SAP Innovations:Are you overlooking important functionality in SAP Controlling

© 2015 ERP Corp. All rights reserved.
SAP’s Innovations – Are
You Overlooking
Important Functionality in
SAP Controlling?
Janet Salmon
SAP SE

Introduction
• With the huge interest around SAP HANA and SAP Fiori it can
be easy to miss some of the other innovations that SAP has
been introducing.
• In this session we’ll look at how you can use some of the SAP
HANA innovations without even implementing SAP HANA!
• We’ll look at some key business functions introduced with
Enhancement Package 5:
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• We’ll look at some new user interfaces introduced with
Enhancement Package 6:
• FIN_CO_CCMGMT
• FIN_CO_CCPLAN and FIN_CO_ORPLAN3

Topics
• Finding Out About SAP’s innovations
• New Reporting Options with SAP HANA
• Material Ledger
• CO-PA
• New Business Functions for Controlling
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• New Business Functions for the User Interfaces in Controlling
• FIN_CO_CCMGMT
• FIN_CO_CCPLAN, FIN_CO_ORPLAN
• Summary
4

SAP Innovation Discovery – Try It
https://apps.support.sap.com/innovation-discovery/index.html

Installing an SAP Enhancement Package
You will need to install
an Enhancement
Package to use many of
the options discussed in
this presentation.

Installing an Add-On…
You will need to install an add-on
to use the following applications
in Controlling:
• SAP Fiori Add-On,
• SAP Financial Closing cockpit

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
8

One atomic copy of data for
Transactions + Analysis, all in Memory
 Eliminate unnecessary complexity and latency
 Less hardware to manage
 Accelerate through innovation, simplification + in-memory
 3 copies of data in different data models
 Inherent data latency
 Poor innovation leading to wastage
Transactions + Analysis + Acceleration
processes separated
SAP HANA
(DRAM)
Transact
ETL
Analyze
ETL
Re-think Data Management for Real-time Business
A Common Database Approach for OLTP and
OLAP Using an In-Memory Column Database
Hasso Plattner
Accelerate
Cache
VS

Data Warehouse Approach to Profitability Reporting
Transact
ETL
Analyze
ETL
Accelerate
Cache
Assigned to
Operating Concern
Characteristics/
Value Fields
Totals Records
Summarization Levels
…
Moved to
InfoProviders
Extract
Enrich
Load
…
Transactions Recorded
In CO-PA
Invoices
Sales Documents
Assessment Cycles
Settlement
Others
…
To Deliver
Profitability by Dimension…
Data Latency – Around 8 Hours

Leaner Approach to Profitability Reporting
UI: Analysis for Microsoft Office
Transact
Analyze
ETL
DataSource:
BW Query
Operating Concern
on SAP HANA
CE1 table (transactions)
CE4 table (dimensions)
Virtual Info Provicder
(Create using
transaction KEIP)
Result for SAP IT: Postings to CO-PA are
visible immediately and close schedule is
reduced by three days.

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
12

Virtual InfoProviders for Material Ledger
1. Use Transaction HDBC to display all options
2. Select Material Ledger > Virtual InfoProviders
3. Generate Virtual InfoProviders for Material
Ledger and Actual Cost Component Split

Virtual InfoProviders for Material Ledger (cont.)
Sample Report Provisioned
Using Virtual Infoprovider
Generated Virtual Info Provider
• See Also:
SAP Note 1654843 – ERP accelerators:
Material Ledger- Virtual InfoProviders

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
15

Virtual Info Providers for CO-PA
Use Transaction KEIP to Generate Your Virtual InfoProvider
See Also SAP Note 1667584 – Virtual InfoProvider for CO-PA

Virtual Info Providers for CO-PA (cont.)
Info Provider for Your
Operating Concern
(Under Unassigned
Nodes)
Sample Report Provisioned
Using Virtual InfoProvider

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
18

Activate Using Transaction SFW5 (Switch Framework)
All business functions
are off by default.
You will need to have
your system
administrator activate
those you need.

