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SAP FICO Sub-Contracting Guide 2024

The document provides a comprehensive guide on SAP FICO, focusing on sub-contracting processes for both full and partial manufacturing. It includes detailed steps for creating general ledgers, cost centers, materials, and various records necessary for managing sub-contracting in SAP. Additionally, it outlines reporting methods and configurations required for effective cost management and accounting entries in the system.

Uploaded by

Ashwini Harwale Sonwane
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Topics covered

  • Material Master,
  • Cost Analysis,
  • SAP FICO,
  • Internal Manufacturing,
  • System Configuration,
  • Cost Component Structure,
  • COGM,
  • External Manufacturing,
  • Best Practices,
  • Goods Receipt
72 views60 pages

SAP FICO Sub-Contracting Guide 2024

The document provides a comprehensive guide on SAP FICO, focusing on sub-contracting processes for both full and partial manufacturing. It includes detailed steps for creating general ledgers, cost centers, materials, and various records necessary for managing sub-contracting in SAP. Additionally, it outlines reporting methods and configurations required for effective cost management and accounting entries in the system.

Uploaded by

Ashwini Harwale Sonwane
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Topics covered

  • Material Master,
  • Cost Analysis,
  • SAP FICO,
  • Internal Manufacturing,
  • System Configuration,
  • Cost Component Structure,
  • COGM,
  • External Manufacturing,
  • Best Practices,
  • Goods Receipt

SAP FICO

Table of Contents
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Table of Contents
Case 01 : Sub-Contracting (Full Manufacturing Process Out Source) ..................................................................................... 4
Creating Separate GL For Sub-Contracting Process ............................................................................................................ 4
Assign GL In OBYC................................................................................................................................................................ 9
Assign GL in Cost Component Structure - OKTZ ................................................................................................................ 10
Cost Center – Sub Contracting – [OKEON] ........................................................................................................................ 11
OKB9.................................................................................................................................................................................. 12
Check Material Configuration - Sub Contracting .............................................................................................................. 12
Costing Variant - OKKN ...................................................................................................................................................... 13
Create Material – RM & FG – [MM01] .............................................................................................................................. 14
Create BOM – [CS01]......................................................................................................................................................... 18
Purchase Info Record - [ME11].......................................................................................................................................... 18
Production Version – [MM02] ........................................................................................................................................... 20
Cost Estimate [CK11N]/[CK24] .......................................................................................................................................... 21
Raw Material – Stock IN – [MIGO] .................................................................................................................................... 23
Create Purchase Order– RM Transfer to Vendor - [ME21N] ............................................................................................. 24
RM Transfer to Vendor – [MIGO] ...................................................................................................................................... 25
Goods Received From Vendor against PO – [MIGO] ......................................................................................................... 28
Reports After Process ........................................................................................................................................................ 29
Accounting Entry ........................................................................................................................................................... 29
MMBE............................................................................................................................................................................ 29
MB5B ............................................................................................................................................................................. 30
CKM3N .......................................................................................................................................................................... 30
Cost Center Report ........................................................................................................................................................ 31
Case 02 : Sub-Contracting (Partial Manufacturing Process Out Source)............................................................................... 32
Create Material - [MM01] ................................................................................................................................................ 32
Create BOM – [CS01]......................................................................................................................................................... 34
Purchase Info Record – For External Manufacturing (Without Material) - [ME11] ......................................................... 35
Create GL – Sub Contracting External Process – [FS00] .................................................................................................... 36
Cost Component Structure - OKTZ ................................................................................................................................... 37
Routing With GL – [CA01] ................................................................................................................................................. 39
Costing Variant - OKKN ..................................................................................................................................................... 41
Production Version - [MM02] ........................................................................................................................................... 42
Cost Estimate – [CK11N] / [CK24] ..................................................................................................................................... 43
Create Production Order – [CO01] .................................................................................................................................... 45
Purchase Request Auto Generate ..................................................................................................................................... 47
Goods Issue & AT Confirmation - [CO11N]........................................................................................................................ 48
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SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Create Purchase Order - [ME21N] .................................................................................................................................... 50
Service Received Against Purchase Order - [MIGO].......................................................................................................... 52
Goods Received from Production Order - [MIGO] ............................................................................................................ 53
Actualization Costing Sheet – [KGI2] ................................................................................................................................. 54
Actualization Template Allocation – [CPTA] ...................................................................................................................... 55
Enter Manual Activity Confirmation – [KB21N] ................................................................................................................ 55
Variance Calculation – [KKS2]............................................................................................................................................ 56
Settlement – [KO88] .......................................................................................................................................................... 58

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Case 01 : Sub-Contracting (Full Manufacturing Process Out Source)


Creating Separate GL For Sub-Contracting Process
Create Consumption RM , Sub Contracting Charges & COGM-Sub Contracting GL

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Assign GL In OBYC
GBB-VBO – RM Consume

FRL – Sub Con Charges

BSV - COGM

PRD with out General modifier means = difference from Purchase order

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Assign GL in Cost Component Structure - OKTZ

Also Assign in Aux Cost Component Structure.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Cost Center – Sub Contracting – [OKEON]

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
OKB9

Check Material Configuration - Sub Contracting

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Costing Variant - OKKN

Net Quataion Price will Pick.

