Technical tips and tricks to get more out of your SAP ERP Financials transactions:
A Q&A with SAP PRESS author Paul Ovigele

Seeking quicker, easier ways to perform SAP ERP financials transactions, post accounts, display your reports, and monitor your G/L accounts?  Ask SAP financials expert, consultant, and author Paul Ovigele your questions on Thursday, July 28, from 12:30-1:30 pm EDT in the Insider Learning Network Financials forum.

Paul is author and technical advisor for Financials Expert and author of the forthcoming SAP PRESS book 100 Things You Should Know about Financial Accounting with SAP.

Join Paul here on Thursday, July 28 from 12:30-1:30 EDT and bring your specific questions about SAP ERP, FI, and tips for solving common SAP financials issues. 

If you are not yet an Insider Learning Network member, join today! 

Have a question now? To post an advance question, first log in to Insider Learning Network, and select the “Post Reply” button below. Then join the discussion here on Thursday, July 28, 12:30 pm -1:30 pm EDT.

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Welcome to today's forum

Paul will post his answers directly in the forum thread.

Jul 27, 2011 -- 10:58AM, Darya Fadeyeva wrote:

Paul,

I kindly ask you to answer following questions:

1. Do you know projects where calculation of actual costs per cost components across multiple company codes was realized? If yes, would you please describe how it was realized?

2. Would you please advice which pitfalls could the Group face during the realization of actual costs per cost components if the Group has companies in different countries, such as Russia, USA, Ukraine, Great Britain, Italy, Switzerland etc.?

3. Would you please advice which pitfalls could the Group face during the realization of different types of accounting (IFRS, management, local GAAP, tax) if the Group has companies in different countries, such as Russia, USA, Ukraine, Great Britain, Italy, Switzerland etc.?

Hi Darya,

To calculate actual costs per cost components across multiple company codes, you would need to implement a tool called material ledger. This will accomplish two objectives:

(1)    Firstly, it will allow you to record your inventory costs using multiple valuations (US GAAP, IFRS, etc) and in multiple currencies, and;

(2)    It will also allow you to revalue your inventory costs from standard to actual, based on the price and exchange rate differences that occurred during the month.

To set up the material ledger, you will need to set up the necessary configuration, including activating material ledger and the ‘actual cost component split’ (which you can find in the IMG menu under Controlling -> Product Cost Controlling -> Actual Costing/Material Ledger). You then need to run a ‘production startup’ program (Transaction CKMSTART) for your materials, purchase orders and purchase order history so that they are “material ledger compatible”. Also you need to change the Price determination of all materials from ‘Transaction-Based’ to ‘Single-Multilevel’ (Transaction CKMM). When you have set up material ledger, you then need to run the actual costing program every month (Transaction CKMLCP) to revalue the materials to actual cost and hence produce an actual cost component split.

A key area to watch out for when performing a multi-country implementation of material ledger is what currencies you have set up in FI for your company codes (transaction OB22). You need to make sure that these are the same currencies that are set up for material ledger (which you can do in transaction OMX2) otherwise material ledger and FI not be reconciled. Also you need to make sure that you have set up the relevant parallel currencies for your company codes (i.e. group currency, hard currency, etc) before you activate material ledger otherwise it will be very difficult to change this after the fact.

Actually, material ledger helps with the reporting of different accounting standards as you can record your inventory costs using up to 3 different valuation approaches. So basically you can have a legal valuation (e.g for local GAAP), profit center valuation (e.g. for management) and group valuation  (e.g. for IFRS) for the same material. Also, by using the “Alternative Valuation Run” you can calculate different actual activity rates based on parallel valuation methods (such as the different methods of depreciation by different accounting standards).

Jul 28, 2011 -- 12:22PM, Sydnie McConnell wrote:

What recommendations do you have around reporting for AR and AP, particularly aging?  I've seen custom ABAP reporting for aging, but are there good standard solutions in ECC?

Thanks!

Unfortunately, the AP and AR aging reports, although accurate, are not really user-friendly. This leads to many customers creating custom aging reports, but as you know when you create a custom program you stand the risk of not getting accurate data, or having issues during upgrades. I recommend a very simple but effective solution which involves setting the "Use Accessibility mode" indicator which you can find in your computer's control panel by clicking on the "SAP Configuration" icon.

Doing the above will make the standard aging reports user-friendly ALV reports!

Regarding the A/R and A/P reporting:

Do you have any recommendations to perform these tasks via BW ?

Are there any standard cubes and reports existing and how big is the effort to set this up ?