SD – Tax Determination
& Tax procedure
SD is responsible for
determining the taxability of the transaction base on the customer(ship to
party) and material tax classification (plus whatever other criteria you
want to configure into the system). The end result of this determination is the
tax code which is defined in FI.
- The tax code, country and
other necessary info is then sent to FI which in turn goes through its own tax
procedure to determine the tax rate. This is then returned to SD.
- SD then uses the tax rate to
calculate tax amount in the order/invoice
So MWST in SD determines tax
code, MWAS in FI determines the tax rate. The common link between the SD
pricing procedure and FI tax procedure is the account key.
OBQ1 – Condition type, OBQ2
– Access sequence OBQ3 – Tax procedure, OBBG – Assign country to
tax procedure
The access sequence
enables the system to access the data records in a sequence until it finds a
valid price.
Condition type: is used
for different function, in SD is price, discount etc.
Tax procedure: Specifies
the conditions that are allowed for a document and defines the sequence in
which they are used.
OVK3 – Define customer
tax category – tax category and tax classification
Tax category: Identifies
the condition that the system uses to automatically determine
country-specific taxes during pricing.
Tax Classification: Specifies
the tax liability of the customer, based on the tax structure of the customer's
country. Tax classification to specify, for example, whether a customer is
liable for sales taxes, such as VAT or state sales taxes.
If prices not determined correctly check
the analysis in the SD condition setup
Based on the combination
"Assign sales organization - distribution channel - plant".
SD account determination
Customer/payer – Customer group
maintained in customer master, sales office, currency
Material master - Acct
assignment grp will be there in Sales org 2.
Item category group NORM: requirement
type, revenue recognition, whether its FOC etc is there in Item category.
The provision account
is only required if there are conditions that are relevant for accrual, for
example, rebate conditions. If this is the case, account determination takes
place in the billing document with the field.
Revenue recognition:
calculated based on Item category, which have time based, billing, service
based. Revenue recognition process
is used if we want to recognize revenue other than at the time of posting
billing document. (example: 40134569 RR1).
Specific industries like
construction/services etc where revenues will get recognized based on
percentage of completion of the project as an example – Paid upfront
Def Reve: Reven recog later
goes to def revenue. Unbilled account:
Recognized periodically but billed later goes to unbilled rev A/C.
Customer B/S Debit Dr to Def
revenue account Cr (billing)
Def revenue account Dr to Sales
revenue credit
Config OVUR (recon a/c 1120000
or1190001, Un billed (1120007)
Consignment: Consignment
fill up(KB)/631, consignment issue (KE)/632, consignment Return (KR), Consignment
pickup (KA).
Consignment fill-up only moment
of goods no FI document for Delivery and not billing at-all.
Consignment issue delivery and
billing.
As per standard SAP Credit
check applies at consignment issue level
Rebate: 1215102
(VBO3), Billing (VF03) 4002184260, VA03 (6173777115), VBOF (settlement)
Rebate agreement, sales order,
delivery, billing (will be updated with rebate condition), accounting document
Customer dr to revenue credit, rebate dr to rebate accrual
Rebate process: VBO2
Accrual we can add additional
accrual (here we can increase or decrease) if needed
rebate dr to rebate accrual
Final settlement or partial
settlement or pay: Rebate Dr to Customer
Cr, rebate accrual to rebate.
Credit Management: When you are
creating order document all the credit relevant line items are summed up to calculated
sales order credit value. SAP then searches the credit exist in exposure from
payee account by looking into the credit master record for payer and adds from
sales order to the existing credit exposure to calculate credit exposure value.
The credit exposure value then compared with credit limit available at payer
and accordingly SAP block or approves the credit check and updates the credit
status at header level of the sales order.
