Delivery/ PGI (641) 3. Goods Receipt (101) 4. InterCo. Billing (Type IV) 5. Invoice Receipt Accounting Documents FI Dr. COGS Cr. Inventory Accounting Documents FI Dr. AR (I/C Customer) Cr. I/C Sales Cr. Output Tax Accounting Documents FI Dr. Inventory Cr. GR/IR Clg Accounting Documents FI Dr. GR/IR Clg Dr. Input Tax Cr. AP (I/C Vendor) Scenario: STPO with Delivery Before Enhancement Pack 5
  • 17. Stock  Transfer:  Inter-­‐Company     Sender Receiver Sender’s Stock Sender’s In- Transit Stock Receiver’s Stock 1. STPO with Delivery Type NCC2 2. STPO with Delivery Type NCC3 3. STPO with Delivery Type NCCR Sender’s Stock Sender’s In- Transit Stock Receiver’s Stock Sender’s Stock Receiver’s In- Transit Stock Receiver’s Stock Receiver’s In- Transit Stock Outbound Delivery Transfer of Ownership- On Arrival at a Port Proof of Delivery OR Goods Receipt Scenario: STPO with Delivery Enhancement Pack 5 - New options with preconfigured Delivery Types for SIT
  • 18. Manufacturing  Order  Production Planning Accounting Documents $ FI Dr. Consumption-RM (GBB-VBR) Cr. Inventory-RM (BSX) 800 800 CO Dr. Consumption-RM (Prod.Order) 800 Accounting Documents $ FI CO Dr. Labor (Prod.Order) Cr. Labor (Home Cost Ctr.) 1000 1000 Accounting Documents $ FI Dr. Inventory-FG (BSX) Cr. COGM-FG (GBB-AUF) 1500 1500 CO Cr. COGM-FG (Prod.Order) 1500 2. Production / Process Order 3. Issue Raw Material 5. External Activity 6. Finished Goods Produced 7. Overhead 8. Variance Calculation 9. Production Order Settlement 1. Planned Order (Finished Goods) 4. Internal Activity Accounting Documents $ FI Dr. Ext. Labor (From PO) Cr. GR/IR (WRX) 200 200 CO Dr. Ext. Labor (Prod.Order) 200 Accounting Documents $ FI CO Dr Overhead (Prod.Order) Cr Overhead (Cost Center) 400 400 Accounting Documents $ FI Dr. Price Diff. (PRD) Cr. COGM-FG 100 100 CO Dr. Price Diff. (Prof.Seg) Cr. COGM-FG (Prod.Order) 100 100 Example with Product Cost By Order Debits: RM Cost $800, Internal Activity $1000, External Activity $200, Overhead $400 Credit: FG standard price $1500 Procure ToPay 5a. Purchase Requisition 5b. Purchase Order 5c. Goods Receipt Period End Processes Operation Confirmations
  • 19. Order  To  Cash  -­‐  Simple  Sales  Order  OrderToCash 1. Sales Order 3. Billing 4. Incoming Payment (Customer) 2. Delivery/ PGI Accounting Documents $ FI Dr. COGS-FG (GBB-VAX) Cr. Inventory-FG (BSX) 150 150 AB-COPA Dr. COGS-FG 150 CB-COPA Accounting Documents $ FI Dr. AR (Customer) Cr. Sales Cr. Output Tax 220 200 20 AB-COPA Cr. Sales 200 CB-COPA Sales COGS 200 150 Accounting Documents $ FI Dr. Bank Clearing Dr. Discount Cr. AR (Customer) 215 5 220 Scenarios §  Sale of Make To Stock Items §  Sale of Make To Order Items (Optional) Example: Sale Price = $200, Tax = $20, Cost of Goods Sold = $150, Early Payment Discount = $5 •  Item Category in SO determines Requirement Type/ Requirement Class which in turn determines whether SO is Cost Object. •  Costing-based COPA: COGS and Revenue both flow at the time of Billing •  Account-based COPA: COGS flow with PGI and Revenue flows with Billing. •  COGS – Not created as Cost Element. Differentiation based on Account Modifier VAX.
