FICO Integration with Logistics: Process Flows,
Accounting, and Valuation Simplified
Saugata Ghosh
PwC
Produced by Wellesley Information Services, LLC, publisher of SAPinsider. © 2016 Wellesley Information Services. All rights reserved.
In This Session
•
In this session, you will enhance your understanding around:
 Various logistics scenarios
 Step-by-step process flows
 FICO integrations
 Accounting and Valuation
Simple Finance (Add-on for Business Suite on HANA) or S/4HANA Finance simplifies the
underlying table structure. However, the business process flows remain unchanged.
1
What We’ll Cover
•
•
•
•
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary and Periodic Valuation
Wrap-Up
2
What We’ll Cover
•
•
•
•
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary and Periodic Valuation
Wrap-Up
3
Order To Cash
Make-to-Stock Scenario - Overview
Procure To Pay
Sales
Order
Production Planning
Purchase
Requisition
(Raw
Materials)
Purchase
Order
Goods
Receipt
(Raw
Material)
Invoice
Receipt
Delivery
PGI
Billing
Incoming
Payment
(Customer)
Variance
Calculation
Prod.
Order
Settlement
Outgoing
Payment
(Vendor)
Operation Confirmations
Planned
Ind.
Req.
•
Planned
Order
(Finished
Goods)
Prod.
Order
Issue
Raw
Material
“Strategy Group” in Material Master determines the scenario
Internal
Activity
External
Activity
Finished
Goods
Produced
Overhead
Period-End Process
Accounting Impact
4
Order To Cash
Purchase
Requisition
(Raw
Material)
Production Planning
Sales Order/
Customer
Requirement
Procure To Pay
Make-to-Order Scenario - Overview
Delivery
PGI
Purchase
Order
Goods
Receipt
(Raw
Material)
Invoice
Receipt
Billing
Incoming
Payment
(Customer)
Sales
Order
Settlement
Overhead
Variance
Calculation
Prod.
Order
Settlement
Outgoing
Payment
(Vendor)
Operation Confirmations
Planned
Order
(Finished
Goods)
•
Prod.
Order
Issue
Raw
Material
“Strategy Group” in Material Master determines the scenario
Internal
Activity
External
Activity
Finished
Goods
Produced
Period-End Process
Accounting Impact
5
What We’ll Cover
•
•
•
•
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary and Periodic Valuation
Wrap-Up
6
Key Business Processes
Procurement of Stock Item
(Inventory)
Procurement of Non-Stock
Item
Procurement of Services
Cross-Company Procurement
Subcontracting
Stock Transfer
(Intra- and Inter-Company)
Procure to Pay
Production
Make to Stock
Make to Order
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
Order to Cash
7
Account Determinations - Quick Recap
Sales and Use Tax Accounts
Limited Perceived Value of Financial Planning
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)
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
Finance Process Accounts
Limited Perceived Value of Financial Planning
Limited Perceived Value of Financial Planning
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
Revenue Accounts
Limited Perceived Value of Financial Planning
Material Accounts
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.)
8
Procurement of Stock Item
Procure To Pay
Scenarios
• Procurement of inventory items
• Example: MAP, Purchase Order = $100, Freight = $10, Vendor sends invoice for $125, Early payment discount = $5
Purchase
Requisition
(Raw Material)
Accounting Documents
FI
Dr. Inventory-RM (BSX)
Cr. GR/IR Clg. (WRX)
Cr. Freight Clg.(FR1)
CO
NA
Purchase
Order
$
110
100
10
Goods
Receipt
Accounting Documents
Invoice
Receipt
$
Outgoing
Payment
(Vendor)
Accounting Documents
$
FI
Dr. GR/IR Clg. (WRX)
Dr. Freight Clg.(FR1)
Dr. Price Diff (PRD)
Cr. AP (Vendor)
100
10
15
125
FI
Dr. AP (Vendor)
Cr. Bank Clearing
Cr. Discount Received
125
120
5
CO
Dr. Price Diff
125
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.
9
Procurement of Non-Stock Item
Procure To Pay
Scenarios
• Procurement of direct charge material items like consumables, stationeries, etc.
