FICO Integration with Logistics: Process Flows,

Accounting, and Valuation Simplified

Saugata Ghosh
PwC
Produced by Wellesley Information Services, LLC, publisher of SAPinsider. © 2016 Wellesley Information Services. All rights reserved.
In This Session

• In this session, you will enhance your understanding around:

 Various logistics scenarios

 Step-by-step process flows

 FICO integrations

 Accounting and Valuation

Simple Finance (Add-on for Business Suite on HANA) or S/4HANA Finance simplifies the
underlying table structure. However, the business process flows remain unchanged.

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What We’ll Cover

• End-to-End Scenario Overview

• Key Process Flows with Accounting
• Preliminary and Periodic Valuation
• Wrap-Up

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What We’ll Cover

• End-to-End Scenario Overview

• Key Process Flows with Accounting
• Preliminary and Periodic Valuation
• Wrap-Up

3
Make-to-Stock Scenario - Overview
Order To Cash

Incoming
Sales Delivery
Billing Payment
Order PGI
(Customer)
Procure To Pay

Purchase Goods
Outgoing
Requisition Purchase Receipt Invoice
Payment
(Raw Order (Raw Receipt
(Vendor)
Materials) Material)
Production Planning

Operation Confirmations
Planned
Planned Issue Finished Prod.
Order Prod. Internal External Variance
Ind. Raw Goods Overhead Order
(Finished Order Activity Activity Calculation
Req. Material Produced Settlement
Goods)

Period-End Process
• “Strategy Group” in Material Master determines the scenario
Accounting Impact

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Make-to-Order Scenario - Overview
Order To Cash

Sales Order/ Incoming Sales

Delivery Order
Customer Billing Payment
PGI Settlement
Requirement (Customer)
Procure To Pay

Purchase Goods
Outgoing
Requisition Purchase Receipt Invoice
Payment
(Raw Order (Raw Receipt
(Vendor)
Material) Material)
Production Planning

Operation Confirmations
Planned
Issue Finished Prod.
Order Prod. Internal External Variance
Raw Goods Overhead Order
(Finished Order Activity Activity Calculation
Material Produced Settlement
Goods)

Period-End Process
• “Strategy Group” in Material Master determines the scenario
Accounting Impact

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What We’ll Cover

• End-to-End Scenario Overview

• Key Process Flows with Accounting
• Preliminary and Periodic Valuation
• Wrap-Up

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Key Business Processes

Procurement of Stock Item Procurement of Non-Stock

Procurement of Services
(Inventory) Item
Procure to Pay
Stock Transfer
Cross-Company Procurement Subcontracting
(Intra- and Inter-Company)

Production Make to Stock Make to Order

Scenarios where Scenarios where

Cross-Company Sales
Sales Order is NOT Cost Object Sales Order is Cost Object
Order to Cash

Third-Party Sales Free of Charge/Samples Consignment

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Account Determinations - Quick Recap

Material Accounts
Limited Perceived Value of Financial Planning Revenue Accounts
Limited Perceived Value of Financial Planning

SAP-Provided Parameters Commonly Used Parameters

• Chart of Accounts • Chart of Accounts
• Debit/Credit • Sales Organization
• Transaction Keys for differentiation by transactions • Acct Assignment Group of Materials
• Account Modifier for differentiation of the “offsetting entry for inventory • Acct Assignment Group of Customers
posting” based on Movement Types • Account Key linked with Pricing Conditions
• Valuation Class for differentiation by group of Materials • Sales Order as Cost Object vs. Sales Order not Cost Object
• Valuation Modifier for further differentiation by Plants

Sales and Use Tax Accounts

Limited Perceived Value of Financial Planning Finance Process Accounts
Limited Perceived Value of Financial Planning

SAP-Provided Parameters SAP-Provided Parameters

• Chart of Accounts • Chart of Accounts
• Debit/Credit • Debit/Credit
• Transaction Keys for differentiation by Tax Types (e.g., MWS output tax) • Transaction Keys for differentiation by transactions (e.g., Cash discounts
• Tax Code (Linked with Country/Tax Procedure) received, Cash discount allowed, Bank charges, etc.)