  • 20. Order  To  Cash  -­‐  Sales  Order  as  Cost  Object  OrderToCash 1. Sales Order 3. Billing 4. Incoming Payment (Customer) 2. Delivery/ PGI Accounting Documents $ FI Dr. COGS-FG (GBB-VAY) Cr. Inventory-FG (BSX) 150 150 AB-COPA COGS 150 CB-COPA Accounting Documents $ FI Dr. AR (Customer) Cr. Sales Cr. Output Tax 220 200 20 AB-COPA Sales 200 CB-COPA Scenarios §  Sale of Make To Order Items §  To be used when business requirement is to track all order fulfillment related expenses and revenue. Example: Sale Price = $200, Tax = $20, Cost of Goods Sold = $150 •  Item Category in SO determines Requirement Type/ Requirement Class which in turn determines whether SO is Cost Object. •  Costing-based COPA: COGS and Revenue both flow at the time of Sales Order Settlement •  Account-based COPA: COGS flow with PGI and Revenue flows with Billing (Same as SO as not Cost Object) •  COGS – Created as Cost Element so that COGS flows to Sales Order. Differentiation based on Account Modifier VAY. 5. Sales Order Settlement Accounting Documents $ FI AB-COPA CB-COPA Sales COGS 200 150
  • 21. Order  To  Cash  -­‐  Cross  Company  Sales  Selling Company 1. Sales Order 3. Customer Billing (F2) 6. Outgoing Payment (I/C Vendor) Accounting Documents FI Dr. COGS (GBB-VAX) Cr. Inventory-FG (BSX) Accounting Documents FI Dr. AR (Customer) Cr. Sales Cr. Output Tax Accounting Documents FI Dr. AP (I/C Vendor) Cr. Bank Clearing Delivering Company 2. Delivery /PGI Accounting Documents FI Dr. AR (I/C Customer) Cr. I/C Sales Cr. Output Tax Dr. I/C COGS (optional) Cr. COGS (optional) Scenario §  Drop-Ship: Order booked by one Company but Delivery Plant belongs to another Company 4. InterCo. Billing (IV) 5. InterCo. AP Invoice Accounting Documents FI Dr. COGS Dr. Input Tax Cr. AP (I/C Vendor) 7. Incoming Payment (I/C Customer) Accounting Documents FI Cr. AR (I/C Customer) Dr. Bank Clearing * iDoc
  • 22. •  Sales Order: Standard Item Category = TAS •  Purchase Requisition/ Order: Account Assignment Category = 1 - Third Party, Item Category = S - Third Party Order  To  Cash  -­‐  Third  Party  Sales  ProcureTo Pay 2. Purchase Requisition (Acct Assigned) 4. Goods Receipt (101) Accounting Documents FI Dr. COGS Cr. GR/IR Clg. Accounting Documents FI Dr. AR (Customer) Cr. Sales Cr. Output Tax Accounting Documents FI   Dr. Bank Clearing Cr. AR (Customer) OrderToCash 1. Sales Order 5 Billing 8. Incoming Payment (Customer) 3. Purchase Order (Acct Assigned) 6. Invoice Receipt 7. Outgoing Payment (Vendor) Accounting Documents FI Dr. GR/IR Clg. Dr. Input Tax Cr. AP (Vendor) Accounting Documents FI Dr. AP (Vendor) Cr. Bank Clearing Cr. Discount Received Scenario: Direct delivery from vendor Plant
  • 23. Order  To  Cash  -­‐  Free  of  Charge/  Samples   OrderToCash Sales Order Delivery/ PGI Scenario-1: No Customer Billing (Separate Order Type/ Item Category) OrderToCash Sales Order BillingDelivery/ PGI Accounting Documents $ FI Dr. COGS Cr. Inventory-FG 150 150 Accounting Documents $ FI Dr. Sales Deduction Cr. Sales Cr. Output Tax 170 150 20 Scenario-2: Customer Billing with 100% Discount (Separate Item Category/ Pricing Procedure) Accounting Documents $ FI Dr. COGS Cr. Inventory-FG 150 150