• Example: Purchase Order = $100, Vendor sends invoice for $125, Early payment discount = $5
Purchase
Requisition
(Consumable)
Purchase
Order
Accounting Documents
$
FI
Dr. Consumption (From Purch.Order)
Cr. GR/IR Clg. (WRX)
100
100
CO
Dr. Consumption (From Purch.Order)
100
•
•
•
•
Goods
Receipt
Accounting Documents
FI
Dr. GR/IR Clg. (WRX)
Dr. Consumption
Cr. AP (Vendor)
CO
Dr. Consumption
Invoice
Receipt
$
Outgoing
Payment
(Vendor)
Accounting Documents
$
100
25
125
FI
Dr. AP (Vendor)
Cr. Bank Clearing
Cr. Discount Received
125
120
5
25
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
10
Procurement of Services
Scenarios
• Procurement of services like Professional fees, Audit Fees, etc.
• Example: Purchase Order = $100, Vendor sends invoice for $125, Early payment discount = $5
Procure To Pay
* Optional
Purchase
Requisition
(Services)
Accounting Documents
FI
Dr. Expense (Acct Assn. in PO)
Cr. GR/IR Clg. (WRX)
CO Dr. Expense (Cost Object in PO)
Purchase
Order
$
100
100
100
Service
Entry Sheet
Accounting Documents
FI
Dr. GR/IR Clg. (WRX)
Dr. Expense
Cr. AP (Vendor)
CO
Dr./Cr. Expense
Invoice
Receipt
$
Outgoing
Payment
(Vendor)
Accounting Documents
$
100
25
125
FI
Dr. AP (Vendor)
Cr. Bank Clearing
Cr. Discount Received
125
120
5
25
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
11
Procurement - Cross-Company Purchase
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:
Accounting Documents
Procuring
Company
Receiving
Company
FI
Dr. Inventory (BSX)
Cr. GR/IR Clg. (WRX)
Accounting Documents
(Cross-Company Doc.)
FI
Dr. GR/IR Clg. (WRX)
Cr. AP (I/C Vendor)
Goods
Receipt
Purchase
Requisition
(Raw Material)
Purchase
Order
Outgoing
Payment
(Vendor)
Invoice
Receipt
Accounting Documents
(Cross-Company Doc.)
Accounting Documents
FI
FI
Dr. AR (I/C Customer)
Cr. AP (Vendor)
Dr. AP (Vendor)
Cr. AP (I/C Vendor)
12
Subcontracting
Procure To Pay
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
Subcontracting
Purchase Order
Accounting Documents
FI
CO
Goods Issue
RM/Components
To Vendor (541)
$
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
Cr. COGM-FG
Dr. Consumption-RM
Dr. Subcont. Charges
130
100
25
Goods Receipt
Finished Goods
From Vendor (543)
Accounting Documents
FI
CO
Dr. GR/IR Clg. (WRX)
Cr. AP (Vendor)
Invoice Receipt
(For Charges)
$
25
25
Outgoing
Payment
(Vendor)
Accounting Documents
FI
Dr. AP (Vendor)
Cr. Bank Clearing
$
25
25
CO
13
Stock Transfer - Intracompany
Example: Plant 1000 (MAP = $1250) transfers material ABC to Plant 2000 (Standard price = 1200)
Stock
Transfer
Option 1: w/o STPO – 1-Step Process
Same financial impact
Accounting document
Transfer
Posting
(301)
FI
Stock
Transfer
Option 2: w/o STPO – 2-Step Process
Transfer
Posting
(303)
Stock
Transfer
Goods
Receipt
(101)
Stock
Transfer
Option 4: With STPO with Delivery
Stock
Transfer
Purchase
Order
Delivery/
PGI
(641)
1,200
Cr. Inventory (Sending Plant)
1,250
50
* Only If receiving plant valuates with Std. Price
Transfer
Posting
(305)
Goods
Issue
(351)
Dr. Inventory (Receiving Plant)
Dr. Price Difference*
Option 3: With STPO w/o Delivery
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
Goods
Receipt
(101)
14
Stock Transfer — Intercompany
Scenario: STPO with Delivery
Before Enhancement Pack 5
Accounting Documents
Accounting Documents
Stock
Transfer
Purchase
Order
Delivery/P
GI (641)
FI
Dr. GR/IR Clg
Dr. Input Tax
Cr. AP (I/C Vendor)
Dr. Inventory
Cr. GR/IR Clg
Goods
Receipt
(101)
Sender
Receiver
FI
Invoice
Receipt
InterCo
Billing
(Type IV)
Accounting Documents
Accounting Documents
FI
FI
Dr. COGS
Cr. Inventory
Dr. AR (I/C Customer)
Cr. I/C Sales
Cr. Output Tax
15
Stock Transfer — Intercompany (cont.)
