Enhancement Packages 5 & 6 – Where to find the business functions that matter for Controllers

© 2014 ERP Corp. All rights reserved.
Enhancement Packages 5
& 6 - Where to Find the
Business Functions That
Matter for Controllers
Janet Salmon
SAP AG

Introduction
3
• When SAP introduced the concept of Enhancement Packages
and the packaging of new functionality within business
functions, administrators were relieved that they would not
have to test everything when they upgraded. However, the
business functions are often hiding functionality that is
interesting and useful for a controller.
• In this session we will look at the following business functions:
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• FIN_CO_CCPLAN and FIN_CO_ORPLAN

Topics
• Enhancement Packages and Business Functions
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• FIN_CO_CCPLAN, FIN_CO_ORPLAN
• Summary
4
Start of first section:
List the main points in your presentation and insert this slide at
the start of each new topic. Move the highlighted box down for
each new section. This divides your presentation into easy to
follow sections.

The Birth of the Enhancement Package
5
• Quick Facts About SAP ERP 6.0
• Launched in June 2006
• Built on SAP NetWeaver 7.0
• More than 4,300 productive systems (as of Sept 2007)
• Platform upon SAP will deliver future software innovations
• Software innovations delivered via
‘SAP enhancement packages’
SAP NetWeaver
SAP ERP 6.0
Enhancement Packages

What Are Enhancement Packages?
6
• Optionally installed and activated software innovations for SAP
ERP 6.0
• Software innovations include
• UI simplifications
• Functional enhancements
• Industry specific capabilities
• Enterprise services
• Cumulative in nature: current enhancement packages contain
entire content of earlier packages
• Enhancement packages are not support packages

Mandatory
Optional
Support
Packages
Enhancement
Packages
• Content of enhancement packages
• Each SAP enhancement package contains several “business
functions”
• Each “business function” can be optionally implemented and
activated
• Optional Installation
• You install the parts that are applicable to your business.
• If installed:
• No UI or process change until a business function is activated
• Less Adjustment effort due to selective update of software
components
• No implications on the underlying NetWeaver platform, in
addition enhancement packages contain most current Support
Package Stack
• Optional Activation
• You activate the business functions you need
• If activated:
• End-user training is limited to the activated business function(s)
• Testing is simplified with templates, provided for every business
function
Improving the Software Lifecycle
7

SAP Innovation Discovery
https://service.sap.com/innovation-discovery
8

Innovation Search - Identify Interesting Innovations
9 Search Area
Innovation with or
without license
implications

Alternative: Transaction SFW5 (Switch Framework)
10
• Work with your system
administrator to
activate selected
functions
• Use the switch
framework to access
more information (e.g.
release notes, test
catalogs)

Links Take You to Further Information
Documentation &
Release Information
Test Catalogs
11

Topics
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
12
follow sections.

Parallel Accounting: Cost of Goods Manufactured
13
• Use the innovation
search to identify
the main product
features.
• You will probably
need to access the
feature details to
make a proper
decision.
• Two innovations
are important for
parallel
accounting.

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
14

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*
15

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
16

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 close,Periodic costing run only allows the inclusion of activity
prices in version 0
**
Controller/
Inventory
Accountant Inventory Accountant
Controller/
Inventory
Accountant
17

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 closeIn 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.
*
Controller/
Inventory
Accountant Inventory Accountant
Controller/
Inventory
Accountant
18

Parallel Accounting: Asset Accounting
19
• If you are
looking at
parallel
accounting in
controlling, then
you should
probably also
look at parallel
accounting in
asset
accounting,
especially if you
value assets
under
construction.

Parallel Accounting for Fixed Assets - Configuration
• Accounting principles
• Definition and naming of valuations
• Integration layer for sub ledgers and
feeding applications in accounting
• Depreciation areas
• Valuation decisions in FI-AA
• Asset valuation:
• Depreciation keys
• Useful life
• G/L account determination
• Valuation consistency
• Value and parameter only used within
same accounting principle
• Reconciliation between asset sub ledger
and G/L per currency:
• Mandatory assignment of
depreciation area per currency

Asset Acquisition Using Ledger Approach for Parallel
Valuation
• Different amounts to be capitalized per accounting principle
• Document entry:
31 K Vendor 160000 (Payable) 10.200
70 A Asset FIAA-1000-0 PRCTR1 KOSTL1
Financial Accountant
40 S GL 4xxxxxx (freight expense) 200
75 A Asset 13000 (Machines) PRCTR1 KOSTL1
LOCA (Local GAAP)
Freight costs are not capitalized in the
local GAAP (New Transaction: Posts
only to accounting principle LOCA)

Topics
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
22
follow sections.

