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Project Sunrise: Molson Coors International, India SAP Implementation - Project Sunrise Module: Controlling
Project Sunrise: Molson Coors International, India SAP Implementation - Project Sunrise Module: Controlling
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Module: Controlling
Contents
Document History............................................................................................................................5
Introduction......................................................................................................................................6
Implementation Team......................................................................................................................7
Sign-off (Approval) for this document:...........................................................................................8
Glossary...........................................................................................................................................9
Flow Chart Legend......................................................................................................................9
Color Legend...........................................................................................................................9
Shape legend............................................................................................................................9
Text Legend.................................................................................................................................9
Controlling– Organization Structure.............................................................................................10
AS IS Process............................................................................................................................10
Core To-Be Process...................................................................................................................10
Organization elements involved............................................................................................10
Operating Concern.....................................................................................................................10
Controlling Area........................................................................................................................11
Open points............................................................................................................................11
System Controls.....................................................................................................................11
RICEF........................................................................................................................................11
Gaps...........................................................................................................................................11
System Configuration Considerations...................................................................................11
File Conversion Considerations.............................................................................................11
Any Reports required related to current business process.....................................................11
Any Document / Output would be printed for this business process....................................11
Integration aspects.................................................................................................................11
Authorization Considerations................................................................................................12
Controlling– Master Data..............................................................................................................12
AS IS Process............................................................................................................................12
Core To-Be Process...................................................................................................................12
Secondary Cost element............................................................................................................14
Cost element groups..................................................................................................................14
Cost center.................................................................................................................................15
Vital Wires Confidential Page 2
Project Sunrise
AS IS Process............................................................................................................................40
TO BE Process...........................................................................................................................40
Costing based analysis...............................................................................................................40
Actual Posting............................................................................................................................41
PA structure...............................................................................................................................42
Interface/Development Requirements...................................................................................42
Document History
Version Release Date Author Reviewed By Change Description /
Comment
Introduction
This document contains the proposed blueprint for the SAP Implementation at Molson Coors
International, India; it outlines all the major processes associated within the scope of the
implementation project. The intent of the document is to define the to-be model for some of the
process that have been covered as part of the as-is study conducted during the knowledge
gathering phase.
If there are any functional elements or sub components which are incidental and critical to the
business scenarios of Molson Coors International, India and which is not reflected in this blue
print document, it shall later be added as version changes to this document provided these
changes/functional elements are within the processes mentioned in the original blueprint
document. Those changes will be incorporated if identified by the end of completion of unit
testing phase.
If the changes are identified after the unit testing phase, these would be taken up with the
Steering Committee and evaluated there and will not get included automatically. Please also
note that if there are any additional efforts required to incorporate any such changes that affects
the project timelines or which is outside the scope of the project, the same needs to be mutually
discussed and agreed upon as per the Change Order Terms and Conditions.
This document also highlights the Organization structure that would be mapped to the SAP
system.
The entire document establishes the format for the final blueprint, which would be subjected to
audit by the business representatives for their assessment and approval.
The document is a collaborative effort between the implementation team, business team and
the core team. The document also represents the agreement of the core team to the proposed
processes in individual modules of the project and also of the deviations, where an agreement
needs to reach on the process change.
Propose “TO-BE” process, these would either be the Core Business Model (CBM) itself or
would be a deviation from CBM.
Implementation Team
Name Role Module Organization
Sachin Selot Chief Financial Officer SAP Business Lead MCI India
Trent Krause Head of IT - MCI SAP Project Head MCBC IT
Ramendra Choudhary IT Business Partner SAP Project Lead MCBC IT
Deepak Jammula Tech Lead SAP Tech Lead MCBC IT
Serge Nimmegeers Solution Architect Solution Architect MCBC IT
Nathalie Gendron SAP FICO Lead SAP FICO MCBC IT
George Puscu SAP MM/PP Lead SAP MM/PP MCBC IT
Mihail Dinu Project Manager Project Manager MCBC IT
Dragos Zvincu BI Reporting Lead Reporting Lead MCBC IT
Amit Saini (CC) Core Team Member Finance (FI) MCI India
Manoj Jha Core Team Member Controlling (CO) MCI India
Gordon D’Souza Key User Finance (FI) MCI India
Vivek Sinha Core Team Member Controlling (CO) MCI India
Digvijay Yadav Core Team Member MM & PP MCI India
Manish Saxena Core Team Member Sales & Distribution MCI India
Yogesh Sahni Key User Finance (Brewery) MCI India
Chandershekhar Sawant Key User SAP MM MCI India
Barinder Singh Rana Key User SAP MM (Brewery) MCI India
Shakti Yadav Key User SAP MM (Brewery) MCI India
PK Rajiv Key User SAP FI SD MCI India
Balwinder Sidhu Key User SAP MM (Stores) MCI India
Glossary
Color Legend
Shape legend
Start/End
Decision Document Process
event
Sub -Process
Text Legend
Short Form Full Form
FI Finance
CO Controlling
PO Purchase order
GL General ledger
GR Goods receipt
GI Goods issue
IR Invoice receipt
IV Invoice verification
AS IS Process
Molson Coors India head office is located in New Delhi (HO).Presently cost accounting is done at
corporate level in HO.