Currency level and Credit control
area level (ob45)
Credit limit
Credit limit used %
Receivables
Special liab
Sale value
Credit exposure
Receivables
Sale Value
Credit exposure: Update function
in cca will update the credit exposure based on special liab+oprec+open
order+open billing (if update is blank=open ar and open spl gl items)
Risk category
Credit rep group
Cust cred group
Open order
Open delivery
Open bill doc
Sales value
DSO – Day sale outstanding (AR/Total
credit sales) *Number of days
Define credit control area (OB45):
Assign CCA to Company code and
Sales area (Sales org & dis channel& division)
Define permitted CCA for
Co.code; It acts like alternative
control area for specific customer.
Define credit risk categories:
The credit
risk category controls all credit checks.
Define credit group: Represents
business transaction where credit check can be applied.
Assign credit groups to sales
documents and delivery documents.: Here we assign credit check (set warning, error and block delivery) and
credit for order type and delivery types
Determining active receivable
per item category. – This setting is useful to calculate the net order
check value relevant for credit
check (line items of the sales order based on the item category.
Credit check in SAP are
performed against a payer partner after accumulating all necessary financial
figures, open order, open delivery, open billing documents.
Simple Credit check (open AR
and open items from GL, order value) – warning, error or delivery block.
Automatic – robust - we maintain rules to perform the credit
check.
Static (open order and
delivery), dynamic (time horizon), document values, critical fields( Payment terms,
fixed value and additional value are critical value fields), next review date (credit
information is old), based on the open item time line, oldest open item, level
of dunning made
Product costing
Cost planning – cost estimate,
how goods are valuated and financial posting
Actual costs – How actual
costs are managed during manufacturing.
For external accounting – Value
our inventory in our balance sheet, how to calculate cost of goods sold.
Internal planning – cost on manufacturing
the goods & whether actual cost is higher or lower than planned cost.
Costing with quantity
structure [BOM+ROUTING/Master recipe (process industry)] – Direct cost
Overheads – manufacturing overheads
(Dep/energy cost/build main/mangt sal/sal) – cost of goods manufactured. Indirect cost – Admn expenses (Cost of goods
sold).
KP06, KP26, KP46, KSVB, KSUB,
KSS4, KSPI, KZS2, CK40N
Activity type: SAP mechanism to cost the operations
performed in a work center. SAP methodology to calculate work center
activities, most notably labor & burden
Work center
Routing:
Costing Sheets –
Alternative method to apply overhead, typically within an assembly or kitting
process where labor hours as a factor of overhead is not necessary.
Special Procurement Type
Costing (SPTC- Carry cost) and SPT(procure or manft): Key on material master that further
defines the quantity structure used to calculate costs, including the ability
to pull costs from other plants. In costing tab 1 and MRP2.
The transfer control indicator specifies
which existing cost estimates you want to use for materials in the product
structure.
No purchase orders, work
orders or sales orders should be placed until cost standards are released. There is no system design to stop these
activities. (Status 15 enhancement prevents
Goods Movements.
Cost Component Split –
this represents categorization of standard costs based on the quantity
structure setup.
CO PA Value Fields – The
standard costs are also stored at a more aggregate level in the CO PA module
for reporting purposes.
The Material origin
indicator enables detailed variance analysis to be carried out in Cost Object
Controlling.
The origin group
enables you to separate materials that are assigned to the same cost element,
allowing them to be assigned to a unique cost component. This allows
Controlling to create a more detailed breakdown of a cost element than is
necessary in Financial Accounting. Origin
group can also be used when determining the calculation base for overhead.
The costing lot size is defaulted to
price unit if left blank. Costing lot size plays a critical role if you pull
your standard costs from PIRs (purchase info records) or for costing of setup
time.
The plant-specific material
status restricts the usability of the material for the plant concerned, that
is, it defines whether a warning or error message is displayed if you include
the material in a particular function.
Internally manufactured
product: BOM – required, Routing (optional – warning), Procurement type on
the MRP 2 view is E (manufactured), SPTC (Special procurement costing key) must
be 52.
Subcontracted Material:
BOM, Subcontract type PIR (Purchase Info Record), Special Procurement type on
the MRP 2 view is 30 (Subcontracting) so the cost run looks for a BOM and
subcontract PIR. (SPTC = blank).