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
20

Parallel Accounting: Cost of Goods Manufactured

Value Flow — Overview
Controlling
Update of Depreciation Expenses by Cost
Center and Version
Actual Costing
Periodic Costing Run
Updates either leading valuation or local valuation*
Version 0 (legal)
(Actual rate)
Version N (par.
COGM)
(Actual rate)
Actual Costing
Alternative Valuation Run
Updates local valuation if both valuations use actual costs*
Depreciation Area 01
(IFRS)Asset Accounting
Perform Depreciation Run
Version 0
(legal valuation)
Ledger 0L
(IFRS)
Version N
Depreciation Area 02
(Local GAAP)
Ledger N
(Local GAAP)
(parallel COGM)
Version N (par.
COGM)
(Actual rate)
Controlling
Direct Activity Allocation at standard;
Actual Rate Calculated at Period
Close
Version 0 (legal)
(Actual rate)
Version 0
(legal)
(Standard rate)
Version N
(par.COGM)
(Actual rate)
OR
Financial Accounting
Update of General Ledger

Post depreciation in
Asset Accounting
Transfer depreciation
to General Ledger
Transfer depreciation
to Cost Center
Accounting
Transfer of depreciation from asset accounting to
controlling
 The depreciation values for the international accounting principle are updated to the leading ledger in the
SAP General Ledger application (or the global accounts in the classic general ledger) and to version 0 in
controlling. The depreciation values for the second accounting principle are updated to a nonleading ledger
in the SAP General Ledger (or the local accounts in the classic general ledger) and to a delta version in
controlling.
* Improvements
Allows global manufacturing organizations to set activity prices that
take account of depreciation according to IFRS and local GAAP.
In previous releases, only the values in the leading ledger were
transferred to controlling. Other values were unavailable for
controlling and therefore could not be used to determine activity
prices and update inventory values for the goods manufactured.
Customer business challenges Business value
Asset Accountant
*
Financial Accountant Controller
Parallel Accounting and
related processes*

Calculation of activity prices to reflect multiple accounting
approaches
 During all operational processes (such as confirmations and backflushing in logistics), the hours worked
are valued with the planned activity rate in version 0 in controlling. At period close, activity price calculation
is used to determine the actual activity rates for the leading version (international accounting standard) and
the alternative version (local GAAP) in that period. Both are calculated as deltas to the initial standard
activity price.
Perform order
confirmation/
backflushing
* Improvements
Calculate standard
activity rates
Include standard
activity rates in
material ledger
Calculate actual
activity rates for
both approaches
Controller
Reduces manual effort at period close.
In previous releases, it was possible to calculate only activity
prices to take account of the leading valuation. Alternative
approaches required manual workarounds.
Record working
time
*
ControllerShopfloor
Employee
Inventory Accountant
related processes*

Select actual activity
rates for activities used
during period
Calculate actual product
costs in leading or
alternative valuation
Revalue material
inventory in leading or
Inclusion of multiple activity prices in periodic costing run
 Allows the periodic costing run to use activity price from leading valuation to determine the cost of goods
manufactured according to the global accounting standard, and update the inventory values accordingly
 May also be used to calculate actual costs according to the local accounting standard, if the group
accounting approach is standard costs
* Improvements
Reduces manual effort at period closePeriodic costing run only allows the inclusion of activity prices in
version 0
**
related processes*
Controller/
Inventory
Accountant Inventory Accountant
Controller/
Inventory
Accountant

Select actual activity
rates for activities used
during period
Calculate actual product
costs for period in
Revalue material
inventory in alternative
valuation
Inclusion of multiple activity rates in alternative valuation run
 Allows multiple valuation runs to be created to determine the value of the cost of goods manufactured. The
periodic costing run uses the activity price for the leading valuation (version 0) while the alternative
valuation run uses the activity price for the alternative valuation. It is then possible to revaluate inventory
(create closing entries) to take account of both valuations.
*
* Improvements
Reduces manual effort at period close.In previous releases, the alternative valuation run could include
different approaches to the valuation of raw materials, such as
FIFO, LIFO, and so on, and initiate activity price calculations for
the periods selected. Now activity prices for the relevant version
can be included in the run.
*
related processes*
Controller/
Inventory
Accountant Inventory Accountant
Controller/
Inventory
Accountant

