Creating a Mass report for Actual Costing CKM3n beloved transaction

For those of you that work or have worked with Actual Costing, I am sure that you have used, and continue using every day, Transaction CKM3n - Material Price Analysis. This is the go-to report / transaction to analyze the costs and actual costs of a given material during an accounting period. This is "the bible" for Actual Costing information on Materials.

The transaction is really nice, it gives you a lot of information on Receipts, Production, Consumptions, Deliveries, Revaluations on a Standard basis as well as including Actual Costs. There is "almost" nothing better out there in standard SAP Actual Costing than this transaction. But ... it has a very big limitation, you can only display 1 Material at a time in 1 Plant and for 1 Accounting period at a time. There is no other good transaction for many Materials. If you are dealing with multiple plants and multiple materials, then it is going to be hard to do multiple analysis. (some would mention KKML0 as an alternative, will there shortly ...)

Another good piece of information that this report provides you, is the breakdown of the figures by Cost Component (considering you have activated Actual Cost Component Split in your system).

As you can see above, you get a lot of valuable information like Beginning Inventory, Revaluation, Receipts, Consumption and finally Ending Inventory; which is also something really nice that many Cost Accountants would need (All the In's & Out's during the period).

Note: To be able to obtain all these calculations in CKM3n, you need to be using Actual Costing and running it on a monthly basis. Otherwise, this transaction will show you only "Price History" information which is line by line each transaction, the standard cost, quantity, etc. Only with actual costing you will have calculated beginning and ending inventory and their corresponding "price difference" (Actual costing).

Now if you want to do a Mass report for the information in CKM3n, you will have to build a custom report for it; which I will explain you what will be your source tables for this information.

In the picture below you will have a more detailed and exploded view of the different categories in CKM3n

You can easily reproduce these with the 3 Tables below, which I will explain each of them:

FCML_MAT_V  

FCML_REP_V

FCML_CCS_REP_V

Will start with the 1st Table FCML_MAT_V

This table has the "Master Data" type of information (Ex. Plant, Material #, Description, Valuation Class, Profit Center, Company Code and the most important one "Cost Estimate number", among some.

If you are also dealing with Customer Stock or Project Stock, you also have the Stock Type, Sales Document and line item number as well. Same as you would need to enter in CKM3n.  

Next Table FCML_REP_V

The link between the 2 Tables is the "Cost Estimate Number". Here you also have a way to restrict by Posting Period, Fiscal Year and Currency Type (10 for Company Code, 30 for Group this will depend on your Material Ledger currency setup). If you do not restrict the data, you will get for that same material all accounting periods out there for all your ML currencies.

These should be part of the available selection criteria in your future query.

Once you restrict your data, you will see that this table shows the different Categories that you get in CKM3n (Ex. Category AB will represent your Beginning Inventory, ZU - Receipts, ... and EB - Ending Inventory). 

Note: Unfortunately there is no check table for the Category list of values as this is a Domain with a list of values. These are the different values

Each Material / Plant combination will have many records for a given period because of the multiple categories. (so eventually they need to be aggregated)

In the example below, you will see side-by-side CKM3n and the corresponding FCML_REP_V record.

You could clearly see the "Total Stock BUn" column representing the Quantity for Beginning Inventory (Category = AB), and the "Total Val" representing the $ amount. Then you can continue with the other Categories like VN - Consumption and EB - for Ending Inventory.

For Ending Inventory (EB) you will need to aggregate (sum) multiple EB records to obtain the Total Value, Quantity and in this case the CKM3n Settlement line (Actual Costing) for ending inventory value, is represented by column "1LvLPrDif". Which it will apply for Beginning inventory for next period. (In my records, I did not have a settlement for beginning as it was my 1st data period).

For Consumption (VN), you will also need to aggregate more than 1 VN record. Again, the Price Difference column or in this case what would show in CKM3n as a revaluation line, will be represented in column "1LvLPrDif".

Finally, the 3rd and last Table FCML_CCS_REP_V

This table represents a deeper level in our CKM3n information. This will give you each of the prior  inventory movements categories broken down by Cost Component.

Same as before, the link is Cost Estimate Number. Of course, this table also needs to be filtered by Posting Period, Fiscal Year, Currency type, etc.

You most likely need to aggregate records as you might have several for the same Cost Component and category.

Here you will have in the field "Cost Component" the component code and then you will also have the Cost Component text description already. 

