SAP S/4HANA Finance, FIN (Finance)

Splitting Price Difference with SAP S/4 HANA Finance

In this blog, I will explain about the SAP S/4 Finance functionality for “Split of Price Difference “. Normally Semi Finish and Finish Products are managed with price Indicator ‘S’ Standard Price.

Normally Semi Finish and Finish Material Valuated with standard price method value gets calculated from Standard Product Cost Estimation. Standard Product cost estimation is done using production planning master data and Controlling master data like BOM, Routing, Activity Price, Raw Material Price.

In actual scenario, once the production order gets processed and completed we found there is the difference between planned (Standard Cost Estimation) and in actual cost. In SAP this difference gets calculated at the month end using settlement process. Once the settlement completed system pass the accounting entries for the difference value.

Earlier in ECC is get recorded only on one account of “ Price Difference Account” and Costing base COPA is get distributed as per variance categories but not within Finance to GL’s. To get recorded this difference in Finance and get real-time reconciled with SAP COPA, SAP come with functionality Price Difference Split in S/4 HANA.

Configuration Steps required for “Price Difference Split“

  1. GL master data need to be created as per different type of variance category.
  2. Assign PRD account in OBYC.
  3. Define Price Difference Split Profile
  4. Assign GL Master to different Variance categories
  5. Assign Company Code to Price Difference Split Profile

To get in details how it works we need follow Process steps as enlisted below.

  1. COPC (Product costing of Finish Product) to get Standard Price of the Material.
  2. Create Master data for BOM and routing in PP.
  3. Create Production Order to GRN from production order process (TECO Status of the order).
  4. Variance Calculation
  5. Order Settlement.

System Configuration with screen shot,

  1. GL master data: As per requirement created GL Master Data for a different type of variance category.GL master Screenshot

SAP S/4HANA Finance, FIN (Finance)

As shown above, GL masters created all 9 different types of the variances.

GL master List Screenshot

SAP S/4HANA Finance, FIN (Finance)

2. Price difference account assignment as MM FICO IntegrationScreen Shot for OBYC

SAP S/4HANA Finance, FIN (Finance)

3. Price Difference Split Profile: Here we have to define profile for price difference with combination of Chart of Accounts and Controlling Area.

SPRO:

Financial Accounting (New) > General Ledger Accounting (New) > Periodic Processing > Integration > Materials Management > Define Accounts for Splitting Price Differences

Screenshot for Price Difference Split Profile,

SAP S/4HANA Finance, FIN (Finance)

4. Assign GL with Price Variance Categories: We have created Different GLS Master for each of the price variance will assign that GLS over here to get split single price variance account in this different GLS.For example, for Price Variance, we assigned 52071000 GL

Screenshot for GL assignment with Categories,

SAP S/4HANA Finance, FIN (Finance)

List of the GL Assignment,

Screenshot with all categories assignment with GL’s,

SAP S/4HANA Finance, FIN (Finance)

5. Price Diff Split and Company Code Assignment: Once we complete with split profile configuration we have to do an assignment of Company code to split profile. In this, we have to give valid from date. From this dating system will start price variance split for company code.

Screen shot for Company code assignment with Price Difference Profile,

SAP S/4HANA Finance, FIN (Finance)

Now we have done with pre requites system configuration steps, we will processed with process steps to see how its work,

1. Product Costing for Finish Product: I have created Semi Finish product master and completed product costing run for the same using CK40N.

Screen shot for Product Cost for Material,

SAP S/4HANA Finance, FIN (Finance)

2. BOM & Routing Master : Before go for product costing system should have master data for BOM and Routing in Production Planning,

Screen shot for Bill of Material Master and Routing Master,

SAP S/4HANA Finance, FIN (Finance)

Routing,

SAP S/4HANA Finance, FIN (Finance)

3. Production Order Process : Once production order completed and finish product received from order its should be set as TECO Status

Screen shot for Production order Technical Completed ,

SAP S/4HANA Finance, FIN (Finance)

3. Variance Calculation: As the month end activate to calculated variance of the production order and category of the variance we have to run variance calculation for the order.

Tcode: KKS2

Screen shot for Variance Calculation,

SAP S/4HANA Finance, FIN (Finance)

Once the variance is get calculated we have perform next steps of the process it’s the settlement of the order.

5. Order Settlement: As the month end activity , Production orders need to be settled to record actual cost and variance of the production order. This activity is completed using Tcode KO88

Screen Shot for Order Settlement,

SAP S/4HANA Finance, FIN (Finance)

Order settlement result shows details for the settlement with sender and receiver details and accounting document details,

Screen Shot for Settlement Receiver and Senders,

SAP S/4HANA Finance, FIN (Finance)

Accounting Document for Price Difference with settlement generated by system, Document posted with line item for each variance category.

Screenshot for Settlement Generated Accounting for Price Difference with Split,

SAP S/4HANA Finance, FIN (Finance)

Document,

SAP S/4HANA Finance, FIN (Finance)

In the above example, System has distributed total price variance in two categories as calculated in variance calculation to Resource-Usage Variance and Output Price Variance.

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