There are two legal entities two in MCI India. Molson Coors India Pvt. Ltd and Molson Coors Cobra India
Pvt. Ltd.
Operating Concern
Controlling Area
Company
Company Code
Company Description
1000 Molson Coors Brewing Co.
Controlling Area
The Controlling Area is the business unit where Cost Accounting is carried out. The Company
Code allocated to the Controlling area must use the same operating chart of accounts and the
same fiscal year variant. Each controlling area has a unique standard hierarchy; the highest node is
created when maintaining the Structure. The standard hierarchy of cost centers are attached with
all the cost centers created for a Company code.
Company Description
1000 Molson Coors Brewing Co.
Open points
None
System Controls
Controlling and Finance activities are get integrated
RICEF
None
Gaps
None
Integration aspects
Finance and controlling will be integrated.
Authorization Considerations
Will be finalized and handled during realization phase
Version Management: This Document is subject to change control. Every change of the document has
to Undergo change control procedure and has to be registered in the following table
AS IS Process
Presently department wise cost center master in maintained in legacy system.
A primary cost or revenue elements are those which are created from FI General Ledger Accounts
and impact the financial accounts for example travelling expenses, consumption account, there is no
'Primary Cost Elements' represent the consumption of production factors such as raw materials,
human resources, utilities, etc. and also sales. Primary cost elements have their corresponding GL
accounts in Financial Accounting (FI). All the expense/revenue accounts in SAP FI Module
correspond to the primary cost elements in Controlling (CO).
A primary cost or revenue element is a cost or revenue-relevant item in the chart of accounts, for
which a corresponding General Ledger (G/L) account exists in Financial Accounting (FI). You can
only create the primary cost or revenue element if you have first defined it as a G/L account in the
chart of accounts in Financial Accounting (FI). At the time of creation of Primary Cost and
Revenue Elements, the system checks whether a corresponding G/L account exists in Financial
Accounting.
In an integrated accounting system such as the SAP, costing relevant data is not required to be
entered separately. This is because each business transaction having financial implication and
relevant to cost accounting, updates real-time the controlling component (such as cost center,
internal order, etc.) with detailed information for the relevant primary cost element via an integrated
cost flow.
For each controlling relevant business transaction two separate documents are simultaneously
generated by the system in SAP for Finance and Controlling modules.
By using Primary Cost Elements it would be possible to transfer Primary costs automatically, on-
line real-time basis to the Controlling module as and when a business transaction having financial
implication and relevant for costing, is booked in Financial Accounting.
The automatic updating of costing records will avoid duplication of effort in compilation and
booking of costs, and would enable a more accurate and reliable analysis of costs. It would also
facilitate reconciliation of cost accounting and financial accounting data with ease.
Since the same naming used for Primary cost elements as for General Ledger Accounts, it results in
increased clarity and visibility of cost heads, and clear establishment of their relationship with
Financial Accounting
Primary Cost Element Cost element
category
Cost from FI,MM,PP 1
Revenue from SD Module 11
1. Internal Settlement: Cost elements of this category is used to settle order costs to
objects in controlling such as cost centers, Internal orders etc.
2. Order/Results Analysis: Used to calculate WIP on the order/project
3. Overhead: Used to calculate indirect costs from cost centers to orders
4. Assessment: Used to allocate costs during assessment
5. Internal Activity Allocation: Used to allocate costs during internal activity allocation
such as Machine Labor etc.
