58084200

SAPinsight16
SAPinsight16
NextGen Super Users:
Department of the Future
Enhance the Productivity of

Your SAP Controlling
Implementation
Ashish Sampat
SAPinsight16
Introduction
 Leverage FI, CO and MM period locks
effectively
 Run batch jobs for WIP, Variance and
Settlement
 Learn which cost allocation method is best
for you
 Troubleshoot product costing messages
 Review cost objects in controlling
 Use Material Status to control Logistics
transactions
2
SAPinsight16
Topics
Synchronize FI, CO, MM Periods
Automate WIP, Variance, Settlement
Optimize Cost Allocation Methods
Troubleshoot Product Costing Messages
Evaluate the Right Cost Object For You
Utilize Material Status
Summary
3
SAPinsight16

 All three period locks must work in sync
 MM period is controlled at co. code level, FI at posting period variant
level (co. code is assigned to posting period variant), CO period at
controlling area level
 Ensuring accurate cut-off of various processes for month-end is essential
for a smooth financial month-end close
 Communicating such cut-off dates to various stakeholders across
processes and functions is important
 e.g. Sales, AR, AP, Fixed Assets, Inventory movement transactions
 This will help schedule month-end close tasks around these cut-off
dates leveraging features of FI, CO and MM period locks
 Leverage FI, CO and MM period locks to optimize your month-end tasks
 Map financial month-end close processes right from business blueprint
phase
 Cross-functional business and IT team should review current (as-is)
processes for month-end close and carefully map to future (to-be)
processes
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MMPV – Materials Management SAPinsight16
(MM) Period
 Transaction MMPV - MM period roll job - runs at midnight on the first day
of accounting period
 MMPV opens up new MM period, allows material related entries in new
period
 MMPV opens new MM period (n), closes period preceding previous (n-2)
 When period 12 is opened, 10 is closed, leaves MM periods 12, 11 open
 No materials-related entries can be made to MM period 10 - whether FI
and CO period locks for period 10 are open or not
 It is usually not advisable to re-open MM period once it is closed
 All goods movement transactions for the new period (n) will stop if MM
period for new period is not opened at the correct time (midnight of first
day of n)
 MM period roll should be scheduled as a batch job using program
RMMMPERI
 Important to keep FI and CO period locks for the new period open,
otherwise MM postings for the new period will fail, even when MM
period is opened
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OB52 – Financial Acctng (FI) Period SAPinsight16
Lock
 FI period lock can be maintained for account types: K-Vendor, D-
Customer, A-Assets, S-GL Accounts, M-Materials
 Most account types for the new FI periods are opened couple of days
prior to the MM period, (FI period lock for period 12 should be opened
on 11/29 or 11/30)
 Existing FI period is kept open till period-end close tasks are completed
over few days in the new month
 Two periods are open for few days to facilitate closure
 Postings are made to the previous period, provided account types
are open
 Once FI period is closed, no postings can be made in the previous
period
 FI periods can be re-opened any number of times if there is a business
need
 Authorization group can be used to restrict postings:
 General versus special posting period in FI
 Certain users with special access can post to prior period
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SAPinsight16
OB52 – Explanation of FI Period Lock
7
SAPinsight16
OKP1 – Controlling (CO) Period Lock