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Procurement of Stock Item
Scenarios
• Procurement of inventory items
• Example: MAP, Purchase Order = $100, Freight = $10, Vendor sends invoice for $125, Early payment discount = $5
Procure To Pay

Purchase Outgoing
Purchase Goods Invoice
Requisition Payment
Order Receipt Receipt
(Raw Material) (Vendor)

Accounting Documents $ Accounting Documents $ Accounting Documents $

FI Dr. Inventory-RM (BSX) 110 FI Dr. GR/IR Clg. (WRX) 100 FI Dr. AP (Vendor) 125
Cr. GR/IR Clg. (WRX) 100 Dr. Freight Clg.(FR1) 10 Cr. Bank Clearing 120
Cr. Freight Clg.(FR1) 10 Dr. Price Diff (PRD) 15 Cr. Discount Received 5
Cr. AP (Vendor) 125
CO NA
CO Dr. Price Diff 125 CO Cr. Discount Received 5

• Key Decision: Whether to implement “GR-based IV” for ensuring 3-way Match as recommended for control
• For Goods Receipt, if Material is valued at Standard Price, the difference with PO Price goes to Price Difference
• For Invoice Receipt, if Material is valued at Moving Average Price, the difference between PO Price and Invoice is posted to Inventory to the
extent inventory is available in stock. Else, the difference is posted to Price Difference.
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Procurement of Non-Stock Item
Scenarios
• Procurement of direct charge material items like consumables, stationeries, etc.
• Example: Purchase Order = $100, Vendor sends invoice for $125, Early payment discount = $5
Procure To Pay

Purchase Outgoing
Purchase Goods Invoice
Requisition Payment
Order Receipt Receipt
(Consumable) (Vendor)

Accounting Documents $ Accounting Documents $ Accounting Documents $

FI Dr. Consumption (From Purch.Order) 100 FI Dr. GR/IR Clg. (WRX) 100 FI Dr. AP (Vendor) 125
Cr. GR/IR Clg. (WRX) 100 Dr. Consumption 25 Cr. Bank Clearing 120
Cr. AP (Vendor) 125 Cr. Discount Received 5
CO Dr. Consumption (From Purch.Order) 100
CO Dr. Consumption 25 CO Cr. Discount Received 5

• Account assignments for Purchase Orders. (K – Cost Center, F – Order, P – Project/WBS, C – Sales Order)
• Key Decision: What Account assignment meets your business requirements
• Key Decision: Whether to implement “GR-based IV” for ensuring 3-way Match as recommended for control
• For Invoice Receipt, the difference between PO Price and Invoice Price is posted to same Consumption account
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Procurement of Services
Scenarios
• Procurement of services like Professional fees, Audit Fees, etc.
• Example: Purchase Order = $100, Vendor sends invoice for $125, Early payment discount = $5
* Optional
Procure To Pay

Purchase Outgoing
Purchase Service Invoice
Requisition Payment
Order Entry Sheet Receipt
(Services) (Vendor)

Accounting Documents $ Accounting Documents $ Accounting Documents $

FI Dr. Expense (Acct Assn. in PO) 100 FI Dr. GR/IR Clg. (WRX) 100 FI Dr. AP (Vendor) 125
Cr. GR/IR Clg. (WRX) 100 Dr. Expense 25 Cr. Bank Clearing 120
Cr. AP (Vendor) 125 Cr. Discount Received 5
CO Dr. Expense (Cost Object in PO) 100
CO Dr./Cr. Expense 25 CO Cr. Discount Received 5

• Key Decision: Use of Service master is optional but advantageous. As an alternate use “Text” in Purchase Order.
• Key Decision: Whether to implement “Service Entry Sheet” for ensuring 3-way Match as recommended control
• For Invoice Receipt, the difference between PO Price and Invoice Price is posted to same Expense account