When a secondary Cost Element is created, the system checks whether a corresponding General
Ledger Account already exists in Financial Accounting. If the General Ledger Account exists, the
secondary Cost Element cannot be created in Cost Accounting (CO).
Secondary Cost Element has great importance for CO module. The Secondary Cost Elements
should be of such nature that it can properly allocate or apportion various costs to different cost
objects (Cost Center, Internal order) properly.
Secondary Cost Element Cost element
category
WIP Settlement 31
Internal Settlement 21
Assessment 42
Internal Activity 43
Based on the cost allocation cycle Secondary Cost Elements will be finalized during the realization
phase.
such as in Cost Center Planning, Distribution and Assessment. These groups are also used for report
viewing purposes.
Cost center
Cost Center, the smallest area of responsibility within a company’s overall in organizational structure.
Cost Centers collect direct and indirect charges from financial postings or internal allocations. Only costs
are collected in Cost Centers, revenues are not collected. Cost Center must be assigned to a Standard
Hierarchy structure. Alternative hierarchy structures can be defined to support various reporting
requirements and each Cost Center is assigned to a Company Code and Profit Center.
Internal Order
Internal Order is one of the cost objects available in Controlling (CO) module. An Internal Order is a
flexible CO tool that can be used for a wide variety of purposes to track costs within a controlling
area. Internal order provides capabilities for planning, monitoring, and allocation of costs. Internal
order once created can be referred in raising a Purchase order in the account assignment category.
This is mandatory to capture the costs / expenses on the internal order.
Cost will be booked against only one real cost object in Controlling Module (CO). When Cost
Centers are real cost objects, the Internal Order serve as a statistical record. That means no further
settlement from the statistical order. It is achieved by assigning the actual costs to a Cost Center
and statistically to an Internal Order. The costs will then appear under the original Cost Element
both on the Cost center (real costs) and on the Order (statistical, for information purposes only).
Real Internal Order can be settled to other cost object such as cost center, Internal Order, etc.
Activity
The Activity Type classifies the specific activities provided by a Cost Center along cost allocation lines.
In an internal activity allocation, the quantity of the activity, such as a number of consulting hours, is
entered into the SAP system (manually or automatically). The system calculates the associated cost
based on the activity price and generates a debit to the receiver and a credit to the sender for both the
quantity and costs. The internal activity allocation is carried out using secondary cost elements, which are
Activity Description
Electricity GriD
Electricity DG
raw Water
Steam
Refrigeration
DM Water
Profit Center
A profit center is a management oriented organizational unit used for internal controlling purposes.
Dividing company up into profit centers allows to analyze areas of responsibility and to delegate
responsibility to decentralized units, thus treating them as “companies within the company”.
The essential difference between a profit center and a business area is that profit centers are used for
internal control, while business areas are more geared toward an external viewpoint.
The master data of a profit center includes the name of the profit center, the controlling area it is assigned
to, and the profit center’s period of validity, as well as information about the person responsible for the
profit center, the profit center’s assignment to a node of the standard hierarchy, and data required for
communication (address, telephone number and so on).
Number ranges
To be finalized at realization phase.
Open points
Business team to share finalized list of Cost elements
Business team to share finalized list of Cost center master.
Business team to share finalized list of Internal Order master.
Profit center hierarchy to be finalized.
System Controls
Controlling and Finance activities are get integrated.
WRICEF/GAPS
Internal order LSMW
Cost center LSMW
Profit center LSMW
Authorization Considerations
Will be handled during realization phase.
Version Management: This Document is subject to change control. Every change of the document has
to Undergo change control procedure and has to be registered in the following table
AS IS Process
Department wise cost center are maintained in legacy system.
TO BE Process
Cost Centers in a Controlling Area represent a clearly delimited location where costs occur. The
organizational division into Cost Centers can be made on the basis of functional, settlement-related,
activity-related, and/or responsibility-related standpoints.
The Cost Centers are used for differentiated assignment of overhead costs to organizational
activities based on utilization of the relevant areas (cost determination function) and for
differentiated controlling of costs arising in an organization (Cost Controlling Function).
Posting
Direct Posting through FI
While booking the expenses in Financial Accounting (FI), user has to select the respective
cost center. Ex: Annual maintenance fees related to Head office cost center.