Sub-Contracting Tab Configuration.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Create Material – RM & FG – [MM01]

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

No Need Of Variance & OH Group Becz No In House


Production – No MRP 3 & 4 Required also.
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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Create BOM – [CS01]

Purchase Info Record - [ME11]

Create Purchase Info Record with Material Number reference.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

For 1 PC of FG – 180 SGD will be paid to TJ_VEN02

Delivery time 1 day

Purchase Info Record Save.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Production Version – [MM02]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Cost Estimate [CK11N]/[CK24]
Raw Material Cost Estimate

FG Cost Estimate

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Cost Component Structure View VS Auxiliary Cost Component Structure View.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Raw Material – Stock IN – [MIGO]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Create Purchase Order– RM Transfer to Vendor - [ME21N]

PO Save
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SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
RM Transfer to Vendor – [MIGO]

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SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Report - MB51

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SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Report - MMBE

Report – CKM3N

No Accounting Entry & Impact

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Goods Received From Vendor against PO – [MIGO]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Reports After Process
Accounting Entry

MMBE

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
MB5B

CKM3N

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Cost Center Report

You Can Change Cost Center report currency by [RPC0]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Case 02 : Sub-Contracting (Partial Manufacturing Process Out Source)


Create Material - [MM01]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Create BOM – [CS01]

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Purchase Info Record – For External Manufacturing (Without Material) - [ME11]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Cat 0 = its standard not on sub- contracting. ( 55000000123 )

Create GL – Sub Contracting External Process – [FS00]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Cost Component Structure - OKTZ

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

This GL Not assign in OBYC Becz SAP does not allow this – so we assign this GL in Routing.

Like FRL in 1st scenario we attach GL in OBYC.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Routing With GL – [CA01]

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SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

PP01 = internal Manufacturing

PP02 = External Manufacturing

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SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Attached Routing with Purchase Info Record & Cost Element.

Costing Variant - OKKN

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Production Version - [MM02]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Cost Estimate – [CK11N] / [CK24]

One FG qty –> 1 F item category.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Create Production Order – [CO01]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Backflush Check.

Calculate – Release – Save

As Order Created PR auto generate.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

440 cost line item show.

Purchase Request Auto Generate

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Goods Issue & AT Confirmation - [CO11N]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Create Purchase Order - [ME21N]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

All Data automatically come. Rate comes from PIR – Qty comes from Production Order. 2nd scenario Account category F is
drive – same as in 1st scenario Item category was drive.

Cost of this service will hit 1002287 Production Order.

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Service Received Against Purchase Order - [MIGO]

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SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Due to this post in GRIR.

Goods Received from Production Order - [MIGO]

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SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Actualization Costing Sheet – [KGI2]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Actualization Template Allocation – [CPTA]

Enter Manual Activity Confirmation – [KB21N]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

Variance Calculation – [KKS2]

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil
Settlement – [KO88]

YouTube : [Link] - LinkedIn : [Link]


Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

USD

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Udemy : [Link]
SAP FICO Ver 2024_02_08 Muhammad Tariq Jamil

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Udemy : [Link]

Common questions

Powered by AI

Variance calculation is essential in SAP for highlighting discrepancies between planned and actual costs in sub-contracting processes. In SAP FICO, variance analysis (using KKS2) processes and quantifies differences that occur due to inefficiencies, strategy changes, or external factors affecting sub-contracted operations. In financial reporting, these variances can greatly influence key figures by indicating over or under-performance against budgeted costs, requiring adjustments in financial statements to reflect true financial status. Precise variance calculation aids in updating financial reports with accurate expense records, enhances managerial decision-making, and drives continual improvement in operational efficiency.