Scenario: STPO with Delivery
Enhancement Pack 5 – New options with preconfigured Delivery Types for SIT
Sender
1.
STPO with Delivery
Type NCC2
2.
STPO with Delivery
Type NCC3
3.
STPO with Delivery
Type NCCR
Receiver
Sender’s
Stock
Sender’s
In-Transit Stock
Sender’s
Stock
Sender’s
In-Transit Stock
Sender’s
Stock
Outbound
Delivery
Receiver’s
Stock
Receiver’s
In-Transit Stock
Receiver’s
Stock
Receiver’s
In-Transit Stock
Receiver’s
Stock
Transfer of Ownership
On Arrival at a Port
Proof of Delivery OR
Goods Receipt
16
Manufacturing Order
Procure
To Pay
Example with Product Cost By Order
Debits: RM Cost $800, Internal Activity $1000, External Activity $200, Overhead $400
Credit: FG standard price $2500
Purchase
Requisition
Accounting Documents
$
FI
Dr. Ext. Labor (From PO)
Cr. GR/IR (WRX)
200
200
CO
Dr. Ext. Labor (Prod.Order)
200
Purchase
Order
Goods
Receipt
Production
Planning
Operation Confirmations
Planned
Order
(Finished
Goods)
Production/
Process
Order
Issue
Raw
Material
Internal
Activity
External
Activity
Finished
Goods
Produced
Overhead
Variance
Calculation
Production
Order
Settlement
Accounting Documents
$
Accounting Documents
$
Accounting Documents
$
FI
Dr. Consumption-RM (GBB-VBR)
Cr. Inventory-RM (BSX)
800
800
FI
Dr. Inventory-FG (BSX)
Cr. COGM-FG (GBB-AUF)
2,500
2,500
FI
Cr. Price Diff. (PRD)
Dr. COGM-FG
100
100
CO
Dr. Consumption-RM (Prod.Order)
800
CO
Cr. COGM-FG (Prod.Order)
2,500
CO
Cr. Price Diff. (Prof.Seg)
Dr. COGM-FG (Prod.Order)
100
100
$
Accounting Documents
Accounting Documents
FI
CO
$
FI
Dr. Labor (Prod.Order)
Cr. Labor (Home Cost Ctr.)
1,000
1,000
CO
Dr Overhead (Prod.Order)
Cr Overhead (Cost Center)
400
400
Period-End Processes
17
Order to Cash - Simple Sales Order
Scenarios
• Sale of Make To Stock Items
Order To Cash
Example: Sale Price = $200, Tax = $20, Cost of Goods Sold = $150, Early Payment Discount = $5
Sales Order
Delivery/PG
I
Incoming
Payment
(Customer)
Billing
Accounting Documents
$
Accounting Documents
$
Accounting Documents
$
FI
Dr. COGS-FG (GBB-VAX)
Cr. Inventory-FG (BSX)
150
150
FI
Dr. COGS-FG
150
220
200
20
FI
AB-COPA
Dr. AR (Customer)
Cr. Sales
Cr. Output Tax
215
5
220
AB-COPA
Cr. Sales
200
CB-COPA
Sales
COGS
200
150
CB-COPA
•
•
•
•
Dr. Bank Clearing
Dr. Discount
Cr. AR (Customer)
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.
18
Order to Cash - Sales Order as Cost Object
Order To Cash
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
Sales Order
Delivery/PG
I
Incoming
Payment
(Customer)
Billing
Sales Order
Settlement
Accounting Documents
$
Accounting Documents
$
Accounting Documents
FI
Dr. COGS-FG (GBB-VAY)
Cr. Inventory-FG (BSX)
150
150
FI
150
220
200
20
FI
COGS
Dr. AR (Customer)
Cr. Sales
Cr. Output Tax
Sales
200
AB-COPA
CB-COPA
AB-COPA
$
AB-COPA
CB-COPA
Sales
COGS
200
150
CB-COPA
•
•
•
•
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.
19
Order to Cash - Cross-Company Sales
Scenarios
• Drop-Ship: Order booked by one Company but Delivery Plant belongs to another Company
Accounting Documents
FI
Accounting Documents
Dr. COGS (GBB-VAX)
Cr. Inventory-FG (BSX)
Delivering
Company
FI
Dr. AR (I/C Customer)
Cr. I/C Sales
Cr. Output Tax
Dr. I/C COGS (optional)
Cr. COGS (optional)
Delivery/
PGI
InterCo.