Posting through MM
When the account assignment in purchase order is cost center (K), upon goods receipt or
service acceptance, cost will be updated to the respective Cost Center.
Ex: Printing and stationery expenses routed through purchase order with an account
assignment category as a Cost Center.
Posting on Depreciation
Depreciation will be posted periodically from Asset Management Module. While creating an Asset
master, Cost Center will be assigned to the same, when depreciation program is executed periodically,
the Cost Center will be picked from the Asset master data. If the Asset is transferred from one
location to another, the Cost Center should be changed before executing the depreciation program, so
that the cost of depreciation will be posted to the Cost Center where the asset is transferred.
The systematic and organized maintenance of Cost Centers will make the cost accounting approach
uniform across the various divisions and branches of the organization. Collection and comparison
of costs will become more structured and therefore reports will contain more useful data.
In MCI at each manufacturing plant Department wise, activity wise and brand wise cost center will be
maintained. For non-manufacturing plants department wise and brand wise cost center will be
maintained. Attached is logic for master data creation.
Cost center code nomenclature will be finalized by global master data team.
This feature shall be used by MCI India to plan Cost center and cost element wise costs for the
cost center of each unit.
At the start of year, as part of corporate plan, all the departments shall give planned cost, cost
element and cost center wise.
These costs are entered in controlling module by the Costing department.
Variance: The actual cost which are booked from Financial accounting, materials management,
plant maintenance, production are available each cost centre and cost element wise.
Also system displays planned values against actual values.
Planner profile
Planner profiles to control the way planning is carried out. In a planner profile, you specify per planning
area which planning layout is to be used with which default values. Per planning area, you can create as
many planning layouts as you require. The profile item determines the order of the planning layouts within
a planning area and can be used to assign the same planning layout to a planner profile in multiple areas,
but with a different default setting each time.
Cost Allocation
Cost allocation in SAP shall be done using the procedure of Assessment method. Under this procedure,
the costs collected on a common cost center during the accounting period are allocated to production
cost center receivers. These are indirect allocation methods for which user-defined keys such as
percentage rates, amounts, statistical key figures, or posted amounts provide the basis. These methods
are easy to use as the keys and the sender/receiver relationships are usually defined only once
Assessment
Assessment is a method of internal cost allocation by which the costs of a sender Cost Center is
allocated (transferred) to receiver CO objects (orders, other cost centers, and so on) under an
Assessment Cost Element category 42. The method works according to the keys defined by the
user.
Assessment cycles can be defined as and when required by MCI India users and it will be finalized during
the realization phase.
Interface/Development Requirements
None
System Configuration Considerations
Assign cost center to existing hierarchy
System Controls
Controlling and Finance activities are get integrated
Open Points
None
WRICEF/Gaps
File Conversion Considerations
None
Document / Output would be printed for this business process
None
Integration aspects
Controlling and Finance will get integrated.
Authorization Considerations
Will be handled during realization phase
Version Management: This Document is subject to change control. Every change of the document has
to Undergo change control procedure and has to be registered in the following table
AS IS Process
Presently no profit center accounting is done in legacy system.
TO BE Process
Profit Center Accounting (EC-PCA) enables determine profits and losses by profit center using either
period accounting or the cost-of-sales approach. It also lets you analyze fixed capital and so-called
“statistical key figures” (number of employees, square meters, and so on) by profit center
Profit Center
A profit center is a management oriented organizational unit used for internal controlling purposes.
Dividing company up into profit centers allows to analyze areas of responsibility and to delegate
responsibility to decentralized units, thus treating them as “companies within the company”.
The essential difference between a profit center and a business area is that profit centers are used for
internal control, while business areas are more geared toward an external viewpoint.
The master data of a profit center includes the name of the profit center, the controlling area it is assigned
to, and the profit center’s period of validity, as well as information about the person responsible for the
profit center, the profit center’s assignment to a node of the standard hierarchy, and data required for
communication (address, telephone number and so on).
The standard hierarchy is a special form of a profit center group. It has to contain all profit centers
belonging to the controlling area and reflect the organizational structure of Profit Center Accounting.
Interface/Development Requirements
None
System Configuration Considerations
Assign profit center to existing standard hierarchy
Assign default profit center
System Controls
Controlling and Finance activities are get integrated
Open Points
None
WRICEF/Gaps
Profit center LSMW
File Conversion Considerations
None
Document / Output would be printed for this business process
None
Integration aspects
Controlling and Finance will get integrated.