Over-labeled product: BOM
Procurement type on the MRP 2 view is E (manufactured) or X (either)
Routing not required – since
there is minimal cost to convert this product. A material to material transfer
is used instead of a production order.
A Routing or
task list is a description of which operations (process steps) have to be carried
out and in which order to produce a material (product).
External processing (outsource
specific operation): Mark the operations for orders to be processed
externally with a corresponding control key (ZP05 or ZP15).
Subcontracting: Used
to outsource an entire manufacturing operation.
“Part A” or multiple components are sent out to a vendor to be
manufactured into “Part B”.
Costing variant: Key that determines how a cost
estimate is calculated.
Costing type: Technical attributes of the cost estimate, field
in the material master record the costing results can be transferred to
Valuation variant: Parameters required for valuation of a cost
estimate, (Material, activities, subcontract, external processing, cost sheet)
Date control: Costing date from/to is the validity
period of the cost estimate. Quantity structure date the selection date for
determining the BOM and routing. Valuation date - the pricing date for the
materials and activities.
Quantity structure control: Control
which BOM and routing to be used.
Transfer control: Transfer
Control determines which lower level components or intercompany materials costs
are used for costing
Cost estimate: CK22 (marking) CK11N (Cost estimate)
CK13N( analyse result), CK40N is recommended even for one material, CK24 (mark
and release)
Cost component structure: In Product Cost Controlling, the cost component
structure determines how the results of material costing are updated.
Cost component split groups the cost elements into cost
components. When a multilevel structure is costed, the cost component split is
rolled up so that the original identity of the costs is retained for analysis.
Roll up: Cost rolled to next highest level, Additive
cost (CK74N) identified as V & cost element
In costing estimate sheet prices are differentiated
by item category
Period end activities
Assessment/Distribution, cost centre split, actual
activity price allocation, Revaluate actual prices for orders/collectors
Revaluation is the process of collecting variances (over/under
absorption) from manufacturing cost centres and allocating these variances back
to production orders so that total manufacturing costs are included in the
production order variances and WIP (actual quantity * Plan cost)
Calculate Actual Overhead
Calculate WIP
Display and Delete WIP Log
Calculate Variances
Order Settlement
Cost splitting: example Sal/Dep/Elec total cost is 400000 and
activities labour, and machine hours is 1500
Here we want to consider sal with labour and dep/elec
with machine – for this we create splitting structure. Once we execute KSPI
(plan) will be allocate the hours and same process KSII for Actuals
WIP – Cutoff date (till when
you have already calculated to protect the old date)
Discrete Production
Order Status DLV or TECO – order balance is moved to manufacturing
variance
Other statuses – order balance
is moved to WIP.
In repetitive
manufacturing the order status does not have the same implications. Variances and WIP are calculated on the basis
of target costs and it is possible for a repetitive order to have both
WIP and variances.
Journal Entries
1. Consumption Dr to Inventory Cr 2. Overhead postings are in
CO 3. FG Inventory Dr
to Manft output/ Cost of Prod Cr 4. WIP Stock A/cBalance sheet A/C.Dr to Change in WIP P/L A/C
.Cr (reversed with once production is completed) 5. Variance will be posted – Manft output variance
(Pr Ord) Dr to Mfg Variances. (variance posting is Variance + SCRAP)
Version: Version
0: Actual Cost vs. Target Cost, Version
1: Actual Cost vs. Plan cost, Version
2: Plan Cost vs. Target cost
Scrap deviation from
production order quantity structure is settled to manufacturing variance, if it
is stock locations charged to P&L.
Assembly scrap – Fert (MRP1)
If a component
scrap of 10% is maintained for the material component ROH (MRP 4) or in the
BOM.
Operation
scrap: BOM
Variances
Scrap variance: Assembly
Input price & quantity variance:
target variance (how much supposed to incur) (includes component scrap)
Resource variance: Arrived because
of using items which are not part of resource planning.