 CO period lock is maintained for various controlling business transactions
 Transaction "CO-through postings in FI" (COIN) controls postings from FI to
CO
 If COIN is locked in CO, then no postings can occur in FI or CO
 Open CO period lock immediately on opening FI period lock
 (e.g. CO period lock for period 12 should be opened on 11/29 or 11/30,
with FI)
 CO period lock applies only to cost elements - generally on the P&L side
 This would mean that balance sheet postings ignore CO period lock
 FI period lock has a wider impact than CO period lock
 Certain transactions can be carried out within Controlling (like Assessments,
Activity Allocations, etc.) even when the FI period is locked
 FI and CO periods are generally maintained by one single team in Finance.
 MM periods are controlled by program RMMMPERI, scheduled in batch
8
SAPinsight16
Topics
Summary
9
What do WIP, Variance, Settlement SAPinsight16
do?
 Work-in-process (WIP) calculation on orders:
 Incomplete (or Work-in-process - WIP) orders: Orders which have costs
posted against them and the system status is neither DLV (delivered),
nor TECO (technically complete) are considered to be incomplete.
 Variance calculation on orders
 Completed orders: Orders with system status of either DLV (delivered) or
TECO (technically completed) or both are considered to be complete.
 Completed orders will qualify for variance calculation, system calculates
target versus actual variances, targets are determined using standard
cost.
 Settlement of orders:
 Next step: post these values to financial accounting using the
settlement.
 Costs are settled to object that is maintained in the settlement rule.
 Settlement rule is governed by the order type and the nature of
activity/production performed on the order.
10
WIP, Variance, and Settlement: SAPinsight16
Transaction codes
 Menu path: Controlling  Product Cost Controlling  Cost Object
Controlling  Product Cost by Order  Period-end Closing  Single
Functions
 Work-in-process (WIP) calculation on orders:
 KKAO—WIP mass processing
 KKAQ—WIP mass display
 KKAX—WIP individual processing
 KKAY—WIP individual display
 Variance calculation on orders:
 KKS1—Variance mass processing
 KKS2—Variance individual processing
 Settlement of orders:
 CO88—Settlement mass processing
 KO88—Settlement individual processing
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WIP, Variance, Settlement: SAPinsight16
Accounting Postings
 WIP and variance calculation do not post entries!
 WIP and variance calculation transactions do not post any financial
entries.
 They merely calculate the amount of WIP variance to be settled.
 Financial postings occur when the settlement transaction is executed.
 Financial postings at settlement for WIP:
 Settlement posts WIP entry to the P&L and balance sheet accounts.
 Balance sheet posting is carried forward to the next month.
 WIP values will automatically be reversed during the subsequent
period's settlement once the orders are set to TECO/DLV status.
 Financial posting at settlement for variance:
 Settlement posts variance entry to production order variance account
and factory output production (also known as production value) GL
account.
 Note: An order usually has either WIP or variance posting in a particular month. An order may get both a
WIP and a variance posting in the month in which an incomplete order is completed.
12
Frequency, Mode of Execution

 Can be run as many times in a month as necessary
 Multiple postings for same order in same month may occur
 Running them daily may be an overkill; run weekly, or minimum once a
month
 Transactions should be run at least once during close
 On-line execution (foreground mode)
 Batch jobs (background mode) to handle frequent runs
 Scheduling jobs: Jobs are run by the system, removes person-
dependency
 Background jobs create output (spool): to be reviewed by the business
user(s)
 Timing: Due to their resource intensiveness, scheduling jobs in the
night / on off-peak hours helps maintain system performance
13
Using Batch Jobs

 Background jobs: Use transaction SM36 (may be controlled centrally by
BASIS)
 Program names for background run:
 WIP: SAPKKA07BG
 Variance: RKKKS1N0
 Settlement: RKO7CO88
 Variants for selection criteria, like plant, year, period and parallel
processing
 Specific naming conventions, depending on the internal processes,
need to be followed
 Example naming convention ZXXNNN_PROG_PROC_VARIANT
 Background jobs can be reviewed by using transaction SM37
14
What to Watch Out For

 Even when these jobs are scheduled to run in background, it is a good
idea to run them one final time before the books are closed.
 Final run will pick up any additional transactional data.
 Run transactions KKAO, KKS1 and CO88 in quick succession.
 Order status change between jobs
 Order(s) may change status between jobs due to additional
transaction postings / user actions.
 Reverse variance calculation and settlement for such orders,
followed by re-run of WIP, variance and settlement.
 Example: Variance was calculated for on a DLV (delivered) order.
 A goods receipt was reversed, order is now PDLV (partially delivered).
 Suggested sequence: KO88-reverse, KKS2-reverse, KKAX, KKS2, and KO88.
 Orders which missed period-end closing can be identified using
transactions S_ALR_87013127 (order selection).
15
SAPinsight16
Topics
Summary
16
SAPinsight16
Cost Allocation Methods