Authorization Considerations
Will be handled during realization phase.
In cases, where a default account assignment is to be specified below the company code, then “Account
Assignment Detail” field in OKB9 is used to specify a default CO object per Business area or Profit center
or Valuation area.
Version Management: This Document is subject to change control. Every change of the document has
to Undergo change control procedure and has to be registered in the following table
AS IS Process
Presently no internal order accounting is done in MCI India.
TO BE Process
Internal Order Process
Internal Order will be created for a specific task. It can be decided as real or statistical at the time of
its creation. A Statistical Order will only get the postings as information and the order is not
eligible for settlement process.
All the costs are booked to the respective GL accounts having Internal Order as an
assignment for cost collection purposes.
A settlement rule is defined for settlement of IO to AUC periodically which can be finally settled to
Document Entry
System generates the following documents when any expenditure gets posted.
Actual Postings
Actual postings to an internal order are triggered in real time during transaction entry. In case of
incorrect assignment of a cost to an internal order, reposting can be done to rectify the same.
Accounting Entries
Dr. CWIP Asset Account (Internal Order) 50
Cr. Vendor 50
Interface/Development Requirements
None
System Configuration Considerations
Creation of Order Types
Number Ranges for Order Types. To be finalized at time of realization.
System Controls
Controlling and Finance activities are get integrated
Open Points
None
Gaps
None
File Conversion Considerations
None
Authorization Considerations
Will be handled during realization phase
Version Management: This Document is subject to change control. Every change of the document has to
Undergo change control procedure and has to be registered in the following table
AS IS Process
Standard Costing is done for new material. For finished goods cost sheet is maintained to compare
standard and actual cost of production.
TO BE Process
Product Costing, part of the Controlling module, is used to value the internal cost of materials and
production for profitability and management accounting.
Product Cost Planning accesses master data in other components, such as BOMs, recipes, and resource
in Production Planning, and cost centers, activity types, and business processes in Overhead Cost
Controlling.
Costing data within Product Cost Planning can also be made available to other applications. For example,
the standard price in the material master can be updated with the results of cost estimates, and valuate
materials using this new standard price.
MCI India will use Product Cost Planning to determine cost estimates for Finished and Semi Finished
materials. All materials will be maintained at a Standard Price (Price Control – ‘S’) . Manufactured
material (SFG and FG) will have cost estimates. These cost estimates will be used for standard inventory
valuation and for planning purposes.
MCI India will only use Standard Cost estimate yearly to update prices for Finished and Semi
Finished materials
Standard Price: Constant price without considering usage or invoice. Material stock valuated at the same
price over an extended period. Price variance is posted to price difference account, not effecting standard
price.
1 200.- 3 2
240.- 240.-
2 200.-
2 40.- 20.- 3
220.- 3
Note: The method of valuating the inventory of material is determined at time of creating/extending
material.
Valuation area
Organizational unit dividing up a company for the purpose of valuating stocks in a standardized and
consistent manner
Level at which material value is managed
For MCI India, Plants will be defined as valuation area
Cost estimate
BOM(RM/PM/SFG)
Recipe
Activity
Electricity Grid
Electricity DG
raw Water
Steam
Refrigeration
DM Water
3566 B1 (Existing)
Costing Variant
All Cost estimates are created with reference to a costing variant. A Costing variant contains important
parameters that drive the costing functionality. Costing Variant is a key that determines how a cost
estimate is performed and valuated.
Costing Variant
Quantities Prices
Cost of Goods
Manufactured
In a cost estimate with a quantity structure, the costing variant determines the following:
Which dates are valid for the cost estimate itself and for exploding and valuating the quantity
structure
How the BOMs and recipes are selected to create the quantity structure
Which prices are selected to valuate the quantity structure
How overhead is calculated
Cost Component Structure
Note: MCI India requires to quarterly update forecasted price. To achieve it Variant ZPC6 will have
costing type 12 and update plan price1 in material master.
To which field in the material master (standard price, planned price etc) the cost should be
transferred
On what basis the overhead should be calculated
MCI India will use Standard SAP Costing type – 01 for ZPC5 and costing type 12 for ZPC6.