Billing (IV)
Accounting Documents
FI
Cr. AR (I/C Customer)
Dr. Bank Clearing
Incoming
Payment (I/C
Customer)
Selling
Company
* iDoc/ RD04
Customer
Billing (F2)
Sales Order
InterCo. AP
Invoice
Outgoing
Payment
(I/C Vendor)
Accounting Documents
Accounting Documents
Accounting Documents
FI
FI
FI
Dr. AR (Customer)
Cr. Sales
Cr. Output Tax
Dr. COGS
Dr. Input Tax
Cr. AP (I/C Vendor)
Dr. AP (I/C Vendor)
Cr. Bank Clearing
20
Order to Cash - Third-Party Sales
Scenarios
Direct delivery from vendor Plant
Accounting Documents
FI
Dr. Bank Clearing
Cr. AR (Customer
Incoming
Payment
(Customer)
Billing
Purchase
Requisition
(Acct
Assigned)
•
•
Accounting Documents
Dr. AR (Customer)
Cr. Sales
Cr. Output Tax
Sales Order
Procure
To Pay
Order
To Cash
FI
Purchase
Order (Acct
Assigned)
Goods
Receipt (101)
Outgoing
Payment
(Vendor)
Invoice
Receipt
Accounting Documents
Accounting Documents
Accounting Documents
FI
FI
FI
Dr. COGS
Cr. GR/IR Clg.
Dr. GR/IR Clg.
Dr. Input Tax
Cr. AP (Vendor)
Dr. AP (Vendor)
Cr. Bank Clearing
Cr. Discount Received
Sales Order: Standard Item Category = TAS
Purchase Requisition/Order: Account Assignment Category = 1 – Third Party, Item Category = S – Third Party
21
Order to Cash - Free of Charge/Samples
Order To Cash
Scenario-1: No Customer Billing (Separate Order Type/Item Category)
Sales
Order
Delivery/
PGI
Accounting Documents
$
FI
150
150
Dr. COGS
Cr. Inventory-FG
Order To Cash
Scenario-2: Customer Billing with 100% Discount (Separate Item Category/Pricing Procedure)
Sales
Order
Delivery/
PGI
Billing
Accounting Documents
$
Accounting Documents
$
FI
150
150
FI
170
150
20
Dr. COGS
Cr. Inventory-FG
Dr. Sales Deduction
Cr. Sales
Cr. Output Tax
22
Consignment Sales (Books of Consignor)
Order To Cash
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
1a.
Consignment
Fill-Up
2a.
Consignment
Issue
3a.
Consignment
Returns
4a.
Consignment
Pick-Up
1b.
Delivery/ PGI
(631W)
2b.
Delivery/PGI
(633W)
3b.
Delivery/PGI
(634W)
4b.
Delivery/PGI
(632W)
2c.
Billing
(Invoice)
3c.
Billing
(Credit Memo)
Accounting Documents
Accounting Documents
Accounting Documents
Accounting Documents
FI
FI
FI
FI
Dr. COGS
Cr. Inventory
Dr. Customer
Cr. Sales
Cr. Output Tax
Cr. COGS
Dr. Inventory
Cr. Customer
Dr. Sales
Dr. Output Tax
23
Consignment Purchase (Books of Consignee)
Procure To Pay
Scenarios: Consignee selling goods for Consignor
Scheduling
Agreement (Item
Category “K”)
Goods Receipts
MIGO (101K)
Transfer to
Unrestricted Stock
MIGO_TR (411K)
Accounting Documents
FI
Dr. Inventory (BSX)
Cr. Payable-Consignment (KON)
Dr./Cr. Gain/Loss*
* (Std. Price ~ Consignment Price)
Invoice Receipt
MRKO (Consignment
Settlement)
Accounting Documents
FI
Dr. Payable-Consignment
Cr. AP (Vendor)
Outgoing Payment
(Vendor)
Accounting Documents
FI
Dr. AP (Vendor)
Cr. Bank Clearing
24
What We’ll Cover
•
•
•
•
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary and Periodic Valuation
Wrap-Up
25
Preliminary (Real-Time) Valuation
•
•
•
•
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
26
Periodic Revaluation
•
•
•
•
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 Material Ledger

At period-end, closing inventory is revaluated with determined “Actual Price” or periodic
unit price

“Actual Price” can be used for statistical purposes as well without Accounting (optional)
FIFO and LIFO

Available for month-end inventory valuation adjustment reports

Material is valuated in moving average price for daily purpose
Accounting Documents
FI
Dr./Cr. Revaluation Diff. (UMB)
Cr./Dr. Inventory-FG (BSX)
Accounting Documents
FI
Dr./Cr. Revaluation Diff. (UMB)
Cr./Dr. Inventory-RM (BSX)
Accounting Documents
FI
Dr./Cr. Price Diff. (PRY)
Cr./Dr. Inventory (BSX)
27
Material Cost Estimate (Cost Roll-Up)
Quantity Structure
BOM
Value Structure
Routing
•
•
•
•
•
Prices for Materials
Prices for Internal Activities
Prices for External Activities
Overhead from Costing Sheets
Prices from Processes
Costing Run