Parallel Accounting: Asset Accounting

Smart Financials
Process
flow:
Generated documents by settlement:
(2) With Acc.Principle local GAAP
D 70 Machines 32000 10.200
C 50 Other Expenses 415000 10.000
C 50 Freight Expenses 472000 200
IFRS
D 70 Machines 32000 10.000
Assumptions:
• Freight Costs are capitalized under
IFRS only
• 100% of other expenses are
capitalized under IFRS and local
GAAP
• 80% of other expenses are
capitalized under Tax Law.
local GAAP
(2c) With Acc.Principle TAX
D 70 Machines 32000 8.000
Tax
(1) With Acc.Principle IFRS
Investm.
Order
Other expenses,
Freight costs
Ext. Procurement,
Production costs
Settlement AuC, Asset
Parallel Accounting for Fixed Assets

FI-AA (New) – Settlement
• CO generates accounting principle specific postings
• Assign settlement rule for AuC: you need to assign a settlement
rule for each line item (per accounting principle)

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
30

Stock in Transit and Actual Costing

Stock in Transit for (Cross-Company-Code) Sales
Processes
 During the transportation phase companies, can keep ownership of the materials that are sent to a
customer or another company code (visible as stock in transit in this company).
 Alternatively, ownership for these materials (during the transportation phase) can be directly transferred to
the receiving company code (visible as stock in transit in the receiving company code).
 There is also an option to move materials from one stock in transit to another.
Delivered by Business Function: Cross-Company-Code Stock Transfer & Actual Costing
Create Stock
Transport Order
* Improvements
This functionality enables companies to track and manage ownership
changes better when selling materials to a customer or another
company code.
Companies can more easily fulfill the legal requirement of showing all
the stock values in the group.
In sales processes and cross-company transfer processes, it was
impossible to model stock in transit. The ownership of the
material was not reflected correctly in SAP ERP.
When selling materials from one company code to another using the
two-step approach, the stock value did not automatically appear
in the balance sheet after the first step.
Purchaser
Create Cross-
Company
Delivery
Perform Goods
Issue
Perform Goods
Receipt
Manage
Ownership
Transfer *
*
Plant Manager Warehouse Clerk Warehouse Clerk
*

EHP 5: Cross-Company Code Material Transfer with
Stock in Transit
Sender Company Code Receiver Company Code
Sender‘s
Free Stock
In plant In transit In plantIn transit
Outbound
Delivery
Purchase
Order
Receiver‘s
Free Stock
Sender‘s
Free Stock
Receiver‘s
Free Stock
Sender‘s
Transit Stock1
Sender‘s
Free Stock
Receiver‘s
Free Stock
Sender‘s
Transit Stock2 Receiver‘s
Transit Stock
Sender‘s
Free Stock
Receiver‘s
Free Stock
Receiver‘s
Transit Stock3
Immediate Transfer
(1-step scenario)
Goods stay in sender’s
ownership during transfer
Ownership changes
during the transfer, e.g.,
upon arrival in the port
of destination
Ownership changes
when leaving the sender
0

Actual costs and
internal profit in
company 1
Actual costs and
internal profit in
company 2
Actual costs and
internal profit for the
whole group
Cross-Company-Code Actual Costing
 By activating this business function, you can extend material and actual costing to run across company
codes without losing actual costs and actual cost component split at the company code border. The
intercompany sales process allows transfer of the costs and cost component split information from the
sending company code to the receiving company code. Calculation of mark-up or intercompany profit in
such a value chain is also supported.
Delivered by Business Function: Cross-Company-Code Stock Transfer
& Actual Costing
*
* Improvements
• Markups and transfer profits visible in cost element
• Legal valuation: show transfer profit in actual cost component split
• Group valuation: rollup of price variances
• Group valuation: rollup of actual cost component split
Up to now, customers could not transfer actual cost component split
information from one company code to another.
Marks-ups could not be used in a cross-company-code sales
scenario.
Cost accountant company 1
**
Cost accountant company 2 Group controller and portfolio
manager

Cross-Company Actual Costing
Group
Company
A
Company
B
Costs
Raw Mat. 20
Energy 25
Labor 15
Production 40
Costs
Raw Mat. 100
Energy 0
Labor 0
Production 0
Sales process
Actual costing provides no visibility into
cost structure after intercompany sales
The enhanced solution shall
ensure cost transparency during
intra-company sales by adding
freight costs and intra-company
profits to the costs incurred in the
selling company code to provide
a correct valuation from a group
perspective
Issue Requirement