Valuation Variant – Valuation variant controls how the materials and activities in the cost estimates are
valuated. MCI India will valuate all material at standard price and Activities at the Planned price on Cost
Center through transaction code KP26
Date Control – Key that controls the dates for material cost estimates. The system will default current
date as costing from date, last day of current year as costing to date, current date will default into quantity
structure date and valuation date.
Quantity Structure Control - Automatic process by which the system determines the quantity structure
(such as the BOM and recipe) when materials are costed. Production BOM and recipe will always be
selected for Cost estimate
Transfer Control
In this step we define parameters for partial costing. This uses partial costing to prevent the system from
creating a new cost estimate for a material when costing data already exist. Instead, the existing costing
data is simply transferred into the new cost estimate.
Single-Plant Transfer
If cost estimates for certain materials already exist in the individual levels of the BOM, they are
not recosted. Rather, the existing costing data is transferred into the cost estimate in
accordance with the transfer control.
If you always want to recost, choose the transfer control No transfer.
For MCI if cost estimate for material exist at level of BOM, material will not be re costed
Costing Sheet
The costing sheet combines all parts of the overhead costing, and determines the rules for calculating the
values to be posted.
A costing sheet will be created to capture administrative overheads cost which are not absorbed in the
products as activity cost but are to be considered for inventory valuation.
Costing Run
You can use the costing run to process mass data. It enables you to cost, mark, and release more than
one material at the same time
Every processing step involved in costing with quantity structure is performed by the costing run, from the
same screen
Once the cost estimate is carried out, costing results needs to be transferred to material master
for updating prices
When the cost estimate is ‘marked’, Future Standard price in the material master is updated
After ‘marking’, Cost estimate is ‘released’. The new released standard price becomes the
‘Current Standard price’ and standard price previously updated in the ‘Current standard price’ is
updated as the ‘previous standard price’
The existing inventory gets revalued at the new current standard prices and system passes
following accounting entry for revaluation:
Caution
Before releasing a standard cost estimate, make sure that the future standard price is correct, release can
only be done once per period. As soon as the cost estimate has been released for a material in a
company code, you cannot repeat the standard cost estimate, marking or release in this posting period.
Accounting entries
Inventory FG/SFG Dr/Cr
Revaluation Inventory FG/SFG Dr/Cr
Standard price:
Only one validated standard price per product per period
The price represents most desired (or most likely) costs
Costing run at period end will update a new standard price for each FG/SFG
Base for variance calculation; which is then posted to FI and CO-PA
Used for stock valuation of finished goods and semi-finished products
Stored in material master data (accounting and costing view) after releasing the cost estimate
As finished goods are delivered from manufacturing order into inventory, an inventory balance sheet
account is debited, and profit and loss production output account is credited. Because there is a primary
cost element corresponding to the production output account, a CO object is also credited. The finished
goods are delivered from a production order, so the system automatically chooses the production order or
product cost collector to receive the primary credit.
Debit Credit
Stock of SFG/ FG-(Standard Price) XXX
COGM of Finished Good XXX
Raw Material Consumption (Standard Price) XXX
Stock of Raw Material XXX
Overhead Calculation
Overhead calculation is done on the basis of costing sheet maintained in costing variant.
This allocate costs that cannot be traced directly to the cost object. The overhead is allocated to the
process order as a percentage of the direct costs.
Calculation Base
Overhead Rate
Overhead rate is a percentage factor applied to the value of the calculation base (group of cost
elements).
Credit Key
During Overhead calculation, a manufacturing order in product cost collector is debited, and a cost center
is credited. The credit key defines which cost center receives the credit.
The system makes the following postings based on the overhead calculation:
Overhead is applied to the cost object
The cost center (or order) is credited.
The costs are updated under the secondary cost element specified in the costing sheet in the credit.
Work in Process
Result Analysis Key
The RA key is the default value for each order type and plant. It is then added to the order master record
when an order of a particular order type is created. Each order for which work in process (WIP) has to be
created must have a RA key.
The presence of a RA key in the order ensures that the order is included in WIP calculation during period-
end closing. This Result analysis key will be used in Work in Process.
RA Key Text
000002 WIP Calculation at Actual Costs
The WIP is the unfinished products whose costs are calculated by the difference between the actual costs
charged to an order and the actual costs credited to the order.