  • 24. Consignment  Sales  (Books  of  Consignor)   Scenario: Consignor selling goods through Consignment Agent (Consignee customer) Process Flow/ Sales Order Types: §  Consignment Fill-Up: For moving unrestricted-use stock to Consignee’s stock (special stock ‘W’). Ownership remains with Consignor. §  Consignment Issue: When Consignee sells the consignment stock (special stock) to a third party. Relevant for Billing. §  Consignment Return: When Consignee receives return of goods from third party. Relevant for Credit Memo. §  Consignment Pick-Up: For returning goods from consignment Consignee’s stock (special stock ‘W’) to unrestricted-use stock. OrderToCash 1a. Consignment Fill Up Accounting Documents FI Dr. COGS Cr. Inventory 1b. Delivery/ PGI (631W) 2a. Consignment Issue 2b. Delivery/ PGI (633W) 2c. Billing (Invoice) Accounting Documents FI Dr. Customer Cr. Sales Cr. Output Tax 4a. Consignment Pick Up 4b. Delivery/ PGI (632W) Accounting Documents FI   Cr. COGS Dr. Inventory 3a. Consignment Returns 3b. Delivery/ PGI (634W) 3c. Billing (Credit Memo) Accounting Documents FI Cr. Customer Dr. Sales Dr. Output Tax
  • 25. Consignment  Purchase  (Books  of  Consignee)   Accounting Documents FI Dr. Inventory (BSX) Cr. Payable-Consignment (KON) Dr./Cr. Gain/ Loss* * (Std. Price ~ Consignment Price) Accounting Documents FI Dr. Payable-Consignment Cr. AP (Vendor) ProcureToPay 1. Scheduling Agreement (Item Category ‘K’) 3. Transfer to Unrestricted Stock MIGO_TR (411K) 5. Invoice Receipt MRKO (Consignment Settlement) 2. Goods Receipts MIGO (101K) 6. Outgoing Payment (Vendor) Accounting Documents FI Dr. AP (Vendor) Cr. Bank Clearing Scenario: Consignee selling goods for Consignor
  • 26. Agenda   End-to-End Scenario Overview Key Process Flows with Accounting Preliminary & Periodic Valuation Recap and Q&A
  • 27. Price Control §  Price Control indicator in material master determines the valuation – MAP (V) or Standard Price (S) Moving Average Price (V) §  Represents weighted average price (= Total Value/ Quantity) §  Price gets updated with each Goods Receipts §  Recommended for externally procured materials. Standard Price (S) §  Price is determined and updated periodically, either manually or using Material Cost Estimate (Cost Roll Up) §  Recommended for in-house produced products §  Variant Configured materials should be valuated using Sales Order Cost Estimate, as there is no Material Cost Estimate §  Must for Material Ledger/ Actual Costing Split Valuation §  Can be used to valuate sub-stocks of same material in different ways. §  Example - externally procured vs. in-house produced, duty-paid vs. duty free, by quality, by batch. §  Parent material is always maintained in MAP Preliminary  (Real-­‐,me)  Valua,on  
  • 28. Material Cost Estimate (Cost Roll Up) §  In-house produced materials are valuated using Standard Price §  Standard Price is calculated based on master data like BOM, Routing, Costing Sheet §  Price gets updated in material master; Revaluation gain/ loss posted in accounting Manual Price Change (MR21) §  For updating Price in material master periodically. §  Commonly used for Materials with price control indicator 'V’ §  Can be used for ‘S’ Materials if Standard Cost Estimate has not been released yet §  Revaluation difference (gain/ loss) is posted in accounting Actual Costing with Material Ledger §  Preliminary valuation for all goods movements is performed with Standard Price and Price Variances are maintained in the Material Ledger. §  At the period end, closing inventory is revaluated with the determined ‘Actual Price’ or the periodic unit price §  ‘Actual Price’ can be used for statistical purposes as well without Accounting (optional) FIFO & LIFO §  Available for month-end inventory valuation adjustment reports. §  Material is valuated in moving average price for daily purpose Periodic  Revalua,on   Accounting Documents FI Dr./ Cr. Revaluation Diff. (MM: UMB) Cr./ Dr. Inventory-FG (MM: BSX) Accounting Documents FI Dr./ Cr. Revaluation Diff. (MM: UMB) Cr./ Dr. Inventory-RM (MM: BSX) Accounting Documents FI   Dr./ Cr. Price Diff. (OBYC: PRY) Cr./ Dr. Inventory (MM: BSX)