Costing Data
•
•
•
•
•
•
•
•
•
•
•
Costing Variant
Costing Version
Controlling Area
Company Code
Transfer Control
Costing Date From
Costing Date To
Qty Structure Date
Valuation Date
Valuation Variant
Costing Sheet
1. Selection
2. Structure
Explosion
Example:
4. Analysis
6. Releas
e
5. Markin
g
Current price in Material master gets updated
Material ABC:
Material ABC:
Total Stock:
Total Value:
Price:
3. Costing
1000 Pcs
$800,000
$800/Pc
New Cost Estimate suggests $880/Pc
Total Stock:
Total Value:
Price:
1000 Pcs
$880,000
$880/Pc
Accounting Documents
$
FI
Cr. Revaluation Diff. (UMB)
Dr. Inventory
80,000
80,000
CO
Cr. Revaluation Diff.
80,000
28
Work in Progress (WIP)
Scenario: WIP represents goods in production that have not yet been completed at the end of an accounting period
Manufacturing Order
RM Consumption $800
Activity Allocation $1,200
Overhead $400
COGM – FG $1,000
Material: XYZ
Material Cost
800
Activity Cost
1,200
Overhead
400
--------------------------------------------------Total
2,400
Production Confirmed
(1,000)
--------------------------------------------------WIP
1,400
Month-end
WIP $1400
Accounting Documents
FI
Dr. WIP (B/S)
Cr. WIP Offset (P&L)
CO
NA
$
1,400
1,400
• 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 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
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Physical Inventory Count and Adjustment
Physical Count
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.
Create PI
Documents
(MI01, MI31)
Print PI
Documents
(MI21)
Execute Count
(Manual)
Enter Count
(MI04, MI34)
List Count
Differences
(MI20)
Recount
(MI11)
Post
Difference
(MI07, MI37)
Example:
Material ABC:
Material ABC:
Total Stock:
1,000 Pcs
Total Value:
Price:
Accounting Documents
Total Stock:
1,100 Pcs
$800,000
Total Value:
$880,000
$800/Pc
Price:
$800/Pc
Sock count suggests 1,100 units
$
FI
Cr. Physical Inv. Diff. (GBB-INV)
Dr. Inventory (BSX)
80,000
80,000
CO
Cr. Physical Inv. Diff. (Cost Ctr.)
80,000
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What We’ll Cover
•
•
•
•
End-to-End Scenario Overview
Key Process Flows with Accounting
Preliminary and Periodic Valuation
Wrap-Up
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Where to Find More Information
•
•
For further information on logistics scenarios and design integrations, please refer to:
 SAP Best Practices Baseline Package – Building Blocks
 https://help.sap.com/bp_bl604/BL_DE/html/Content_Library_BL_EN_DE.htm
For learning SAP’s new HANA-enabled logistics and finance solutions, please refer to:
 http://discover.sap.com/S4HANA
 www.s4hana.com/
 S/4HANA 1511 Update: https://vimeo.com/146090331
 SAP Business Suite 4 SAP HANA in a Nutshell: https://open.sap.com/courses/s4h1
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7 Key Points to Take Home
•
•
•
•
•
•
Various logistics scenarios relevant for accounting.
Step-by-step process flows for Procure to Pay (P2P), Manufacturing and Order to Cash (OTC)
Enhanced understanding around FICO accounting integrations.
Account determination setups are critical for correct Accounting.
Preliminary and Periodic valuation methods for accurate Amounts.
Learn about design and configuration options.
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Your Turn!
How to contact me:
Saugata Ghosh, Director, PwC
Saugata.Ghosh@pwc.com
Please remember to complete your session evaluation
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Disclaimer
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other
countries. All other product and service names mentioned are the trademarks of their respective companies. Wellesley Information Services is neither owned nor controlled by SAP SE.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
© 2016 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US 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.
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