In short work in process is the difference between the debit and credit of an order that has not been fully
delivered. WIP evaluates the unfinished product
At month end, Balance sheet needs to report real position of the company’s assets and liabilities as on
date. we handle those production order which are still under process and not yet completed.
Inventory which is produced is reported under balance sheet as inventory under current asset. In-process
production order is reported under balance sheet as work in progress (WIP)
System calculates WIP for all process orders which do not have status of DLV/TECO. In the subsequent
month once order status changes to DLV/TECO system reverses the WIP calculated in previous month at
time of settlement.
Variance Calculation
Variance key
Variances are calculated on the basis of the variance key shown in the order master record. This entry is
defaulted as follows:
When you create a material master record, the system proposes a default variance key for that
material master through the plant.
When you create a production order , process order, or product cost collector for this material, the
system proposes a default variance key through the entry in the material master record.
Total Variance is the difference between total production order debits and credits.
Variance calculation at period end divides the variance into categories, based on the source of the
variance.
Production Variance settled to CO-PA are included at the gross profit margin level.
Variances in the Controlling component (CO) at period-end closing can be due to several causes:
As a result of settlement
Earlier calculated WIP is reversed.
Production variance is settled to material.
Accounting Entry
At WIP calculation
Work in progress B/S DR
Change in WIP P&L CR
At settlement
Work in progress B/S CR
Change in WIP P&L DR
Interface/Development Requirements
None
System Configuration Considerations
Costing variant will be maintained for MCI India
Cost component split will be assigned to company Code.
Costing sheet will be created.
Number Range
None
Open Points
Business to share complete list of overhead to finalise overhead costing sheet
WRICEF
Gaps
Authorization Considerations
Will be handled during realization phase
Version Management: This Document is subject to change control. Every change of the document has
to Undergo change control procedure and has to be registered in the following table
AS IS Process
In Molson Coors India state wise brand wise and SKU wise profitability is reported.
TO BE Process
Profitability Analysis (CO-PA) enables to evaluate market segments, which can be classified according to
products, customers, orders or any combination of these, or strategic business units, such as sales
organizations or business areas, with respect to your company's profit or contribution margin.
The aim of the system is to provide your sales, marketing, product management and corporate planning
departments with information to support internal accounting and decision-making.
Costing based
Account-based.
This type of Profitability Analysis is primarily designed to let analyse profit quickly for the purpose of sales
management.
Its main features are use of value fields to group cost and revenue elements.
The advantage of this method is that data is always up-to-date and therefore provides an effective
instrument for controlling sales.
However, since Value fields in Profitability Analysis is not directly linked to GL Accounts in FI it is not
feasible to reconcile FI with Profitability Analysis Reports.
Characteristics
It identifies the level at which analyses should be performed, such as the sales organization, region,
product, or customer level.
The characteristics in Profitability Analysis represent those criteria according to which we analyse
operating results and sales and profit plan.
The combination of the values for the characteristics in an operating concern is called a Profitability
Segment.
Value fields
Values and key figures should be analyzed, such as revenues, sales deductions, costs, or quantities. It
can only be used in costing-based Profitability Analysis.
These are the fields that contain the currency amounts and quantities to analyse in CO-PA.
They represent the structure of costs and revenues.
New SD condition types will be configured which should be assigned to CO-PA value fields.
Actual Posting
Transfer of Billing document
When billing document data is posted, the online transfer function transfers the values directly into
Profitability Analysis.
In the process, it uses the record type F to generate a line item automatically in Profitability Analysis for
In addition, the stock value of the product (cost of goods manufactured for in-house products) can also be
determined
Actual Posting
• Settling Orders
We can settle internal orders ,
These objects are used for various purposes relevant to Profitability Analysis.
We create a settlement rule for the settlement object with a profitability segment as a receiver.
We can enter an assignment to a profitability segment when you create the settlement rule.
PA structure
• Direct Fi Posting
• We use this function to directly post primary postings to profitability segments.
• We can post the actual costs to the original profitability segment.
Existing PA structure assigned to 1000 operating concern will be used for MCI India .
Interface/Development Requirements
None
System Configuration Considerations
New value fields to be maintained
Assign SD condition type to Value field
Assign cost element to PA structure.
Number Range
None
Open Points
WRICEF
Gaps
None
Integration aspects
Authorization Considerations
Will be handled during realization phase