SAP CO: Material Ledger with Inter and Intra company posting
Group Valuation-Additive cost with "Inter company" and Profit center Valuation-"Transfer Pricing" with "Intra company"
Ratings 4.58 / 5.00
What You Will Learn!
- Material Ledger Setup with Legal Valuation, Group Valuation and Profit center Valuation
- Material Ledger Setup-Group Valuation-Inter company transaction with Markup say as Additive Cost
- Material Ledger Setup-Profit center Valuation-Intra company transaction with Markup say as Transfer price
- Group valuation - Mark up: PO & SO transaction for Inter company (Company code to Company code)transaction
- Profit center valuation - Transfer price -STO for Intra Company (Plant to Plant)within the company code
Description
The integration of the "Material Ledger with Inter (Cross) and Intra-company transactions" provides an enhanced insight into the valuation and transfer pricing mechanisms within SAP S/4 HANA. Here's an elaboration on the two scenarios you've pointed out:
1) Inter (Cross) Company Transactions with Markup by Additive Cost
Scenario Overview: This involves transferring materials across two different company codes (intercompany). Typically, such transfers may carry a markup to reflect the profit margin of the selling entity.
Steps and Considerations:
a) Delta Cost Component - Company Code: This is the additional cost or markup that gets added during intercompany sales. This delta captures the difference between the manufacturing cost and the sales price.
b) Costing Type and Costing Variant: You'd need to define a specific costing type for intercompany markups and associate it with a costing variant. This allows for the proper capture of the additive costs during cost estimates.
c) Special Procurement Key: It's crucial to set up a special procurement type for intercompany transfers. This ensures the system knows how to treat these transactions during MRP (Material Requirement Planning) runs.
d) Additive Cost Creation: This is the step where you'd define the markup or additional cost. It's typically a percentage over the cost of production or a fixed amount.
2) Intra (Within) Company Transactions with Markup by Transfer Price
Scenario Overview: This involves transferring materials between plants within the same company code. Transfer pricing comes into play when these plants are treated as profit centers.
Steps and Considerations:
a) Delta Cost Component - Profit Center: Just like in the intercompany scenario, here too, we have a delta, but it's linked to the profit center to capture the transfer price between plants.
b) Costing Type and Costing Variant: You'd need a specific costing type for intracompany transfers. It would be associated with a costing variant to capture the transfer pricing during cost estimates.
c) Special Procurement Key: This would be for intracompany stock transfers, helping in recognizing the transaction type and ensuring proper treatment during MRP runs.
d) Transfer Price: This is the price at which one plant sells the material to another plant within the same company code. It's often used to evaluate the performance of different segments of the business (profit centers).
In Conclusion:
Both intercompany and intracompany transactions play a crucial role in modern organizations that are spread across regions and have multiple manufacturing units. With the Material Ledger, SAP S/4 HANA provides a comprehensive tool to capture these transactions with the necessary valuation layers, thereby offering greater transparency and accuracy in financial reporting
Who Should Attend!
- CPA , CMA , ACCA , CA , MBA , M Com, B Com students and Professionals, SAP FICO Consultants and End Users.