Stock in Transit and Actual Costing
21
• These innovations
are independent.
• Stock in transit
does not need
Controlling or
Material Ledger
(only logistics).
• Cross-company
actual costing
requires material
ledger.

Stock in Transit for 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.
Cross-Company-Code Stock Transfer
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
*
22

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
23

Cross-Company-Code Actual Costing
• Delivered by Business Function: Cross-Company-Code Stock Transfer &
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.
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
* Improvements
Cost accountant company 1 Cost accountant company 2 Group controller and portfolio
manager
• Business Value
• 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
• Customer Business Challenges
• 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.
24

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
25

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,-
26

Comparison of Views
• 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
27

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
28

Screenshots in GV
31
• 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 TLV
32
• 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 (LV)
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
31

Topics
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
34
follow sections.

Operation Account Assignment
33
You may already have
encountered
operation account
assignment for
networks and
network activities.
Now the same choice
is available for
service and
maintenance orders.

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
34

OAA Order
• Indication using System Status
• 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.
35

OAA Order (cont.)
• 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.
36

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
• Operation overview report
• 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
38

Topics
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
41
follow sections.

WebDynpro Application for Cost Center Maintenance
42
Rolle
New WebDynpro
application to replace
KS01-03 allows
configuration to your
company‘s needs.

Configurable UI
43
Delivered WD
application
includes all fields
in table CSKS.
Configured WD
application
displays only
necessary fields.

WebDynpro Application for Cost Center Hierarchies
44
New WebDynpro application to replace OKEON and KSH1-3.

Inactive Versions
45
Existing groups have no
versioning concept. Now
you can create a new
hierarchy version in
anticipation of a change
and store the tree
structures prior to a
reorganization as an
inactive version.

Inactive Versions (cont.)
46
Choose between
versions in the
application and when
using Report Writer

Web Dynpro Application for Internal Orders
47
New WebDynpro application to replace KO01-04. Again,
consider removing fields in table AUFK that you do not
use.

Web Dynpro Application for Activity Types
48
• New WebDynpro application to replace KL01-03
• Again, consider removing fields in table KSLA that you do
not use

Topics
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
49
follow sections.

Projects: Overall Planning
50
Transaction CJ40
Webdynpro application
FCOM_IP_PROJ_OVERALL01

Projects: Cost Element Planning
51
Transaction CJR2
Webdynpro application
FCOM_IP_PROJ_COSTELEM01

Projects: Top-Down Planning
52
• New feature allows entry of planned data at group level e.g.
wages and salaries or raw materials

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
51

Query Adaptations
• Customers want to see:
• Actual values
• Plan values from other
years/versions
• Formula columns
• „Planning is like reporting
with editable columns“
54

Topics
• FIN_CO_COGM
• LOG_MM_SIT
• LOG_EAM_OLC
• FIN_CO_CCMGMT
• Summary
55
follow sections.

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
54

Resources - www.financialsexpertonline.com
57
• 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.)
58
• 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
• Martin Munzel, New SAP
Controlling Planning
Interface
• http://co.planning.espresso-
tutorials.com
59
• Janet Salmon, Controlling
with SAP – Practical Guide
• ISBN: 978-1-59229-392-6
• http://www.sap-
press.com/products/Controllin
g-with-SAP-%E2%80%94-
Practical-Guide.html

Five Key Ideas
• Use SAP Innovation Discovery to learn more about
Enhancement Packages, SAP Notes, and other innovations
• Talk to your administrator about turning on a business function
in your sandbox system
• 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
60

Questions
• Now:
• Ask questions now for immediate answers
• Later:
• Janet.dorothy.salmon@sap.com
61
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.

Enhancement Packages 5 & 6 – Where to find the business functions that matter for Controllers

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