 A typical manufacturing facility incurs costs in various departments,
including services rendered by support departments to the production
department.
 Usually, the goal is to transfer costs from service departments to
production departments, so that the costs get added to the cost of the
product.
 This transfer of costs internally within controlling is achieved using
allocations.
 There are two main types of allocations in controlling: distribution and
assessments.
 Distribution: Original, primary cost element is retained and passed on
to the receivers.
 Assessments: Original cost elements are grouped together into
assessment cost elements (secondary cost elements); and passed on to
the receivers. Original cost elements are not displayed on the receivers.
 The sender and receiver rules are known as segments. Segments are
maintained in allocation cycles.
 Once an allocation cycle posts, the sender-receiver (segment) information
17 is displayed in the controlling document.
SAPinsight16
Distribution Versus Assessment

 Whether you select distribution or assessment (or both) as method of cost
allocation, depends on your business requirement.
 Example: A facilities department (one sender) responsible for a building.
 Incurs three primary costs: building rent, telephone expenses, and
supplies.
 Four departments: marketing, finance, purchasing, and HR (four
receivers).
 Costs are allocated based on predefined percentages.
 Distribution:
 Same primary cost element is used to allocate costs.
 The sender cost center gets a credit using three original primary cost elements.
 Four receiving cost centers will each see three original primary cost elements as debits.
 Each department can identify cost allocated on each of the three cost elements-rent, telephone,
supplies.
 Assessment:
 A secondary cost element for assessment, (say, facilities expense), is used to allocate costs.
 The sender cost center gets a credit via the assessment cost element.
 Four receiving cost centers will each see one secondary cost element as debit.
 The receivers do not know how much of this facilities expense consists of rent, telephone, and beverage.
 One would need to look up a report for the sending cost center to identify the breakdown of these costs.
18
How to Optimize Performance of SAPinsight16
Allocation Cycles
 SAP Note 1751885 (ALLOCATION-Description of database selection methods):
 Guidance of which database selection method should be used, and when.
 Perform run-time analysis (BASIS activity) to identify the best method.
 KSV5 / KSU5: Click on the settings icon. Another window opens up,
 Field database selection provides options for:
 Selection by Cycle (default selection)
 Optimized Selection by Cycle
 Selection by Segment
 Use parallel processing, cycle will run on multiple servers in parallel.
19
SAPinsight16
Topics
Summary
20
SAPinsight16
Product Costing Messages

 Accurate and error-free costing is every controller’s goal.
 Releasing an incorrect cost estimate may result in incorrect financial
postings.
 A costing run will be error-free when relevant master data is accurately
setup.
 Getting all materials to cost successfully requires an iterative process
where the errors are analyzed in detail, fixes are made, and costing is
performed again.
 Costing Run log: messages categorized with traffic lights / message
type:
 Error messages: shown in red (message type “E”)
 Warning messages: shown in yellow (message type “W”)
 Information messages: shown in green with (message type “I”)
 Unique message numbers further categorize the type of error
 E.g. CK 240: Cost component split costed with value of zero
21
SAPinsight16
Product Costing Messages

