Activity type confirmation in SAP S/4HANA Public Cloud Professional Services

[Francesco_Spaggiari1]

Hi gurus, 

I'm facing an issue during actual confirmation of activity types in the Customer Project about Professional Services business.

With the fixed price contract, if I plan certain activity types on the work packages and then finalize them with different activity types , the system increases the value of planned costs by the amount I calculated with the activity type different from the planned one. Could anyone kindly explain to me why it behaves like this and if there is a way to ensure that the amount I calculate (with an activity type different from the planned one)  contributes to the progress of the project without being added to the planned cost (and so without influencing the calculation of POC) ?

Thanks in advance

[Chris1973]

Hello @Francesco_Spaggiari1 

Thank you for your question.

Please review these references for more details:

Fulfillment by Percentage of Completion, Review Percentage of Completion, Activity Types: Plan Quantities,

Revenue Recognition Methods for Customer Projects

Blog: How integrated Project Cost and Revenue Planning helps to keep your promises to clients

To summarise, the clean-core approach in public cloud, ensures that Customer Projects automatically update planned costs whenever you create actual postings with an activity type that is not in the work package plan. You cannot disable this in public cloud due to its clean-core principle.

Because of this, any actual time posting that introduces a new activity type will cause the system to increase planned cost, even in a fixed price contract. The idea behind it is to maintain plan vs actual consistency for revenue recognition.

The provided recommendation to prevent this from happening is to ensure that all activity types that may be posted are included in the work package plan even if it has 0 quantity. You may consider as an alternative, to post time with the planned activity type and use internal costing adjustments if need be.

Let me know if you have further questions.

Best regards

Chris

[Francesco_Spaggiari1]

Hi Chris,

Thanks for the answer. I tried to plan activity type with 0 qty but the system failed. Is there any configuration in CBC to allow this feature? 

Thank you 

[Chris1973]

Hello @Francesco_Spaggiari1

Apologies for the late response. To ensure your follow-up questions are directed to me, kindly use the @ to tag me. Below is my response to your follow-up.

The public cloud does not support 0-quantity activity type planning, that explains also why it failed.

I am not aware of any CBC configuration or SSCUI to enable you plan with 0 quantity for activity types in public cloud.

To prevent your actuals from modifying planned cost and thus avoid skewed POC, I recommend you

• Use only planned activity types when you post time.
• If you must use a different activity type, then create a parallel internal cost project to post internal corrections or reassign the correct activity type before you post actuals.

That represents the best practice in your case.

Best regards

Chris