General Mechanism of Cost Transfer
• The new stock in transit processes secure that the inventory
value is always recorded and present in material ledger.
• When a stock transfer between company codes is posted, ML
records the value from the purchase order in parallel to the cost
at the sending side.
• The PO price is used for the legal valuation, the cost is used for
group valuation. The difference of both is shown as mark-up.
• If actual costs at sender are recalculated the mark-up and the
group costs are adjusted.
Plant 1
Total cost 1000
Materials 500
Labor 400
Overhead 100
Freight
CC Markup 0
Sold to
Plant 2
Total cost 1100
Materials 1100
Labor 0
Overhead 0
Freight
CC Markup 100
PO-Price
1100,-

Comparison of Views
37
• There are 3 different implementation options:
• Legal View (LV): contains the markup, but will show no cost component
information from supply chain members outside the own company. Materials
purchased from affiliate companies will populate only the material cost
component and the markup
• Default in currency type 10.
• Transparent Legal View (TLV): Contains the markup, and will preserve cost
component information coming from affiliate companies if the logistical
process allows that.
• Activated by a BADI in currency type 10.
• Group View (GV): Can be used in parallel to the LV or TLV in a parallel valuation.
Does not show a markup, since all processes are treated as if the plants were part
of the same organization, without taking company code borders into account.
• Currency type 11 or 31.
• An implementation can use either LV or TLV. GV can be added for both
• The 2 typical scenarios to evaluate would be only TLV or LV + GV

Valuation Example in 3 Views
• LV (Legal View)
• Total Cost from PO +
Freight Cost
• Markup shown
• CC collapsed
Plant 1
Total cost 1000
Materials 500
Labor 400
Overhead 100
Freight
CC Markup 0
Sold to
Shipper
Plant 2 LV TLV GV
Total cost 1175 1175 1075
Materials 1100 600 500
Labor 0 400 400
Overhead 0 100 100
Freight 75 75 75
CC Markup 100 100 100
PO Price
1100,-
Freight
invoice
75,-
• TLV (Transparent Legal View)
• Total Cost from PO +
Freight Cost
• Markup shown
• CC from Sender
• Material cost include
markup
• GV (Group View)
• Total Cost from
Sender + Freight
• No Markup
• CC from Sender

Screenshots in Group View
Plant 2000 sold 5 PC to plant
1000 within the same group:
Cost Info is preserved
No Mark-up is shown
A transit stock on the sending
side was used intermediately

Screenshots in Transparent Legal View
Plant 2000 sold 5 PC to plant
1000 in another company code
Consider the different currencies:
GBP in plant 200
EUR in plant 1000
Currency conversion will take place
using the rate GBP /EUR
The PO / Invoice Price was 4000
EUR
The cost component info is
transferred (TLV is activated via
BADI)
The consumption cost component
for the material in plant 1000 is
‘other cost’. Therefore the ‘Delta
Company Code’ is mirrored there

Usage of Transit Stock (Legal View)
1. Material is produced
in plant 2000 using 2
materials and one
activity
2. Material is moved
into the transit stock,
keeping its value
3. Material arrives in
plant 1000 at the PO
price of 4000 EUR

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
42

existing header costed orders operation level costing
header
operation
operation
operation
costs:
plan/actual header
operation
operation
operation
costs:
plan/actual
costs:
plan/actual
costs:
plan/actual
Operation Costs
Update of Plant Maintenance Cost View

OAA Order
The system status I0053 (ACAS in English) is displayed when the
order operation is the account assignment object. This is the same
indicator as for a PS network with activity level costing.
• Indication using System Status

OAA Order
• Account assignment details and operation costs
The account assignment
details for an operation are
shown on the Account
Assignment tab of the
operation detail view.
Sub-operation account
assignment values are
inherited from the superior
operation.
The costs are displayed in
the cost tabs on the lower
panel.

existing header
costed orders
operation level
costing
header
operation
operation
operation
costs:
plan/actual header
operation
operation
operation
costs:
plan/actual
costs:
plan/actual
costs:
plan/actual
ORnnnn
………
Reporting / Transactions / Extraction
Transformation of
costs (plan/actual)
according to value
categories
OVnnnn
OVnnnn
OVnnnn
…………
Stored in database as
Dynamic summation
for header values
Operation Costs
• Update of Plant Maintenance Cost View
OAA order costs are only stored for the operation objects. Header totals are dynamically summed as
required. No costs are stored on the database for the OAA Order object.

