Period-End Closing “General” Plant

1. Period-End Closing “General” Plant SAP Best Practices

2. Purpose, Benefits, and Key Process Steps • Purpose • Period-end closing in a plant insures that all costs incurred in production of company activities (such as materials manufactured in-house) are assigned to those activities / products. The costs are then allocated to the respective products in profitability analysis. • Benefits • Transparent view of production costs for materials manufactured in-house. • Automated efficient processing. • Key Process Steps • Run assessment cycle for quality costs • Ensure goods movements and production transactions are complete • Open new MM period • Period-end closing for production orders (overheads, WIP calculation, variances calculation, settlement of production orders) • Close completed production orders • Data collection for summarization hierarchy (reporting) • Run actual assessment of all cost center costs to profitability analysis (COPA) • Run profitability report

3. Required SAP Applications and Company Roles • Required SAP Applications • Enhancement package 6 for SAP ERP 6.0 • Company Roles • Enterprise Controller • Product Cost Controller • Accounts Payable Accountant • Shop Floor Specialist • General Ledger Accountant • Production Planner

4. Detailed Process Description • Period-End Closing “General” Plant • First, you allocate quality costs to production cost centers. • Then you have to ensure that all incoming invoices are registered for the period (release blocked invoices). • The goods movements and production transactions have to be complete for the period. • Open new MM period. • Then you start period-end closing activities for production orders: posting of actual overheads, calculation of WIP (work in progress), variances calculation, settlement of production orders. Completed production orders are closed. • To facilitate reporting, you run a data collection for summarization hierarchies. The data is registered at the different levels of the hierarchy, e.g. company, plant, order type, product hierarchy. The data extracts are used for reporting on production costs. • To complete the allocation of production costs to products in COPA, you run the actual assessment of all cost center costs to profitability analysis (COPA). • In profitability reports, you can analyze costs and revenues for your products.

5. Process Flow Diagram Period-End Closing “General” Plant Event PO Invoices Need to be Posted before Month-End Enterprise Controller Run Assessment Cycle for Quality Costs Run Assessment Cycle for Quality Costs Run Profitability Report Perform Actual Assessment to CO-PA Accounts Payable Accountant Record Purchase-Order-Related AP Transactions Release Blocked Invoices Shop Floor Specialist Ensure Inventory Movements are Complete Ensure Production Transactions are Complete General Ledger Accountant Open New MM Period Product Cost Controller Post Actual Overheads Calculation Prod. Order Preliminary Settlement for Co-Products Review WIP Calculation Settle Variances Analyze Variances Period-End Closing with Partially Delivered Production Orders WIP Calculation Production and Process Order Variance Calculation Data Collection for Summarization Hierarchy Production Planner Close Completed Production Orders Product Order Information System PO = Purchase Order; AP = Accounts Payable; MM = Mass Maintenance; WIP = Work in Progress

6. Diagram Connection Legend <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference Process Decision System Pass/Fail Decision