 Message class (area) and number combine as a category
 CK 197: GL account ….. does not exist
 CK 597: Costing items for material…… without cost element
 CK 168: Cost estimate for material ….. is incorrect
 KL 023: No control record for Activity type …in version ….
 CK 776: No valid source of supply found for material …
 CK 240: Cost component split costed with value of zero
22
Troubleshooting Product Costing SAPinsight16
Messages
 Compilation of frequent messages during costing
 Some of these messages can be at times cryptic and require further explanation
Message Message
Error description Explanation / root cause Steps for correction
Class No.
KL 023 No control record for Missing planning record for <CO Maintain Cost Center Planning
Activity type in activity Area>/<Cost Center>/<Activity Type> (KP26) for given combination in
planning / qty planning in <version> / <Year> combination respective version and year
CK 060 Object was not costed Missing procurement price / bill of Maintain BOM if proc type in
material, depending on proc type MM03-MRP2 "E" in-house
(MM03-MRP2 view) production; maintain purchase
price if “F" externally procured
CK 130 Work center <WW> in Material uses routing (CA03) that has Maintain cost center assignment
plant <PPPP> has no cost work center (CR03) which is not for work center (CR02) or Resource
center assigned to a cost center (CRC2)
MG 144 The field <MBEW-HRKFT> Missing <Origin Group (field HRKFT)> Maintain relevant views in material
is defined as a required in MM03-Costing 1 view master (MM01 / MM02)
field; it does not contain
an entry
CK 168 Cost estimate for material Costing result of underlying material Rectify errors in underlying
<MMMMMMM> in plant was incorrect cost rollup does not take materials
<PPPP> is incorrect place
CK 197 G/L account <Chart of GL Account maintained in MM-FI Create the GL account, or modify
Account> <Account> does Account determination is not setup GL Account in MM-FI Account
not exist (FS00) determination (OBYC) for GBB-VBR
23
Messages (cont.)
Message Message
Class No.
CK 229 No routing could be Missing routing (CA03) / recipe Maintain routing (CR02) / Recipe
determined for material (C203) setup for the quantity (CRC2)
<MMMMMMM> structure date
CK 239 Cost element <CCCCCCCC> Missing assignment of cost Maintain configuration for cost
is not assigned to a cost element to cost components components (transaction OKTZ),
component (OKTZ) map cost element to appropriate
cost component
CK 240 Cost component split Costing result was zero, no cost Maintain BOM if proc type in
costed with value of zero components could be MM03-MRP2 "E" in-house
determined production; maintain purchase
price if “F" externally procured
CK 322 Consumption account Incorrect valuation class setup in Check valuation class in MM03-
cannot be determined MM03-Accounting 1 view Accounting 1 view/ A valid class will
point to correct consumption
account.
CK 323 There is no exchange rate Missing exchange rate for Maintain exchange rate
for exchange rate type <P> currency combination for given (transaction OB08, updates table
on <MM/DD/YYYY>: <USD exchange rate type and valuation TCURR)
/ EUR> date
CK 354 Material <MMMMMMM> Material status does not require Change the status of the material
in plant <PPPP> has it to be costed (MM02-MRP1 view) or exclude the
material status 01 : material from CK40N selection
Blocked for Procmnt/Whse
24
Messages (cont.)
Message Message
Class No.
CK 361 Value of costing item A component material in BOM has a Analyze data setup. Sometimes
00001 in itemization is 0 zero cost (quantity and / or price are there could be valid reasons to
too small) have items on BOM with 0.001
quantity (CS03) or price at 0.01
CK 380 No valid source of supply Missing Source List (ME03) Maintain Source List (ME01 or