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Procurement - Cross-Company Purchase
Scenarios
• Centralized procurement
• Inventory PO where “Receiving” Plant belongs to another Company
• Account assigned PO where assigned object (Asset/Cost Center/Order/Project/etc.) belongs to another Company
Example of Inventory PO:
Accounting Documents Accounting Documents
(Cross-Company Doc.)
FI Dr. Inventory (BSX)
Cr. GR/IR Clg. (WRX) FI Dr. GR/IR Clg. (WRX)
Cr. AP (I/C Vendor)
Receiving
Company

Goods
Receipt

Purchase Outgoing
Procuring
Company

Purchase Invoice
Requisition Payment
Order Receipt
(Raw Material) (Vendor)

Accounting Documents
(Cross-Company Doc.) Accounting Documents
FI Dr. AR (I/C Customer) FI Dr. AP (Vendor)
Cr. AP (Vendor) Cr. AP (I/C Vendor)
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 Subcontracting
Scenarios
• Purchase Order: Components sent to vendor, who performs manufacturing/assembling and sends back finished goods. Bill of
Material can be used in Purchase Order.
• Manufacturing Order with Subcontracting Activity: Operations being performed by subcontracting vendor
Example of Subcontracting Purchase Order:
• Moving Average Price of RM = $100, Standard Price of FG = $130, Subcontracting Charges = $25
Procure To Pay

Subcontracting Goods Issue Goods Receipt Invoice Receipt Outgoing

Purchase Order RM/Components Finished Goods (For Charges) Payment
To Vendor (541) From Vendor (543) (Vendor)

Accounting Documents $
Accounting Documents $
FI Dr. Inventory-FG (BSX) 130
FI Dr. GR/IR Clg. (WRX) 25 Accounting Documents $
Cr. COGM-FG (BSV) 130
Dr. Consumption-RM (GBB-VBO) 100 Cr. AP (Vendor) 25 FI Dr. AP (Vendor) 25
Cr. Inventory-RM (BSX) 100
CO Cr. Bank Clearing 25
Dr. Subcont. Charges (FRL) 25
CO
Cr. GR/IR Clearing (WRX) 25
CO Cr. COGM-FG 130
Dr. Consumption-RM 100
Dr. Subcont. Charges 25

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 Stock Transfer - Intracompany
Example: Plant 1000 (MAP = $1250) transfers material ABC to Plant 2000 (Standard price = 1200)
Option 1: w/o STPO – 1-Step Process Same financial impact
Transfer Accounting document $
Transfer

Posting
Stock

FI Dr. Inventory (Receiving Plant) 1,200

(301)
Cr. Inventory (Sending Plant) 1,250

Option 2: w/o STPO – 2-Step Process Dr. Price Difference* 50

* Only If receiving plant valuates with Std. Price
Transfer Transfer
Transfer

Posting Posting
Stock

(303) (305)
Factors To Consider:
• Physical proximity of the Plants
Option 3: With STPO w/o Delivery • Legal and taxation requirements
Stock Goods Goods
• Need for control at the point of Issue as well as Receipts
Transfer

Transfer Issue Receipt • Segregation of Duties

Stock

Purchase (351) (101)

Order • Automation
• Volume
Option 4: With STPO with Delivery
Stock Delivery/ Goods
Transfer

Transfer PGI Receipt

Stock

Purchase (641) (101)

Order

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Stock Transfer — Intercompany
Scenario: STPO with Delivery
Before Enhancement Pack 5 Accounting Documents
Accounting Documents FI Dr. GR/IR Clg
FI Dr. Inventory Dr. Input Tax
Cr. GR/IR Clg Cr. AP (I/C Vendor)

Stock Goods
Receiver

Transfer Receipt Invoice

Purchase (101) Receipt
Order

Delivery/P InterCo
Sender

GI (641) Billing
(Type IV)

Accounting Documents Accounting Documents

FI Dr. COGS FI Dr. AR (I/C Customer)
Cr. Inventory Cr. I/C Sales
Cr. Output Tax

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 Stock Transfer — Intercompany (cont.)
Scenario: STPO with Delivery
Enhancement Pack 5 – New options with preconfigured Delivery Types for SIT
Sender Receiver