Routing integration with Purchase Information Records (PIR) and cost elements profoundly impacts production efficiency in SAP FICO by aligning operational, logistic, and financial data streams. This integration ensures that the appropriate process routes are followed based on established vendor agreements detailed in PIRs and cost element structures, facilitating efficient manufacturing processes. By linking routing with PIRs, SAP ensures synchronization between planned operations and external procurement activities, leading to optimized resource utilization, minimal delays, and consistent production quality. Furthermore, aligning routing with cost elements encourages real-time tracking of production costs, allowing for dynamic adjustments to improve economic performance and operational efficiency.

In the SAP FICO sub-contracting process, the Bill of Materials (BOM) serves as a comprehensive list of raw materials, components, and assemblies required for manufacturing a product. The BOM is crucial for sub-contracting as it provides the blueprint for production, detailing what materials need to be purchased or sub-contracted from vendors. In the context of cost estimation, a well-defined BOM enables accurate calculation of raw material requirements and costs associated with production and helps formulate appropriate purchase orders. It ensures that cost estimates reflect the precise material and resource requirements, thereby supporting effective budget planning and cost management.

The integration of Cost Center and General Ledger (GL) accounts is fundamental for managing sub-contracting expenses in SAP FICO. The Cost Center serves as a node for accumulating costs related to specific activities or departments, such as those related to sub-contracting processes. By linking it with relevant GL accounts, organizations can ensure that all incurred expenses are accurately categorized and monitored. Assigning GL accounts to specific cost centers allows for detailed financial tracking and reporting, enabling precise budgetary control and variance analysis. This integrated setup enhances transparency and accountability, providing critical insights necessary for cost management and strategic alignment.

Using separate cost component structures for different manufacturing processes in SAP FICO has significant implications for financial accuracy and managerial insights. Separate structures allow for tailored cost accumulation and reporting that aligns with specific process requirements, such as internal versus external manufacturing processes. This leads to more precise tracking of direct and indirect costs associated with each process, facilitating detailed variance analysis and cost control capabilities. It also supports strategic decision-making by providing insights into process efficiencies and potential cost savings. However, the complexity of maintaining multiple structures increases administrative efforts and requires rigorous setup to ensure system integrity and data accuracy.

In SAP FICO, the Purchase Information Record (PIR) plays a crucial role in optimizing sub-contracting operations by maintaining the essential data about external vendors, including prices, delivery schedules, and supply information. It directly influences the purchase order process by providing pre-defined conditions for procurement, which are used to automate and streamline vendor negotiations and contract management. For instance, it specifies the agreed price, such as 180 SGD for each finished good supplied by the vendor TJ_VEN02, and delivery lead times, which efficiently aligns production scheduling and reduces risks of stockouts or delays.

The Goods Received (GR) process in SAP is vital in the sub-contracting context as it records the receipt of materials or services from vendors, marking the end of the procurement cycle. This process, executed in MIGO, updates inventory quantities and triggers financial accounting entries by recognizing liabilities for the supplier and updating stock values. Specifically, it ensures that the goods received against the purchase order are logged correctly, affecting accounts such as inventory debit and GR/IR (Goods Received/Invoice Received) clearing accounts, which subsequently influence balance sheet accuracy. By ensuring accurate recording of materials received, the GR process supports reliable financial statements and inventory valuation.

In SAP FICO, configuring the costing variant for sub-contracting involves setting up the parameters that determine how costs are estimated. The costing variant, configured using OKKN, must include sub-contracting tab configuration to reflect net quotation prices. This involves careful definition of the valuation strategy and sequence, cost component structure, and the assignment of cost center and activity types for calculating production costs. This configuration is crucial as it ensures accurate and consistent cost estimates are applied throughout the manufacturing process, which influences pricing, profitability, and financial reporting accuracy.

In SAP, a Production Order is central to coordinating manufacturing activities and ensuring materials are available when needed. In the sub-contracting process, the production order helps trigger the procurement of materials and services from vendors. It consolidates requirements and resources needed for production, and upon release, it leads to the automatic generation of purchase requests for necessary materials transfers to vendors, such as with ME21N and transfer confirmations with MIGO. This also facilitates inventory management by giving visibility into the status of materials in transit or awaiting processing, thereby optimizing stock levels and avoiding excess inventory.

To create a separate General Ledger (GL) for the sub-contracting process, you need to perform several key steps. First, create separate GL accounts for consumption of raw materials, sub-contracting charges, and cost of goods manufactured (COGM) for sub-contracting. Then, these GL accounts should be assigned in OBYC (Automatic Account Determination) where the relevant keys such as GBB-VBO for raw materials consumption, FRL for sub-contracting charges, and BSV for COGM are mapped without a general modifier. These GL accounts are also assigned in the Cost Component Structure using OKTZ and auxiliary cost component structures if necessary.

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