could be found ME05)
CK 424 Material Missing Bill of Material even though Create Bill of Material, or
<MMMMMMM> plant proc type (MM03-MRP2 view) is "E" change the procurement type to
<PPPP> has no BOM In-House production "F" - External procurement
CK 465 No price could be Costing result was zero Maintain BOM if proc type in
determined for MM03-MRP2 "E" in-house
material/batch production; maintain purchase
<MMMMMMM> plant price if “F" externally procured
<PPPP>
CK 466 No price could be Missing price for activity AAAAA and Maintain activity price directly
determined for internal cost center CCCCC combination (KP26) or via activity price
activity <AAAAA> calculation (KSPI), verify price
<CCCCCC> (KSBT)
CK 468 No price could be Missing PIR (ME13) for Maintain PIR (ME11 / ME12)
determined for subcontracting, even though MM03- with subcontracting category for
subcontracting MRP2 view has Special Proct Type 30 the given valuation date
- Subcontracting
25
Messages (cont.)
Message Message
Class No.
CK 597 Costing items for material GL Account maintained in Create the cost element, or modify
<MMMMMMM> in plant configuration does not exist GL Account in MM-FI Account
<PPPP> without cost element. as a cost element (KA03) determination (OBYC) for GBB-VBR
CK 776 No valid source of supply Missing purchasing Create PIR (ME11) or modify PIR
found for material information record - PIR (ME12) for the given valuation dates
<MMMMMMM> plant (ME13)
<PPPP>
Category Transaction description Transaction code
Create Material Cost Estimate with Quantity Structure CK11N
Display Material Cost Estimate with Quantity Structure CK13N
Transaction Price Update: Mark Standard Price CK24
Individual
codes used Costing
Price Update: Release Standard Price CK24
Comparison of Itemization CK33
for costing Display Price Change Document CKMPCD
Reorganization of Cost Estimates CKR1
Edit Costing Run CK40N
Mass Delete Costing Run CK44
Costing Display Materials To Be Costed CKAPP01
Search for Price Change Documents CKMPCSEARCH
Analyze/Compare Material Cost Estimates: Results of Costing Run S_ALR_87099930
Analyze/Compare Material Cost Estimates: Price vs Cost Estimate S_ALR_87099931
Reports
Analyze/Compare Material Cost Estimates: Variances Between Costing Runs S_ALR_87099932
Analyze/Compare Material Cost Estimates: Cost Estimate List S_P99_41000111
26
Transaction Codes for Troubleshooting SAPinsight16
Costing Messages
Category Transaction description Transaction code
Material Master
Display Material MM03 MM / PP / CO related
Material List MM60 transaction codes for
Display Material BOM CS03
Explode BOM: Level by Level CS11 troubleshooting
Bill of Material
Explode BOM: Multilevel BOM CS14 messages during
Where-Used List: Material
Display Work Center
CS15
CR03
costing
Work Center / Display Resource CRC3
Resource Work Center / Resource List CR05
Assignment of Work Centers / Resources to Cost Centers CR06
Display Routing CA03
Display Rate Routing CA23
Routing / Recipe
Display Master Recipe C203
Production Version: Mass Processing C223
Maintain Source List ME01
Display Source List ME03
Source List
Generate Source List ME05
Source List for Material ME0M
Create Info Record ME11
Purchasing Change Info Record ME12
Information Record Display Info Record ME13
Info Records per Material ME1M
Cost Center Display Cost Center KS03
Accounting Master Display Cost Element KA03
Data Display Activity Type KL03
Set Planner Profile KP04
Change Cost Element / Activity Input Planning KP06
Display Cost Element / Activity Input Planning KP07
Cost Center Planning
Change Activity Type / Price Planning KP26
27 Display Activity Type / Price Planning KP27
Activity Type Price Report KSBT
SAPinsight16
Topics
Summary
28
SAPinsight16