Sender’s Sender’s Receiver’s

1. STPO with Delivery Stock In-Transit Stock Stock
Type NCC2

Sender’s Sender’s Receiver’s Receiver’s

2. STPO with Delivery
Stock In-Transit Stock In-Transit Stock Stock
Type NCC3

3. STPO with Delivery Sender’s Receiver’s Receiver’s

Type NCCR Stock In-Transit Stock Stock

Outbound Transfer of Ownership Proof of Delivery OR

Delivery On Arrival at a Port Goods Receipt

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 Manufacturing Order
Example with Product Cost By Order Accounting Documents $
FI Dr. Ext. Labor (From PO) 200
Debits: RM Cost $800, Internal Activity $1000, External Activity $200, Overhead $400 Cr. GR/IR (WRX) 200
Credit: FG standard price $2500 CO Dr. Ext. Labor (Prod.Order) 200
Procure

Purchase Purchase Goods

To Pay

Requisition Order Receipt

Operation Confirmations
Planned
Production

Production/ Issue Finished Production

Planning

Order Internal External Variance

Process Raw Goods Overhead Order
(Finished Activity Activity Calculation
Order Material Produced Settlement
Goods)

Accounting Documents $ Accounting Documents $ Accounting Documents $

FI Dr. Consumption-RM (GBB-VBR) 800 FI Dr. Inventory-FG (BSX) 2,500 FI Cr. Price Diff. (PRD) 100
Cr. Inventory-RM (BSX) 800 Cr. COGM-FG (GBB-AUF) 2,500 Dr. COGM-FG 100
CO Dr. Consumption-RM (Prod.Order) 800 CO Cr. COGM-FG (Prod.Order) 2,500 CO Cr. Price Diff. (Prof.Seg) 100
Dr. COGM-FG (Prod.Order) 100

Accounting Documents $ Accounting Documents $

FI FI
CO Dr. Labor (Prod.Order) 1,000 CO Dr Overhead (Prod.Order) 400
Cr. Labor (Home Cost Ctr.) 1,000 Cr Overhead (Cost Center) 400 Period-End Processes
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 Order to Cash - Simple Sales Order
Scenarios
• Sale of Make To Stock Items

Example: Sale Price = $200, Tax = $20, Cost of Goods Sold = $150, Early Payment Discount = $5
Order To Cash

Delivery/PG Incoming
Sales Order I Billing Payment
(Customer)

Accounting Documents $ Accounting Documents $ Accounting Documents $

FI Dr. COGS-FG (GBB-VAX) 150 FI Dr. AR (Customer) 220 FI Dr. Bank Clearing 215
Cr. Inventory-FG (BSX) 150 Cr. Sales 200 Dr. Discount 5
Cr. Output Tax 20 Cr. AR (Customer) 220
AB-COPA Dr. COGS-FG 150
CB-COPA AB-COPA Cr. Sales 200
CB-COPA Sales 200
COGS 150

• Item Category in SO determines Requirement Type/Requirement Class which in turn determines whether SO is Cost Object
• Costing-based COPA: COGS and Revenue both flow at the time of Billing
• Account-based COPA: COGS flow with PGI and Revenue flows with Billing
• COGS – Not created as Cost Element. Differentiation based on Account Modifier VAX.
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 Order to Cash - Sales Order as Cost Object
Scenarios
• Sale of Make To Order Items
• To be used when business requirement is to track all order fulfillment related expenses and revenue.
Example: Sale Price = $200, Tax = $20, Cost of Goods Sold = $150
Order To Cash

Delivery/PG Incoming Sales Order

Sales Order I Billing Payment
(Customer) Settlement

Accounting Documents $ Accounting Documents $ Accounting Documents $

FI Dr. COGS-FG (GBB-VAY) 150 FI Dr. AR (Customer) 220 FI
Cr. Inventory-FG (BSX) 150 Cr. Sales 200 AB-COPA
AB-COPA COGS 150 Cr. Output Tax 20
CB-COPA Sales 200
CB-COPA AB-COPA Sales 200 COGS 150
CB-COPA

