Presentation on theme: "Inventory Valuation – Material Ledger Closing"— Presentation transcript:
1Inventory Valuation – Material Ledger Closing SAP Best Practices
2Purpose, Benefits, and Key Process Steps This document outlines the process of inventory valuation with the Material Ledger Closing at the end of the actual period. The Actual Costing/Material Ledger is legal requirement for Brazil and used to calculate actual product costs for each material at the end of the period end close.BenefitsCombines the benefits of Moving Average and Standard Price.Actual Costing.Both single-level settlement and multi-level settlement functions are available to calculate the actual material costs at period end close.Key Process StepsProduction and Process Order Variance Calculation.Calculating the Actual Cost based on variances settling.CO-PA Revaluation based on Actual Cost.
3Required SAP Applications and Company Roles Enhancement package 5 for SAP ERP 6.0Company RolesEnterprise ControllerProduct Cost Controller BRProduct Cost ControllerEnterprise Controller BR
4Detailed Process Description Inventory Valuation – Material Ledger ClosingDuring the period, each material movements are valued with a standard price and any variances from this standard are collected in the material ledger together with the preliminary valuation when invoices are received or orders settled. In other words, Material Ledger serves for recording the real costs of externally procured materials and materials produced in-house and at the same time it takes into consideration and records all factors effecting price fluctuation.At the end of the period, during the material ledger closing process the variances collected during the period are used to calculate the actual price for the materials and postings are made in the FI to reflect this price.
5Prerequisite Process Steps Process Flow DiagramPrerequisite Process StepsEventUpdatingMaster DataPreliminary Cost EstimateCreate and Schedule JobPostingEnterprise Controller BRRunning Actual Costing SplittingRunning Actual Price CalculationProduct Cost ControllerProduction and Process Order Variance CalculationSettling VariancesProduct Cost Controller BRCosting Cockpit: Actual CostingEnterprise Controller BRCO-PA Revaluation
6Legend Symbol Description Usage Comments Symbol Description Band: Identifies a user role, such as Accounts Payable Clerk or Sales Representative. This band can also identify an organization unit or group, rather than a specific role.The other process flow symbols in this table go into these rows. You have as many rows as required to cover all of the roles in the scenario.Role band contains tasks common to that role.External Events: Contains events that start or end the scenario, or influence the course of events in the scenario.Flow line (solid): Line indicates the normal sequence of steps and direction of flow in the scenario. Flow line (dashed): Line indicates flow to infrequently-used or conditional tasks in a scenario. Line can also lead to documents involved in the process flow.Connects two tasks in a scenario process or a non-step eventBusiness Activity / Event: Identifies an action that either leads into or out of the scenario, or an outside Process that happens during the scenarioDoes not correspond to a task step in the documentUnit Process: Identifies a task that is covered in a step-by-step manner in the scenarioCorresponds to a task step in the documentProcess Reference: If the scenario references another scenario in total, put the scenario number and name here.Sub-Process Reference: If the scenario references another scenario in part, put the scenario number, name, and the step numbers from that scenario hereProcess Decision: Identifies a decision / branching point, signifying a choice to be made by the end user. Lines represent different choices emerging from different parts of the diamond.Does not usually correspond to a task step in the document; Reflects a choice to be made after step executionSymbolDescriptionUsage CommentsTo next / From last Diagram: Leads to the next / previous page of the DiagramFlow chart continues on the next / previous pageHardcopy / Document: Identifies a printed document, report, or formDoes not correspond to a task step in a document; instead, it is used to reflect a document generated by a task step; this shape does not have any outgoing flow linesFinancial Actuals: Indicates a financial posting documentBudget Planning: Indicates a budget planning documentManual Process: Covers a task that is manually doneDoes not generally correspond to a task step in a document; instead, it is used to reflect a task that is manually performed, such as unloading a truck in the warehouse, which affects the process flow.Existing Version / Data: This block covers data that feeds in from an external processDoes not generally correspond to a task step in a document; instead, this shape reflects data coming from an external source; this step does not have any incoming flow linesSystem Pass / Fail Decision: This block covers an automatic decision made by the softwareDoes not generally correspond to a task step in the document; instead it is used to reflect an automatic decision by the system that is made after a step has been executed.Diagram Connection<Function>External to SAPHardcopy / DocumentFinancial ActualsBusiness Activity / EventBudget PlanningUnit ProcessManual ProcessProcess ReferenceSub-Process ReferenceExisting Version / DataProcess DecisionSystem Pass/Fail Decision