Free of Charge Material from Customer with Freight and Import Duty cost to be captured in COGM

[rai_ac11]

Dear All,

Currently I'm facing with a requirement from our client as per below,

When produce a specific product, sometimes they will received a Raw Material as FOC to produce the SFG and FG then sell to the Customer.
When receive those FOC RM, they will bear the cost such as Freight and Import duty.

Question from my end, how we are able to capture such cost since the material is FOC which is a non valuated material and only track for the qty in the system.

But during run the standard cost estimate by our costing team, they should be able to read the information related to Freight and Import duty as a cost structure.
The goals is to track the cost that was coming from Freight and Import duty for those FOC material during run standard cost estimate from Controlling team.

Anyone have such experience ?

Kindly please advise or any suggestion will be appreciated.

[rai_ac11]

-

[Lakshmipathi]

I could see the below challenges in your process

• FOC Raw Materials: Received without invoice value, tracked only by quantity.
• Associated Costs: Freight and Import Duty are incurred and need to be reflected in product costing.
• Standard Cost Estimate: Should include these costs in the cost structure of Semi-Finished Goods (SFG) and Finished Goods (FG).

Below are the approaches which you can explore

Even if the material is FOC, you can still create a Purchase Order (PO) with zero material value. Add Freight and Import Duty as condition types in the PO (e.g., FRB1 for freight, ZIMP for import duty). These condition types can be configured to post to specific cost elements.

Use Planned Delivery Costs in the PO to record freight/import duty. These costs can be posted to a cost center or internal order using account assignment. Ensure these costs are not capitalized to inventory but are available for cost analysis.

In SAP CO-PC, define a costing sheet that includes surcharges for freight and import duty. Link these surcharges to cost elements that capture the actuals from the PO or customs. This allows the standard cost estimate to include these costs even if the RM is non-valuated.

Create a phantom material or auxiliary material to represent the FOC RM. Assign freight/import duty costs to this material manually or via costing sheet. Include this in the BOM of the SFG/FG so the cost flows into the final product.

Your configuration approach should be

• Ensure cost elements for freight and import duty are created and assigned to appropriate cost component structure.
• Use valuation class and account determination to route costs correctly.
• Consider using Activity Types if freight is internal (e.g., company trucks).

So with the above, the outcome is by using planned delivery costs, costing sheets, and manual cost component planning, your costing team can ensure that Freight and Import Duty for FOC raw materials are included in the standard cost estimate—even though the material itself is non-valuated.

[rai_ac11]

Hi Lakshmipathi,

I really appreciate your insight regarding the end to end process that catered also the requirement from Costing side.
Let me try digest and test it out first in our Customizing System and let you know the further information.

[rai_ac11]

Hi Lakshmipathi,
Unfortunately when do the testing with details below,

RM Non Valuated, Price Control S or V, Price Determination - 3.

Whenever create the PO, system will always ask a purchase price. I couldn't maintained with 0 value for the purchase price in the PO.

I'm trying to explore the others way how to handle this FOC RM without using PO since it's not possible to have purchase price 0.

Best Regards,

[rai_ac11]

-

[kunal_ingale]

Hello , Check below link for a similar solution   https://community.sap.com/t5/enterprise-resource-planning-blog-posts-by-sap/import-process-for-free-...