This Component breakdown is what you will normally see in the far right of your screen within CKM3n transaction.

In the image below, you will see how in this example the records in Table FCML_CCS_REP_V match the consumption line of the Cost Component 20 (see Table and CKM3n side by side and highlighted).

The Cost component amount is the sum of either PRCDIF_VAR Crcy field or PRCDIF_VAR_S field.

In the case of another Cost Component like 110, is the sum of 2 fields, so you need to include Fxd Value as well. So, at the end, it is better to aggregate and sum both fields for any of the scenarios. This one has a value for Fxd Value (because this component is about fix costs, and the prior example CC 20 was about variable costs).

Now that you have all the necessary Tables that provide CKM3n equivalent numbers, you are ready to build your query. With the help of a good Abaper, he can easily join these 3 Tables and turn them into a new CDS view that ultimately can be turned into an Analysis for Office (AfO) query or he can even encapsulate this into a Fiori App using SAP Web Dynpro. I personally prefer AfO or the old Design Studio that would be easier to drag & drop on a pivot table like navigation. Web Dynpro has replaced it, but I prefer the old one that uses less square footage in your screen.

Not sure if you realize, but all these 3 FCML* tables are also standard CDS views that SAP has built. I just don't understand why SAP has not turned them into a proper report and/or Fiori App yet for Material Ledger reporting. They should do it already ! 

Note: I said before that one alternative to this could be to use Transaction KKML0. In my personal opinion, should not be something to be used now a days in S/4 HANA (but there is nothing better yet). This uses a really old SAP technology, "Drill-down reporting" which also uses Report Painter behind the scenes (even older ... 😠 ). You could obtain part of the same information, but not with Cost Component. Then when you will try to export it, it results in a tremendous amount of columns because every combination of CKM3n (row & column intersection) will end up as a column. Not really nice at the end. 

What needs to be activated for the FCML* tables to work ?

Oss Note "2441212 - ML Drilldown Reporting - use CDS views FCML_MAT_V, FCML_REP_V" explains it. It also mentions that this is only available on S/4 HANA versions 1610 and higher for Plants with Activated Material Ledger Actual Costing.

What the Note also says, is that once that in place, KKML0 (Material Ledger drill-down reporting) will be using these series of CDS views. So at the end, my solution is tapping into the same set of Tables. But, if we encapsulate or expose these CDS views to be used in AfO or in a Fiori App, you end up having a way better front-end than the classic Drill-down reporting.

There are quite a few Oss Notes talking about these series of ML tables too.

If your Company and/or Project needs to implement this, or any of the functionalities described in my Blog, or need advise about them, do not hesitate to reach out to me and I will be happy to provide you my services.

www.dnabusinessconsulting.com

Using S/4 COGS Split when shipping to customers out of non-Manufacturing Plants

Starting from S/4 HANA version 1709 and upwards, SAP introduced a new functionality for COGS (Cost of Goods Sold) split when posting your a PGI (Post Goods Issue) automatic journal entry.

Up until this version and traditionally in SAP ECC version, we would post a 1 liner COGS entry for the total standard cost of the material (* Qty) of the product being delivered to the customer. This was the standard in SAP and has been like that since SAP existed. Many other ERP systems do the same, posting of the Cost of Good Sold entry is done with just 1 line to represent the COGS. Also, when we were using Costing based COPA, we would create as many Value Fields as Cost Components we had and when performing the Billing the system will post into COPA this sort of COGS Split among the different value fields. But from a pure GL posting perspective, this was not yet possible.

Our Journal Entry used to be like below:

Debit - Cost of Good sold (PL)

Credit - Inventory (BS)

Now a days, the recommended approach with S/4 is to use Account based COPA and not Costing based COPA anymore. Account based is the way to go today.

(Note: you can still use Costing based, but it is not the recommended approach anymore for new S/4 greenfield implementations. For the old SAP guys, like me, we grew some grey hair trying to explain the "unbalanced" situations of FI vs. COPA. So, we don't want go back to those days anymore). 

By using this new functionality, the system would create a 2nd Accounting Document right after your PGI posting that would offset the original COGS account and Debit your different COGS Splitting accounts that you would have configured to show your different Cost Components that you defined in Product Costing configuration (OKTZ).