Output variance: arise due to change
is Material master price
Lot size: change due change in
lot
Remaining: other variance which
are not classified in all above.
Product cost collector (Plant:
1046
RA Key: valuation of the order during period-end
closing.
Electronic Bank statement:
Account symbol: The
posting details contain account symbols instead of accounts.
Assign accounts to
account symbol, Account modification – Keep blank or mask it, posting to
a differentiate bank subaccount instead of a standard one example (AMEX, Visa,
Master etc)
Posting rule: specifies
the rules for posting in the general ledger and subledger.
Define the posting rules:
(Posting area) Here we define the Bank accounts and subledger account.
Create transaction type:
Group together the bank accounts. (acts a reference for external transaction type)
External transaction type:
external transaction type identifies the business transaction, which is available
in the bank statement and same we maintain in the configuration.
Interpretation logic: Enables
to find separate outgoing payments using reference information provided by bank.
Search string: It is
additional option to clear the document provided by SAP, woks on reading “note
to payee” section and helps to change the posting rule. Using
search string we can pass specific string (e.g. reference number) from
electronic file to assignment field in line item of “Wires/Check in clearing”
account. This value in assignment field in line item of “Wires/Check in
clearing” account can be useful in setting up automatic clearing of
“Wires/Check in clearing” account.
Lock Box:
Control parameters: Format
of, record length, posting per bank account.
Define Posting Data: routing
details sources needs to be mapped as per the file, Company code, house bank,
Account ID, bank gl account, document type and bank details.
Lock box account: here
we define company code, lockbox, house bank and lockbox number.
General ledger posting:
Bank Incoming clearing account A/c Dr to Unapplied Cash Cr.
Subsidiary ledger posing:
Unapplied cash A/c to Customer Cr.
While clearing the system uses
sequence, document number and ref number.(AVIK and AVIP table)
Applied: system able to
find customer and customer open items. Partially applied: clearing applies
to partial i.e., 4 invoices out of 5 invoices. On account: the
unidentified open item will be posted against the on-account and post processing
clear the open item.
Additional config needed for OBXL.
FBL1 to import and FBL2 –
process (dolphin program)
Asset Accounting
Chart of depreciation:
The chart of depreciation enables you to manage all rules for the valuation of
assets in a particular country.
Depreciation area:
Depreciation Areas are used to calculate different values in parallel for the
same asset. This may be required for legal requirement, management report, cost
reporting etc. The Depreciation Areas help us to manage assets with different
depreciation terms i.e. depreciation key, useful life, expired useful life.
Can create real depreciation
or derived depreciation - Once real depreciation is activated, we can turn it
to derived depreciation. Derived dep
takes input from real depreciation areas
Parallel ledgers in
asset accounting for different valuations as per different accounting
principles. In our scenario, company code AIPL (Hindustan Mills Ltd) follows two
accounting principles that is US GAAP and Indian GAAP. In General
Ledger accounting we have created ledgers for each GAAP i.e. leading ledger
‘0L’ for US GAAP and Non-leading ledger ‘X1’ for Indian GAAP. In asset
accounting, we use master area i.e. area 01 for leading ledger valuation. For
valuation of non-leading ledger, we create one separate real depreciation area
and one derived depreciation area for each accounting principle so that the
values of Asset Accounting and General Ledger Accounting can be reconciled.
Assign Chart of
Depreciation to Company Code: once COD can be assigned to any number of company
codes.
In AO90, for non…leading
ledger GL will derived from leading leger if we don’t specify GL in non-leading
ledger.
Account determination:
Stored in Asset class and used as carrier to post financial in GL
Asset class: classification
of asset for legal and management requirement.
Manage historically: once
the asset deactivates then you cannot find any transactions relating to the
asset in the report AR01.
Depreciation key: Combination
for below dep methods dep key is created and assigned in the asset classs.