Reporting
The operation cost overview report shows costs for all operations by value category.
The report can be run as a transaction IW40N and include sub-orders.
• Operation overview report

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
49

Activate Business Function and Relevant WebDynpros!
50
Use transaction SICF to
activate the relevant
webdynpro applications

Copy the WebDynpros from the Sample Roles to Your
Controller Roles
51
Copy the delivered master
data applications from the role
SAP_CO_INTERNAL_CONTRO
LLER to your roles

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
52

WebDynpro Application for Cost Center Maintenance
53
Rolle

WebDynpro Application for Cost Center Hierarchies
55

Inactive Versions
56
Changes can be
made prior to a
reorganization
and stored as
an inactive
version

Inactive Versions (cont.)
57
Choose
between
versions in the
application and
in, e.g., Report
Writer

Web Dynpro Application for Internal Orders
58

Web Dynpro Application for Activity Types
59

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
60

Projects: Cost Element Planning
61

Projects: Top-Down Planning
62

Web and Excel Frontend in EhP6
• Both frontends use the same backend planning model
• Same planning queries and same planning functions
• All features described are available in both frontends
Web Dynpro Analysis Office

Query Adaptations
• Customers want to see:
• Actual values
• Plan values from other
years/versions
• Formula columns
• „Planning is like reporting with
editable columns“

Topics
• Material Ledger
• CO-PA
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
65

SAP Resources
• http://help.sap.com/businesssuite > SAP ERP
• Business Functions in SAP ERP > Enterprise Business
Functions > Accounting
• CO, Parallel Cost of Goods Manufactured
• CO, Cost Center Managerment
• CO, Cost Center Planning
• CO, Order Planning
• Business Functions in SAP ERP > Enterprise Business
Functions > Logistics
• MM, Stock in Transit and Actual Costing
• Operation Account Assignment

Resources (cont.)
67
• www.financialsexpertonline.com/
• Janet Salmon, “Provide Parallel Product Costs for Inventory Valuation in
the SAP General Ledger” (Financials Expert, October 2009).
• Janet Salmon, “Use Alternative Valuation Runs in the Material Ledger to
Smooth Seasonal Price Variances” (Financials Expert, November 2007).
• Marco Jordy “Don’t Wait Until After Go-live to Set Up Cross-Company
Code Controlling” (Financials Expert, September 2006).
• Ashim A.Nanda “Cater to Arm’s Length Standards by automated
Intercompany Transfer Pricing Design” (Financials Expert, October 2010).
• Janet Salmon, “Capture Service and Maintenance Costs at Operation
Level from SAP Enhancement Package 5” (Financials Expert, December
2012).
• Janet Salmon, “Refresh the Look of the Master Data in Cost Center
Accounting with a New Business Function” (Financials Expert, February
2013).

Resources (cont.)
68
• https://scn.sap.com/docs/DOC-32680
• http://scn.sap.com/docs/DOC-29523
• SAP Notes 1836149, 1719702 (project planning) and
1777947 (cost center planning)

Other Resources
Janet Salmon, Controlling with SAP – Practical
Guide
ISBN: ISBN 978-1-4932-1012-1
https://www.sap-press.com/controlling-with-sap-
practical-guide_3625/
Martin Munzel, New SAP Controlling Planning
Interface
http://co.planning.espresso-tutorials.com

Five Key Ideas
70
• Use SAP Innovation Discovery to find out about Enhancement
Packages, SAP Notes and other innovations
• Consider using virtual InfoProviders to improve your end user
reporting
• If you are a global company, explore the new functions for
Actual Costing and Multiple Valuations
• Don’t forget that some of the CO-related innovations might be in
Logistics because of the integrated nature of SAP ERP
• Consider updating the look of your user interfaces and planning
applications, especially if you are bringing new users online

Questions
• Now:
• Ask questions now for immediate answers
• Later:
• Janet.dorothy.salmon@sap.com
71
Q&A

Disclaimer
SAP®, R/3, mySAP, mySAP.com, xApps, xApp, SAP NetWeaver®, Duet®, PartnerEdge, and other SAP® products and
services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in
Germany and in several other countries all over the world. All other product and service names mentioned are the
trademarks of their respective companies. ERP Corp is neither owned nor controlled by SAP.

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