Fixed Asset procurement in Ariba Guided Buying & S/4HANA Public Cloud integrated environment

[Manoj_Kapoor1]

The blog shares tips and tricks and configuration settings in S/4HANA Cloud Public Edition for Fixed Asset procurement, where the Purchase Requisition originates in Ariba Guided Buying and subsequent processes are executed in S/4HANA Cloud Public edition.

Background

A typical scenario for Fixed Asset (e.g. Laptops, Printers etc.) procurement begins with Purchase Requisition creation and approval in SAP Ariba Guided Buying. This purchase requisition is replicated in S/4HANA Cloud Public Edition and converted into Purchase Order with Account Assignment Category (AAC) = A-Asset and sent to the supplier.  At the time of physical goods delivery, Goods Receipt confirmation is performed against the Purchase Order. During Goods receipt serial numbers are noted and asset tags created. Further Asset Master is created in the system for initiating the capitalization process. Upon receipt of invoice from the supplier, Supplier Invoice is created and posted in the system by the Accounts Payable team and released for payment.

Potential Roadblocks

This section discusses challenges which can be encountered in execution of the above process.

• Asset creation timing:

SAP Ariba Guided Buying doesn’t require asset master to be created at the time of Purchase Requisition creation for fixed asset. But SAP S/4HANA Cloud Public Edition requires Asset ID to be entered in the Purchase Requisition and Purchase Order for the Account Assignment Category (AAC) A- Asset. This results in failure when Purchase Requisition is replicated from SAP Ariba Guided Buying to S/4HANA Cloud Public Edition. 

From process perspective it might not be desirable to create Fixed Assets so early in the process as the delivered quantity can vary from the Purchase Requisition/ Purchase Order quantity, thus ending up with orphan Fixed Asset master data.

• Limit of number of account assignments:

There is a limit of 99 account assignments (in this case asset ids) which can be assigned to a Purchase Order line item.

• Partial receipt and value distribution:

In case of partial receipt or multiple receipts against the purchase order, value should be distributed corresponding to actual receipt quantity (i.e. ((PO Item Net Value/ PO Item Quantity) x Quantity Received). But by default, total PO Item Net Value is distributed among receipt quantity, which leads to incorrect valuation in case of partial receipt quantity.

• Asset assignment at Goods Receipt:

Asset assignment can only be done in Purchase Order or Supplier Invoice. Asset Assignment fields are display only in Post Goods Receipt. Also available Goods Receipt APIs and BADIs do not provide capability to update the Asset Information

• Asset capitalization timing control:

By default Asset Valuation happens at the time of Supplier Invoice creation. But there could be a business need for asset valuation to be done at the time of Goods Receipt.

Potential Solutions 

• Asset creation timing:

Account Assignment Category: A-Asset, which is delivered as part of standard configuration in Configuration Activity „Maintain Account Assignment Categories“ has „Asset“ field marked as Mandatory Entry (Figure1 Pt1), thus requiring asset assignment at the time of Purchase Requisition/ Purchase Order creation.  As standard delivered configuration cannot be changed, a custom Account Assignment Category: Z-Asset Mod (Figure2 Pt1) needs to be created with this field being Optional Entry. This will allow the Fixed Asset Purchase Requisition/ Purchase Order to be created without the Asset assignment and can be added later in the process. 

• Limit of number of account assignments:

The number of account assignments per Purchase Requisition/ Purchase Order item is limited to 99. This is documented as part of KB Note: 2681590 - Multiple account assignment has limit of 99 lines - SAP for Me. 

Generally, the procured asset quantity will not be more than 99 units per line item, but in rare case where it is, then multiple line items need to be created with each line maximum quantity of 99 units

• Partial receipt and value distribution:

By default, Account Assignment Category: A-Asset, Distribution is set to „1- Distribution on Quantity Basis“ and Partial Invoice is set to „2- Apportion IR quantities to GR quantities proportionately“ (See Figure 1 Pt2). This causes the total Purchase Order Item net value distributed among receipt quantity, which leads to incorrect valuation in case of partial quantity receipt.

To solve this issue, in Maintain Account Assignment Categories configuration activity, Distribution should be set to „1-Distribution on Quantity Basis“ and Partial Invoice to „1-Apportion IR quantities to GR quantities one after another“ (see Figure 2 Pt2). This will distribute partial Purchase Order Item net value corresponding to the quantities received. Figure 3 shows based on the Account Assignment Category configuration how Distribution and Partial Invoice fields are defaulted in Purchase Order Line Item – Account Assignment

• Asset assignment at Goods Receipt:

Account Assignment fields are visible but not editable in the Post Goods Receipt app. Also, these fields cannot be updated via the Goods Receipt API or Goods Receipt BADI.

Custom App using Embedded ABAP needs to be built for capturing the receipt quantity along with asset information with reference to Purchase Order. This app will capture Asset Class, Asset Description, Cost Center and Asset Serial Numbers corresponding to the Goods Receipt quantity. Upon saving this will trigger the following APIs to accomplish the following tasks:

1. Create Assets in the system with Serial Number (API: Fixed Asset - Master Data)

Asset Master is created with serial number capture based on the receipt quantity

2. Update Purchase Order with Asset Information (API: Purchase Order - Account Assignment)

As Asset Account assignment cannot be directly updated in Post Goods Receipt, the Purchase Order is updated with the asset account assignment. This will then flow to Supplier Invoice, when it is created with reference to the Purchase Order

3. Goods Receipt Confirmation (API: Material Document - Read, Create))

Goods Receipt confirmation and posting is done

This allows the goods receipt entry to be done once via the custom application, which in turn creates the asset master, updates the purchase order with asset information and post goods receipt.

• Asset capitalization timing control:

Whether Valuation happens at the time of Goods Receipt or at the time of Supplier Invoice, posting is controlled via the „GR Non-Valuated“ flag in the Account Assignment Category.

By default in Account Assignment Category = A-Asset, the valuation in marked to happen at the time of Supplier Invoice posting as „GR Non-Valuated“ flag is checked (Figure 1 Pt3).

If valuation needs to happen at the time of Goods Receipt, then „Gr Non-Valuated“ flag needs to be changed to unchecked (Figure 2 Pt3).

Conclusion:

Business needs flexibility on when the asset needs to be created in the Procure To Pay process for Fixed Assets. This blog provided some tips and tricks on controlling the timing of fixed asset creation, timing of asset valuation and deriving the correct asset valuation in case of partial receipt.