 Cost objects and their uses:
 Production order: used to track product costs in discrete
manufacturing
 Process order: used to track product costs in process
manufacturing
 CO production order: can be used in any industry
 Product cost collector: used in repetitive manufacturing
 Internal order: used to collect, monitor, and settle costs for specific
project
 Plant maintenance order: used to track costs for maintenance
 Sales order: used to assign costs to a sales order
 Cost center: most widely used master data elements in controlling
29
Cost Objects: Prerequisites (Master SAPinsight16
Data), Order Type Used

 Production Order: Material Master, BOM, Work Center, Routing (Order category 10, Type PP01)
 Process Order: Material Master, BOM, Resource, Master Recipe. (Order category 40, Type PI01)
 CO Production Order: Material Master. (Order category 4, Type CP01)
 Product Cost Collector: Material Master, BOM, Work Ctr, Routing. (Order cat. 5, Order Type RM01)
 Internal Order: No logistics master data is necessary. (Order cat. 1, several order types available)
 Plant maintenance order: Work Center, Functional Location. (Order category 30, Type PM01)
 Sales Order: Sales and Distribution side master data. (Order category is not applicable)
 Cost Center: No logistics master data is necessary. (Order category is not applicable)
30
Cost Objects: Transaction Codes For SAPinsight16
Various Processes
 Configure order types, setup prerequisite master data (previous slide)
 Setup cost object data, perform transactions, carry out period-end closing steps
(WIP, Variance, Settlement, overhead calculation, template allocation, revaluation of activity prices)
31
SAPinsight16
Topics
Summary
32
Use Material Status to Control SAPinsight16
Logistics Transactions
 The material status determines how a material is handled (which
transactions are allowed / disallowed) in different applications and in
business processes like procurement, MRP, plant maintenance, costing,
forecasting, etc.
 Cross-plant material status maintained in the Basic Data view applies to all
plants, but Plant-specific material status (MRP1 and Costing 1) overrides
the status in Basic Data
 Material status and its attributes are defined in configuration transaction
OMS4
 Menu path: Tools  Customizing  IMG  SPRO Execute Project 
SAP Reference IMG  Logistics – General  Material Master  OMS4
– Define Material Statuses
 Indicative list of material status (will vary based on business requirement)
 10 – Material under setup
 20 – Development phase
 30 – Commercial production
 40 – No production, deplete stock
 50 – Obsolete, deletion flag
33
Explanation of Material Status in SAPinsight16
OMS4
 Message flags in OMS4:
 Flag “A” (warning): A warning message
is returned when performing the
function
 Flag “B” (error): An error message is
returned when performing the function
 Flag “<blank>”: No message
(transaction is allowed)
 Example: when material status is 40
(No production, deplete stock)
production order should not be
allowed to be created anymore
 Flag “B” (error) is set for production
order in OMS4. Orders that are already
setup are not impacted, but new orders
cannot be created anymore.
 Inventory movement transactions are
allowed (warning message)
34
Impact of Material Status on Order SAPinsight16
Creation (Example)
 When material status is 10 (Material under setup) production order
should not be allowed to be created
 Flag “B” (error) is set for this combination in OMS4
 When a user tries to create an order from transaction COR1 or via
the MRP run, an error message will be returned
 When material status is 20 (Development phase) production order
should be allowed to be created, but with a warning message to the
user
 Flag “A” (warning) is set for this combination in OMS4
 COR1 / MRP run will issue a warning message
 When material status is 30 (Commercial production) production order
should be allowed to be created, with no messages
 Flag “<blank>” (no message) is set for this combination in OMS4
 When material status is 40 (No production, deplete stock) production
order should not be allowed to be created anymore.
 Flag “B” (error) is set for production order in OMS4
 COR1 / MRP run will issue an error message
35
Material Status Setup: Table T141 SAPinsight16
View / Explanation
• Indicative setup of material status, table T141 view, explanation of headers
• Overview of which transactions are allowed or disallowed for the given
material status and its corresponding business function
• Transactions impacted are listed in the bottom row
36
SAPinsight16
Topics
Summary
37
SAPinsight16
Resources
First Steps in SAP Controlling (CO) Expert tips to Unleash the Full
http://www.espresso-tutorials.com/Controlling_S0069.php Potential of SAP Controlling
http://www.espresso-tutorials.com/Controlling_0140.php
38
$5 Discount on the print version of both: M7CCMU4R
SAPinsight16
Resources (continued)
 Get answers to the top 9 SAP Controlling questions
 Several authors, Publisher: ERP Corp
 http://www.erpcorp.com/learn-more-about-controlling-2016-lp2/
 SAP Note 1751885: ALLOCATION-Description of

database selection methods)
 support.sap.com
 Start a free trial to the SAP eBook Library!

 Get access to more than 50 SAP books and video tutorials.
 http://free.espresso-tutorials.com
39
SAPinsight16
Key Ideas
 Leverage FI, CO and MM period locks for smooth
financial close
 Schedule jobs to Automate WIP, Variance,
Settlement
 Optimize performance of cycles using allocation by
segment
 Review message categories to troubleshoot costing
messages
 Evaluate cost objects, prerequisites, order types,
transactions
 Use material status to control logistics transactions
40
SAPinsight16
Questions
 sampat_ashish@hotmail.com
 ashish.sampat@vthinkinc.com
 https://www.linkedin.com/in/sampatashish
Q&A
41

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SAPinsight16

Enhance the Productivity of

Synchronize FI, CO, MM Periods

OB52 – Explanation of FI Period Lock

OKP1 – Controlling (CO) Period Lock

Frequency, Mode of Execution

Using Batch Jobs

What to Watch Out For

Cost Allocation Methods

Distribution Versus Assessment

Product Costing Messages

Product Costing Messages

Evaluate the Right Cost Object For You

Data), Order Type Used

 SAP Note 1751885: ALLOCATION-Description of

 Start a free trial to the SAP eBook Library!

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