Example:

Debit - COGS Cost Component 1

Debit - COGS Cost Component 2

Debit - COGS Cost Component 3

Debit - COGS Cost Component NN

Credit - Cost of Good sold (PL)

Now, the purpose of my posting is not to talk about how to configure this specific functionality. For this, you can find other nice posts that have been written on this topic by colleagues of mine.

I can recommend this one from SAP Press

https://blog.sap-press.com/how-to-split-cost-of-goods-sold-cogs-with-sap-s/4hana-finance

The purpose of this post is how to make COGS Split happen when you ship to your customers out of downstream Distribution Centers and/or 3PLs Plants / Warehouses.

When you ship to your customer from your Manufacturing Plant, and you activated COGS Split, it will naturally post your COGS Split.

But, many companies, have a downstream series of Warehouses, Distribution Centers and/or 3PLs that receive their goods from the Manufacturing Plants via Intra Company STO's (Stock Transfer Orders). And, only from there they ship to their customers.

Since these Warehouses were not the ones that manufactured the goods, you would normally don't have Cost Estimates there that would allow you the possibility of having calculated Cost Components to eventually derive that. In that case, you will have to use another Product Costing functionality that will be used when setting up your materials at these Warehouses. This functionality is called "Special Procurement Key for Costing".

With the setup of these key/s, you will specify, from which Manufacturing Plant the Warehouse will pull his costs and with that, it will also inherit the Cost Components Split. So then, when doing the PGI from the Warehouse, the system will have a Cost Component Split in that warehouse and will be able to post accordingly.

This is how you would configure this Special Procurement Key:

IMG > Controlling > Product Cost Controlling > Material Cost Estimate with Quantity Structure > Settings for Quantity Structure Control > Material Data > Check Special Procurement Types (Tcode OMD9)

    

Here you will define a new "Key" where you will specify: 

Procurement Type = "F" for External Procurement (Plant P001 will get its cost externally from another Plant. By externally, it does not meant from an outside Vendor).

Special Procurement = "U" for Stock Transfer (via STO).

Plant = Ex "CD00" the Plant that it will be getting its cost passed from. 

Note: that 1 Special Procurement key will be needed per Plant. So if you have 10/20 Plants retrieving its costs from CD00, you have to configurate this 10x/20x. The good thing is that since it is Plant specific, you can name them all with the same code / key. Ex. each of the 20 Plants will have its own Z1, easier for organization purposes.

One Material, can have its costs derived like this from 1 Plant at a time since this key is assigned in the Material Master at the Plant level. In our case at P001 we will assign ZD.

Once you have this, you will be able to create / assign to your Material Master record this Special Procurement Key in the Costing 1 Tab.

After setting up your Material Master record, the last step you will have to do from now on, is to include in your Costing Run all the downstream Plants for which you configured and assigned Materials to this Special Procurement Costing keys.

When you calculate your Cost Estimate for a Material, you will clearly see (below in yellow) that Plant P001 is deriving its cost from Plant CD00 (same Material number).

Note 1: You do not need to setup BOM and/or Routings in these downstream Plants to achieve this, just the Special Procurement Key for Costing. BOM and Routing remain necessary only for Manufacturing Plants.

Note 2: In this model, we are not considering any value added like Freight and/or Customs to the inventory value when moving from one Plant to the other, we are staying at the same cost. This can be achieved with other functionalities that are not part of this post.

Now when posting a PGI from Plant P00, you will have exactly the same effect and type of postings that you would achieve as if you were PGI'ing from a Manufacturing Plant and will show the Cost Component Split posting

Material Document for Movement Type 601 - Delivery to Customer will create 2 Accounting Documents.

First Document, posts the traditional COGS posting.

Second Document, posts the COGS Split posting as you defined in your COGS Split configuration but in this case from Plant P001 which is Distribution Plant and not a Manufacturing Plant.

Note: the COGS split configuration is done at the Company Code level, no configuration is required on a per Plant basis. Once done, it will apply to all Plants within that Company Code.

If your Company and/or Project needs to implement this, or any of the functionalities described in my Blog, or advise about them, do not hesitate to reach out to me and I will be happy to provide you my services.

www.dnabusinessconsulting.com

SAP Inventory valuation - Working with MTO but valuating as MTS

 Glossary acronyms :
MTO - Make to Order
MTS - Make to Stock
SO - Sales Order
BOM - Bill of Materials

When working with MTO -Sales Order stock, the inventory is held specifically for that Sales Order and valuated as per the original Sales Order costing that happened when you created the Sales Order and Costed it.

