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SAP S/4 HANA : CO Product Costing flow for ETO Scenario
Rating: 4.3 out of 5(28 ratings)
134 students

SAP S/4 HANA : CO Product Costing flow for ETO Scenario

ETO - Product Costing flow for Engineer-to-Order production-Production Process using Projects ,WBS Elements and Networks
Created byKaranam Sreedhar : SAP S/4 HANA Controlling-Subject Matter Expert
Last updated 8/2023
English
English [Auto],

What you'll learn

  • Step by step by configuration for Product costing
  • Step by step by configuration for Product costing with PS module relating to ETO scenarios
  • SAP CO: Product Costing flow for ETO Scenario with Production order
  • SAP CO: Product Costing flow for ETO Scenario without Production order

Course content

4 sections • 29 lectures • 8h 24m total length

  • Engineer to Order - Introduction12:55

    Explore engineer-to-order cost flows in SAP S/4 HANA: compare production order versus non-production order scenarios, including expense booking, variance calculation, settlement, result analysis, and profitability reporting.

  • Organizational Structure-mapping29:38

    Define the enterprise structure in the SAP system, including company code, plant, division, sales organization, distribution channel, purchasing organization, shipping point, factory calendar, and the mapping assignments.

  • Finance : Basic configuration settings28:10

    Configure SAP financial accounting, including general ledger and chart of accounts setup. Set field status variants, fiscal year and posting period variants, document types, and tax procedures for the Netherlands.

  • Business Partner: Customer & Supplier/Vendor's Number Range Configuration14:38

    Configure a single business partner number range to link customer and vendor accounts in SAP S/4 HANA. Define internal and external ranges and assign them to customer and vendor groups.

  • Material Management Basic Configuration of COPC16:21

    Explains basic material management configuration for COPC in SAP S/4 HANA, covering consumption based planning, purchasing, inventory management, valuation and account assignment, invoice verification, and logistics execution.

  • Production Planning module-Basic Configuration of COPC21:31

    Learn the basic COPC configuration in SAP S/4 HANA, covering MRP controller, production supervisor, work center, availability checks, scheduling, confirmation, and activity type formulas linked to process orders.

  • Controlling Area Basic-Configuration Settings32:55

    Configure a controlling area in SAP S/4HANA, linking company codes, defining ledgers and currencies, setting chart of accounts, physical variants, and version ranges for product costing and internal reporting.

  • FI-MM and FI-SD Integration - OBYC & VKOA Mapping33:01

    Explore fi-mm and fi-sd integration with obyc and vkoa mapping in SAP S/4 HANA, detailing GL account setup for procurement to pay, production, and sales cycles.

  • Profit center and Cost center Standard Hierarchy design8:56

    Design and implement profit center and cost center standard hierarchies within the controlling area, create master data and hierarchical groups across company code, plant, and material levels for internal reporting.

  • Cost component strcture-118:45

    Learn to design a cost component structure in SAP, breaking product cost into material, labor, and overheads with up to 40 components and price control options.

  • Cost component strcture-223:06

    Explore the cost component structure for product costing: define primary and secondary cost elements, link expenses to routing via activity types, and model indirect and r&d costs with costing sheets.

  • Costing Variant configuration17:45

    Understand costing variant concepts for sap s/4 hana co: standard, preliminary, and simultaneous costs, with variance settlement, valuation variants, quantity structure, and updates to the material master.

  • Variance and Settlement configuration15:25

    Learn how to configure variance and settlement in SAP S/4HANA, including allocation structures and settlement profiles, to support profitability analysis and product costing prerequisites.

  • Material Ledger Configuration and Production Startup functionalities17:40

    Learn how to configure SAP S/4HANA material ledger across company code, group and index-based currencies, activate actual costing, and set up production startup for ETO scenarios.

Requirements

  • SAP FI & CO-Product costing and little bit PS modules are required.

Description

Engineer-to-Order (ETO) product costing flow in SAP S/4 HANA, which is often associated with the Project Systems (PS) module due to its project-oriented nature.


ETO is a strategy where products are manufactured based on each specific customer's requirements. It involves unique designs and specifications for every order, requiring close integration of sales orders, design, manufacturing, and costing.

A) ETO Production Process with Production Order

  1. Project Creation: Upon receiving a sales order, a Work Breakdown Structure (WBS) element is auto-generated. This is achieved by having a standard project template with predefined WBS elements and networks.

  2. Design Phase: This includes designing the BOM (Bill of Material) and Routing, which lay out the materials required and the production steps, respectively.

  3. Production Order Creation: A production order is generated with reference to the WBS. This production order gets its BOM and routing from the ETO product.

  4. Goods Issue: Materials required for production are consumed. This process reduces inventory and books the costs to the production order.

  5. Activity Confirmation: The labor hours and machine hours used in the production process are confirmed, recording the actual time taken for each operation.

  6. Goods Receipt: Once the production is completed, the finished goods are received into stock. This results in capitalizing the finished product's cost.

  7. Variance Calculation: Differences between planned and actual costs are determined.

  8. Settlement: The costs accumulated on the production order are settled to the WBS element.

  9. Billing & Revenue Recognition: Once the product is delivered to the customer, billing is done. The revenue is captured at the WBS level.

  10. Results Analysis (RA) Key Calculation: Determines profit/loss by comparing the revenue against the costs.

  11. COPA Settlement: The profitability of the order is analyzed by settling the data to Controlling Profitability Analysis (COPA).

B) ETO Production Process without Production Order

  1. Project Creation: Similar to the above process, a WBS element is auto-generated upon receiving a sales order using a standard project template.

  2. Work Centers & Activities: Define work centers for different activities like machining, labor, etc.

  3. Goods Issue: Materials are issued directly to the WBS element, thereby reducing inventory and booking costs to the WBS.

  4. Activity Confirmation: Labor and machine hours are confirmed directly against the network activity.

  5. Results Analysis (RA) Key Calculation: Determines profit/loss by comparing the revenue (from billing) against the costs accumulated at the WBS element level.

  6. COPA Settlement: The profitability is analyzed by settling to COPA.

Conclusion: In ETO scenarios, the SAP Project Systems (PS) module's integration with Controlling (CO) and Logistics (LO) is crucial. Whether with a production order or without, it's essential to maintain transparency of costs and revenues associated with each project. SAP's ability to link these elements ensures accurate cost tracking and profitability analysis for ETO scenarios.

Who this course is for:

  • CPA , CMA , ACCA , CA , MBA , M Com, B Com students and Professionals, SAP FICO Consultants and End Users.

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