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Caution: This blog entry only handles the very special case that you want to retroactively activate actual costing and the actual cost component split while at the same time changing the cost component structure that has hitherto been used in product cost planning in your system. I.e., you have been using product cost planning without actual costing for some time with cost component structure Z1, and now you want to activate actual costing and the actual cost component split and at the same time change the cost component structure from Z1 to Z2. For customers who wish to activate actual costing and the actual cost component split without changing their cost component structure, the following blog entry is not relevant. These customers are referred to consulting note 3147202, which explains which startup programs exist in the area of the Material Ledger/Actual Costing and when to use them.
In the dynamic landscape of SAP S/4HANA on-premise solutions, decisions made during implementation are critical. One common scenario involves organizations opting to activate only the Material Ledger functionality for material valuation, deferring the activation of SAP Actual Costing. In this blog post, we explore the feasibility and practical steps for subsequently activating actual costing post-implementation.
Problem statement that is intended to address through this blog is the complicated scenario of activating actual costing once Material Ledger is live with an existing cost component structure and you are intended not only activating the actual costing, actual cost component structure but also intended to change the cost component structure that has been in use to a new cost component structure effective from the new period.
Understanding the Landscape:
During the initial implementation, organizations may face apprehensions about fully embracing SAP Actual Costing. In response, they might choose to activate Material Ledger, a valuable component for material valuation, while keeping actual costing on standby. However, as business needs evolve, the question arises: Can actual costing be seamlessly activated after the system has gone live?
Clarifying the Path:
A crucial distinction needs to be made between subsequent activation of actual costing and the implementation of "Parallel Valuations," such as group costing and profit center valuations. Notably, activating parallel valuations post-go-live with Material Ledger is currently not supported, as clarified in SAP Note 2882025.
The Good News: Flexibility in Activation:
The silver lining lies in the fact that organizations have the flexibility to activate SAP Actual Costing even after the initial implementation of Material Ledger in SAP S/4HANA. This opens up possibilities for refining costing strategies, aligning them more closely with evolving business requirements.
Practical Steps for Success:
For those considering or in the process of activating actual costing post-implementation, the following practical steps can guide you through the process:
Assessment and Planning:
- Conduct a thorough assessment of your current material valuation processes.
- Identify the specific areas where SAP Actual Costing will add value.
- Plan the activation timeline based on business priorities and operational considerations.
Configuration Adjustments:
- Review and adjust the system configuration to accommodate actual costing requirements.
- Ensure that the necessary settings align with your updated valuation strategy.
Data Conversion Considerations:
- Evaluate the impact on existing data and plan for any necessary data conversions.
- Communicate clearly with stakeholders about potential changes in reporting and analytics due to the activation of actual costing.
Testing and Validation:
- Conduct comprehensive testing to validate the accuracy and consistency of cost calculations.
- Test scenarios that reflect real-world use cases to uncover any potential issues.
User Training and Communication:
- Provide training sessions for users involved in cost accounting processes.
- Communicate changes effectively to ensure a smooth transition and avoid disruptions.
Here's a comprehensive guide outlining the steps to seamlessly activate actual costing after the implementation of Material Ledger in SAP S/4HANA:
- Preliminary Configurations:
- Navigate to Controlling -> Product Cost Controlling -> Actual Costing/Material Ledger -> Actual Costing -> Activate Actual Costing.
- Simultaneously, activate the Actual Cost Component Structure via Controlling -> Product Cost Controlling -> Actual Costing/Material Ledger -> Actual Costing -> Activate Actual Cost Component Split.
Both configurations are imperative and can be implemented at any time. Ensure that all related actual costing settings, including account determinations, are completed, preferably in the development client before transporting to the production system.
- Transition to New Cost Component Structure:
If you plan to modify the existing cost component structure, ensure careful planning with reference to periods. For instance, if transitioning from Z1 to Z2, have Z2 valid from period 2, ensuring configuration availability before MM period change (through MMPV) to period 2.
Visit Controlling -> Product Cost Controlling -> Product Cost Planning -> Basic Settings for Material Costing -> Define Cost Component Structure (OKTZ).
Reference SAP Notes: 3136485 and 3012656 for guidance on CCS startup and change.
- Execute FCML4H_STARTUP Program:
This program retroactively activates Material Ledger Actual Costing as productive in SAP S/4HANA generating new data structures.
Execute the program for the valuation areas you want to activate the actual costing. The program only takes the valuation areas into consideration in which the actual costing is active, and it checks whether transaction CKMSTART was executed beforehand for the relevant plants.
Execute it in Period 1 if actual costing activation is intended from Period 2 onwards.
FCMLH_STARTUP Program
- Run Period Shift (MMPV):
Execute MMPV to shift from Period 1 to Period 2.
Verify CKMLKEV table entries for the new CCS (Cost Component Structure) and its validity date, ensuring entries for both old and new structures.
CKMLKEV Table Entries
- Run and Release Cost Estimates:
Proceed with new Cost Estimates run and release, updating standard cost estimates with the new cost component structure.
- Close Month-End Activities:
Complete all month-end activities for Period 1. Refrain from executing the next steps until all month end (period 1) activities are concluded.
- Execute CKMM Transaction:
Execute CKMM only after completing all preceding steps and closing Period 1. This updates materials' Price Determination from 2 (Transaction-based) to 3 (Single/multi-level).
CKMM Material Update Program
- 8. Run FCML4H_MLCCS_CHANGE
(Starting with S/4HANA 2021, the report to set the actual cost component split productive is called FCML4H_CCS_CHANGE)
You would be running this program as the cost component structure from period 1 to period 2 is changed.
Execute this transaction in period 2 ONLY when you have completed all the steps and closed previous month (Period 1) completely. This program would lock the materials for any logistics movement postings till the execution is completed.
FCMLH_MLCC_CHANGE Program
9.Execute Actual Costing Cockpit (CKMLCP):
As you have now actual costing is active for the plants/materials selected in the period 2, you execute actual costing cockpit (CKMLCP) to complete the month end activities and determine the periodic unit price for period 2. You can run this till the “Settlement” step and validate the transactions for variances’ distribution (Single/Multi level) across the logistic flow at different intervals to ensure the actual costing is generating all relevant data for month end accurately.
Actual Costing Closing Cockpit
10. Rigorous Testing and SAP Notes Implementation:
Conduct thorough testing in the development environment with at least 2 cycles before going live.
Ensure all relevant SAP Notes, especially those requiring manual corrections, are implemented based on your SAP S/4HANA version.
Confidently Embrace Flexibility:
The subsequent activation process isn't just about adapting to change; it's about embracing the flexibility that S/4 HANA offers. Your organization can now adjust its cost accounting strategies in response to evolving business dynamics, confident in the adaptability of the system.
With flexibility, meticulous planning, and a wealth of knowledge at your disposal, you're not just activating SAP Actual Costing – you're unlocking the full potential of your SAP S/4HANA investment.
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