  • 29. Material  Cost  Es,mate  (Cost  Roll  Up)  CostingRun Costing Data •  Costing Variant •  Costing Version •  Controlling Area •  Company Code •  Transfer Control •  Costing Date From •  Costing Dare To •  Qty Structure Date •  Valuation Date •  Valuation Variant •  Costing Sheet 6. Release 1. Selection 2. Structure Explosion 3. Costing 4. Analysis 5. Marking Accounting Documents $ FI Cr. Revaluation Diff. (UMB) Dr. Inventory 80,000 80,000 CO Cr. Revaluation Diff. 80,000 Current price in Material master gets updated… BOM Routing Quantity StructureQuantity Structure Value StructureValue Structure •  Prices for Materials •  Prices for Internal Activities •  Prices for External Activities •  Overhead from Costing Sheets •  Prices from Processes Material ABC: Total Stock: 1000 Pcs Total Value: $800,000 Price: $800/ Pc New Cost Estimate suggests $880/ Pc Material ABC: Total Stock: 1000 Pcs Total Value: $880,000 Price: $880/ Pc Example:
  • 30. Work  In  Progress  (WIP)   Scenario: WIP represents goods in production that have not yet been completed at the end of an accounting period. Material: XYZ Material Cost 800 Activity Cost 1,200 Overhead 400 --------------------------------------------------- Total 2,400 Production Confirmed (1,000) --------------------------------------------------- WIP 1,400 COGM – FG $1,000RM Consumption $800 Overhead $400 Activity Allocation $1,200 WIP $1400 Month-end Accounting Documents $ FI Dr. WIP (B/S) Cr. WIP Offset (P&L) 1,400 1,400 CO NA Manufacturing Order •  Status of the manufacturing orders controls postings. PREL/ REL –> Calculate, DLV/CNF/ TECO –> Cancel •  Valuation is carried out based on net ‘Actual Cost’ using the formula: = ∑ (Debits on account of Material, Activity, Overhead, etc) - ∑ (Credits on account of settled cost i.e. COGM) •  If the result is in positive, it represents ‘Stock in Process’ (FI entry is Dr. WIP Stock, Cr. WIP Offset) •  If the result is negative, it implies ‘Reserve for Unrealized Cost’ (FI entry is Dr. WIP Offset, Cr. WIP Stock) •  WIP Offset account should not be created as Cost Element
  • 31. Physical  Inventory  Count  &  Adjustment  PhysicalCount 7. Post Difference (MI07, MI37) 1. Create PI Documents (MI01, MI31) 3. Execute Count (Manual) 4. Enter Count (MI04, MI34) 5. List Count Differences (MI20) Accounting Documents $ FI Cr. Physical Inv. Diff. (GBB-INV) Dr. Inventory (BSX) 80,000 80,000 CO Cr. Physical Inv. Diff. (Cost Ctr.) 80,000 6. Recount (MI11) 2. Print PI Documents (MI21) Material ABC: Total Stock: 1000 Pcs Total Value: $800,000 Price: $800/ Pc Sock count suggests 1100 units Material ABC: Total Stock: 1100 Pcs Total Value: $880,000 Price: $800/ Pc Example: Scenario: Physical inventory count is carried out at periodic intervals to ensure accuracy in financial books. This may also be mandated by accounting or taxation rules to place an accurate value on the inventory.
  • 32. Agenda   End-to-End Scenario Overview Key Process Flows with Accounting Preliminary & Periodic Valuation Recap and Q&A
  • 33. 1.  Key Process Flows for P2P, Production and OTC 2.  FICO Integrations with step-by-step Accounting 3.  Account Determinations for correct Accounting 4.  Preliminary and Periodic valuation methods for accurate Amounts 5.  Design Options KEY  LEARNINGS  
  • 34. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. © 2014 PricewaterhouseCoopers LLP.All rights reserved. PwC refers to the United States member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.
  • 36. THANK  YOU   THANK  YOU  FOR  PARTICIPATING     Please  provide  feedback  on  this  session  by  compleAng   a  short  survey  via  the  event  mobile  applicaAon.     SESSION  CODE:  1511     For  ongoing  educa,on  on  this  area  of  focus,   visit  www.ASUG.com