• Item Category in SO determines Requirement Type/Requirement Class which in turn determines whether SO is Cost Object
• Costing-based COPA: COGS and Revenue both flow at the time of Sales Order Settlement
• Account-based COPA: COGS flow with PGI and Revenue flows with Billing (Same as SO as not Cost Object)
• COGS – Created as Cost Element so that COGS flows to Sales Order. Differentiation based on Account Modifier VAY.
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 Order to Cash - Cross-Company Sales
Scenarios
• Drop-Ship: Order booked by one Company but Delivery Plant belongs to another Company
Accounting Documents
FI Dr. AR (I/C Customer)
Cr. I/C Sales
Accounting Documents Accounting Documents
Cr. Output Tax
FI Dr. COGS (GBB-VAX) Dr. I/C COGS (optional) FI Cr. AR (I/C Customer)
Cr. Inventory-FG (BSX) Cr. COGS (optional) Dr. Bank Clearing
Delivering
Company

Delivery/ InterCo. Incoming

PGI Billing (IV) Payment (I/C
Customer)

* iDoc/ RD04
Company

Customer InterCo. AP Outgoing

Sales Order Payment
Selling

Billing (F2) Invoice (I/C Vendor)

Accounting Documents Accounting Documents Accounting Documents

FI Dr. AR (Customer) FI Dr. COGS FI Dr. AP (I/C Vendor)
Cr. Sales Dr. Input Tax Cr. Bank Clearing
Cr. Output Tax Cr. AP (I/C Vendor)
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 Order to Cash - Third-Party Sales
Scenarios
Direct delivery from vendor Plant Accounting Documents
FI Dr. AR (Customer) Accounting Documents
Cr. Sales FI Dr. Bank Clearing
Cr. Output Tax Cr. AR (Customer

Incoming
To Cash
Order

Sales Order Billing Payment

(Customer)

Purchase Purchase Outgoing

Procure
To Pay

Requisition Order (Acct Goods Invoice Payment

(Acct Assigned) Receipt (101) Receipt (Vendor)
Assigned)

Accounting Documents Accounting Documents Accounting Documents

FI Dr. COGS FI Dr. GR/IR Clg. FI Dr. AP (Vendor)
Cr. GR/IR Clg. Dr. Input Tax Cr. Bank Clearing
Cr. AP (Vendor) Cr. Discount Received

• Sales Order: Standard Item Category = TAS

• Purchase Requisition/Order: Account Assignment Category = 1 – Third Party, Item Category = S – Third Party
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 Order to Cash - Free of Charge/Samples
Scenario-1: No Customer Billing (Separate Order Type/Item Category)
Order To Cash

Sales Delivery/
Order PGI

Accounting Documents $
FI Dr. COGS 150
Cr. Inventory-FG 150

Scenario-2: Customer Billing with 100% Discount (Separate Item Category/Pricing Procedure)
Order To Cash

Sales Delivery/ Billing

Order PGI

Accounting Documents $ Accounting Documents $

FI Dr. COGS 150 FI Dr. Sales Deduction 170
Cr. Inventory-FG 150 Cr. Sales 150
Cr. Output Tax 20

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 Consignment Sales (Books of Consignor)
Scenario: Consignor selling goods through Consignment Agent (Consignee customer)
Process Flow/Sales Order Types:
• Consignment Fill-Up: For moving unrestricted-use stock to Consignee’s stock (special stock “W”). Ownership remains with Consignor.
• Consignment Issue: When Consignee sells the consignment stock (special stock) to a third party. Relevant for Billing.
• Consignment Return: When Consignee receives return of goods from third party. Relevant for Credit Memo.
• Consignment Pick-Up: For returning goods from consignment Consignee’s stock (special stock “W”) to unrestricted-use stock

1a. 2a. 3a. 4a.

Consignment Consignment Consignment Consignment
Fill-Up Issue Returns Pick-Up
Order To Cash

1b. 2b. 3b. 4b.