Base Method: Here we
define type of depreciation (ord, spl, tax), method (useful life, stated
percent etc)
Curb:
Specifies
that the system should calculate depreciation after the planned useful life has
expired
Declining balance: here
we define the multiplying factory, max and min dep.
Multi-level method:
Here we define straight line or declining balance methods, %
Period control: Here we
define start date, of dep during acquisition, addition, retirement.
Below two are additional information
purpose – above are mandatory sequences.
Maximum amount: Max amount
that is not allowed to be exceeded before a certain calendar date.
Unit-of-production
depreciation (refer dep key STCK) - (Net book value/remaining units) * period
unit [net book value = APC value-monthly dep).
Journal entries
Acquisition: Asset Dr to Asset
clearing account credit
Dep: Dep Dr to Acc dep Credit
Writeup: Accum dep to Depreciation
Sale with revenue: DR Acc dep
Dr (total dep) & Sale of asset [] CR Asset (acq value) & Profit on
asset
Scrap: Asset Loss/Scrap Debit
& accum dep to Credit asset account (acq value)
Transfer: DR new Asset, DR Accumulated
dep (old asset) & CR Old asset, CR Acc dep new asset.
Intercompany transfer: DR Acc
dep & I/C transfer to Asset Account, Dr Acq asset to acc dep & I/C tranfr
Asset Revaluation: Due
to inflation in value of currency or changed replacement. It is necessary to
revaluate fixed asset upward (or) downward.
Use index series, cumulate
adjustment can periodically revalued, one time or periodic revaluation of FA.
Asset value 1000000 1200000
Dep 25000 72000
NBV 975000 1128000
Reval 900000 (dec) 1300000 (inc)
Change 75000 172000
Acc dep Dr 25000 Acc
dep DR 72000
To asset Cr 25000 Asset
Cr 72000
Loss on reval Dr 75000 Asset
reval Dr 172000
Asset revaluation Cr 75000 Gain
on reval Cr 172000
Asset takeover
1. End of the year or 2. Mid
of the year
End of the year: legacy
transfer date: 31/12/2019, last dep posted will be blank – here the upload will
be only Acc dep and
Journal entry: DR Ass
acq, CR Accm Dep & FA Clearing (conv)
Middle of the year: legacy
transfer date: 31/10/2019, last dep posted will be period 10 year 2019 – here the
upload with be Depreciation till it was posted in legacy, acc dep, acq value
DR Ass acq, CR Accm Dep & FA
Clearing (conv) after that we need to run the depreciation.
NEW GL
Document splitting:
Split the documents on specified dimensions/characteristics (profit center is specified
dimension) (general ledger view)
Passive Splitting –
This type of splitting is mostly occurs when the payment transaction is posted
for a vendor invoice. Now system splits the payment document bases on how the
vendor invoice was split in place already.
Active Splitting – In
Active Splitting the document is split according to predefined rules. SAP
almost supports all the business process transactions but if it doesn’t suit to
any requirement the own splitting rules can be created.
Zero Balancing Splitting
– When the amounts within financial documents are not able to balance out to
Debit of Profit Centre and Credit of Profit Centre which does not Net Off as
its own, SAP then automatically generates new line item to balance the document
Classify the GL in item
category (B/S, expenses, Revenues), classify the document types, maintain
zero balance clearing account.
Splitting method:
states how to split the document
Splitting rule: combination
of splitting method, Business trans, bus transaction variant and inturn derives
the account assignment. (Business Transaction
Variant – In SAP, financial postings derive
the item category for individual line item. Business transaction variant always
works in conjunction with business transaction where business transaction
restricts the business processes to be posted to. System validates a check all
postings against the item category to validate if these postings are allowed by
splitting rule if not then understand this failed)
Inheritance logic: Inheritance
means when customer invoice is created, from a revenue line, (business area or
segment) are projected (inherited) to the customer and tax lines in the general
ledger view.
Constants: Acts
like a default, replace all account assignments that could not be derived from
the posting with a "constant value.