Now, if you are working with MTS materials that can become MTO and vice versa all the time indistinctively, this could create a challenge. Why ?

Imagine a Sales Order created 3 months ago in September with certain costing (Ex. $100 /tn) , now you are getting into a new Fiscal Year and preparing your Standard Costing for the next year to come. The result of your new Costing calculation (CK11N/CK40N) gives you $105/tn for the same material.

Once you finish your Mass Costing run and you "release" the new standard, it will revalue your Inventory. But this will only apply to your MTS stock and will not revalue your MTO Inventory "held" inside the Sales Order.

Many of you will tell me that CK55 - Mass Sales Order Cost and CK51N - Sales Order Cost exist, yes indeed they do. But, they will ONLY cost your Sales Order (the document) and you will only see the update after doing the costing in the condition type EK02 of your pricing procedure for that SO line item. But what none of these 2 transactions will do is re-cost the inventory on-hand that you have for that specific Sales Order.

In standard SAP, MTO inventory is supposed to last for a "finite" amount of time and the assumption is that as soon as you produce it you ship it (or shortly after). That way you are not supposed to have on-hand inventory for too long that would require to re-cost this in the event of a Mass recosting exercise (Ex. for a new Fiscal Year to come). So SAP, does not contemplate the possibility of revaluing MTO inventory on hand. 

*** This solution will not be applicable for all types of MTO situations, only to customers that move around their products between MTS to MTO and viceversa constantly, which we know it is not the true spirit of an MTO ***

Standard SAP MTO configuration uses Requirement Calss 046 - MMTO config value.

This Requirement class uses Account assignment category M  and Valuation M - Separate valuation with ref. to sales document/project. This Valuation M is the key one here that indicates that the valuation is in reference to a Sales Document (Sales Order) or a Project. It also uses Costing ID = B - Automatic costing and marking which makes that your Sales order gets costed and marked automatically behind the scenes when you save it. Costing Variant, specify your specific Sales Order costing variant that you use or configured for Sales Order costing (not the object of this post to talk about Costing variants). In case you use Costing Sheet in your design, you will put it here too .

Finally Costing Method = 1 is for Product costing (based on a BOM) in contrast to 2 Unit Costing.

The rest of the fields are not really relevant for my example and scenario.

Now, with a few tweaks and changes, we can create a new Requirement Class that will make the system behave and valuate your MTO inventory as if you were in MTS. (Needless to say that you will not modify the standard delivered 046 Req Class and you will create a Z or Y one. Golden rule in SAP that you should never break).

This will be the new Req Class for MTO as MTS. (see below in next image)

As you can clearly see, it has been decluttered quite a bit and we do not need many of the prior options.

The key field change here is the Valuation that went from M (Separate valuation with ref. to sales document/project) to A (Valuation without reference to sales document).

Without Val. Strategy also needs to be flagged which will also make the valuation work as MTS.

The rest of the fields are not needed Costing ID, will not cost within the Sales Order anymore as you are using MTS Materials. Costing method, not needed too, can be left blank. Costing Sheet and Costing Variant, either 

Now that you have that configured, all your Logistics processes will still behave as if you were in MTO. Your Inventory movements will still need to be done at Material, Sales Order and Sales Order line item as before. But, from a Financial valuation point of view, these will be handled from now on as MTS.

When you will display your Material Price Analysis (CKM3), in case you are using Actual Costing it is more relevant this Tcode, you will not have to enter the Sales Order stock option to display your inventory value, as the inventory is all handled as if it were an MTS from the Accounting point of view. Logistics wise you will still see it as MTO (Ex. in Material Documents and MM related reports).

Material valuated as MTO with Special Sales Order stock (before)

Material valuated as MTS but for MTO Sales Order (after)

Below you will see the line item of the Sales Order displaying my new Requirement Type ZKEM on the line item of the "Procurement" tab.

Remember, your Material Documents and movements will still need to be done and reference a Sales Order Line Item, but Financially it will not and all the inventory is going to be bundled together with your MTS stock from a Finance valuation point of view.

If your Company and/or Project needs to implement this, or any of the functionalities described in my Blog, or advise about them, do not hesitate to reach out to me and I will be happy to provide you my services.

www.dnabusinessconsulting.com