Delivery/ PGI Delivery/PGI Delivery/PGI Delivery/PGI
(631W) (633W) (634W) (632W)

2c. 3c.
Billing Billing
(Invoice) (Credit Memo)

Accounting Documents Accounting Documents Accounting Documents Accounting Documents

FI Dr. COGS FI Dr. Customer FI Cr. COGS FI Cr. Customer
Cr. Inventory Cr. Sales Dr. Inventory Dr. Sales
Cr. Output Tax Dr. Output Tax

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Consignment Purchase (Books of Consignee)
Scenarios: Consignee selling goods for Consignor
Procure To Pay

Scheduling Transfer to Invoice Receipt

Goods Receipts Outgoing Payment
Agreement (Item Unrestricted Stock MRKO (Consignment
MIGO (101K) (Vendor)
Category “K”) MIGO_TR (411K) Settlement)

Accounting Documents Accounting Documents Accounting Documents

FI Dr. Inventory (BSX) FI Dr. Payable-Consignment FI Dr. AP (Vendor)
Cr. Payable-Consignment (KON) Cr. AP (Vendor) Cr. Bank Clearing
Dr./Cr. Gain/Loss*
* (Std. Price ~ Consignment Price)

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What We’ll Cover

• End-to-End Scenario Overview

• Key Process Flows with Accounting
• Preliminary and Periodic Valuation
• Wrap-Up

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Preliminary (Real-Time) Valuation
• Price Control
 Price Control indicator in material master determines the valuation – MAP (V) or Standard Price (S)

• Moving Average Price (V)

 Represents weighted average price (= Total Value/Quantity)

 Price gets updated with each Goods Receipts

 Recommended for externally procured materials

• Standard Price (S)

 Price is determined and updated periodically, either manually or using Material Cost Estimate (Cost Roll-Up)

 Recommended for in-house-produced products

 Variant Configured materials should be valuated using Sales Order Cost Estimate, as there is no Material Cost
Estimate
 Must for Material Ledger/Actual Costing

• Split Valuation
 Can be used to valuate sub-stocks of same material in different ways

 Example – Externally procured vs. in-house-produced, duty-paid vs. duty-free, by quality, by batch

 Parent material is always maintained in MAP

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Periodic Revaluation
• Material Cost Estimate (Cost Roll-Up)
 In-house-produced materials are valuated using Standard Price Accounting Documents
 Standard Price is calculated based on master data like BOM, Routing, Costing Sheet FI Dr./Cr. Revaluation Diff. (UMB)
 Price gets updated in material master; Revaluation gain/loss posted in accounting Cr./Dr. Inventory-FG (BSX)
• Manual Price Change (MR21)
 For updating Price in material master periodically
 Commonly used for Materials with price control indicator “V” Accounting Documents
 Can be used for “S” Materials if Standard Cost Estimate has not been released yet FI Dr./Cr. Revaluation Diff. (UMB)
 Revaluation difference (gain/loss) is posted in accounting Cr./Dr. Inventory-RM (BSX)
• Actual Costing with Material Ledger
 Preliminary valuation for all goods movements is performed with Standard Price and
Price Variances are maintained in Material Ledger
 At period-end, closing inventory is revaluated with determined “Actual Price” or periodic Accounting Documents
unit price FI Dr./Cr. Price Diff. (PRY)
 “Actual Price” can be used for statistical purposes as well without Accounting (optional) Cr./Dr. Inventory (BSX)
• FIFO and LIFO
 Available for month-end inventory valuation adjustment reports
 Material is valuated in moving average price for daily purpose
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 Material Cost Estimate (Cost Roll-Up)
Quantity Structure Value Structure

BOM Routing • Prices for Materials

• Prices for Internal Activities
• Prices for External Activities
• Overhead from Costing Sheets
• Prices from Processes

Costing Data
• Costing Variant
• Costing Version
• Controlling Area
Costing Run

• Company Code 1. Selection 2. Structure 3. Costing 4. Analysis 5. Markin 6. Releas

• Transfer Control Explosion g e
• Costing Date From
• Costing Date To
• Qty Structure Date
• Valuation Date
• Valuation Variant
• Costing Sheet

Example: Current price in Material master gets updated

Material ABC: Material ABC:
Accounting Documents $
Total Stock: 1000 Pcs New Cost Estimate suggests $880/Pc Total Stock: 1000 Pcs FI Cr. Revaluation Diff. (UMB) 80,000
Total Value: $800,000 Total Value: $880,000
Dr. Inventory 80,000
Price: $800/Pc Price: $880/Pc
CO Cr. Revaluation Diff. 80,000
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 Work in Progress (WIP)
Scenario: WIP represents goods in production that have not yet been completed at the end of an accounting period

Manufacturing Order
RM Consumption $800 Material: XYZ COGM – FG $1,000

Material Cost 800

Activity Allocation $1,200 Activity Cost 1,200 Month-end
Overhead 400
--------------------------------------------------- WIP $1400
Total 2,400
Overhead $400 Production Confirmed (1,000) Accounting Documents $
---------------------------------------------------
WIP 1,400 FI Dr. WIP (B/S) 1,400
Cr. WIP Offset (P&L) 1,400
CO NA

• Status of the manufacturing orders controls postings. PREL/ REL  Calculate, DLV/CNF/ TECO  Cancel
• Valuation is carried out based on net “Actual Cost” using the formula:
= ∑ (Debits on account of Material, Activity, Overhead, etc) – ∑ (Credits on account of settled cost, i.e., COGM)
 If the result is positive, it represents “Stock in Process” (FI entry is Dr. WIP Stock, Cr. WIP Offset)
 If the result is negative, it implies ‘”Reserve for Unrealized Cost” (FI entry is Dr. WIP Offset, Cr. WIP Stock)
• WIP Offset account should not be created as Cost Element
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 Physical Inventory Count and Adjustment
Scenario: Physical inventory count is carried out at periodic intervals to ensure accuracy in financial books. This may also be
mandated by accounting or taxation rules to place an accurate value on the inventory.
Physical Count

Create PI Print PI List Count Post

Execute Count Enter Count Recount
Documents Documents Differences Difference
(Manual) (MI04, MI34) (MI11)
(MI01, MI31) (MI21) (MI20) (MI07, MI37)

Example:

Material ABC: Material ABC: Accounting Documents $

Total Stock: 1,000 Pcs Sock count suggests 1,100 units Total Stock: 1,100 Pcs FI Cr. Physical Inv. Diff. (GBB-INV) 80,000
Dr. Inventory (BSX) 80,000
Total Value: $800,000 Total Value: $880,000
CO Cr. Physical Inv. Diff. (Cost Ctr.) 80,000
Price: $800/Pc Price: $800/Pc

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What We’ll Cover

• End-to-End Scenario Overview

• Key Process Flows with Accounting
• Preliminary and Periodic Valuation
• Wrap-Up

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Where to Find More Information

• For further information on logistics scenarios and design integrations, please refer to:
 SAP Best Practices Baseline Package – Building Blocks

 https://help.sap.com/bp_bl604/BL_DE/html/Content_Library_BL_EN_DE.htm

• For learning SAP’s new HANA-enabled logistics and finance solutions, please refer to:
 http://discover.sap.com/S4HANA

 www.s4hana.com/

 S/4HANA 1511 Update: https://vimeo.com/146090331

 SAP Business Suite 4 SAP HANA in a Nutshell: https://open.sap.com/courses/s4h1

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7 Key Points to Take Home

• Various logistics scenarios relevant for accounting.

• Step-by-step process flows for Procure to Pay (P2P), Manufacturing and Order to Cash (OTC)
• Enhanced understanding around FICO accounting integrations.
• Account determination setups are critical for correct Accounting.
• Preliminary and Periodic valuation methods for accurate Amounts.
• Learn about design and configuration options.

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Your Turn!

How to contact me:

Saugata Ghosh, Director, PwC
Saugata.Ghosh@pwc.com

Please remember to complete your session evaluation

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Disclaimer
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company) in Germany and other
countries. All other product and service names mentioned are the trademarks of their respective companies. Wellesley Information Services is neither owned nor controlled by SAP SE.

This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
© 2016 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to
the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

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