Material Ledger in SAP S - 4HANA - Intro Presentation
Material Ledger in SAP S - 4HANA - Intro Presentation
Material Ledger in SAP S - 4HANA - Intro Presentation
Raw Material
Without Material Ledger
Standard Cost USD
Balance Sheet
Debit Inventory
Asset Inventory
GR Credit GR/IR offset
Liability – GR/IR
DR/CR PPV / Ex Diff
Raw Material
With Material Ledger
Standard Cost USD
Balance Sheet
Debit Inventory
Asset Inventory
GR Credit GR/IR offset
Liability – GR/IR
DR/CR PPV / Ex Diff
Individual
Method Of Processing Create
Cost Run Perform Selection
Recommended Costing Sequence
Previous Period Allow Price
Determination
Revaluation
Closing Entry
Material Ledger
What is material ledger ?
Material Ledger (ML) is a most useful and important tool with in SAP ERP
Software. SAP making continuous improvement in Material Ledger.
The material ledger takes the price variances that occur from inventory
transactions and posted them back to inventories in order to value them at
actual cost. It does while retaining cost is standard cost of the material as
benchmark. We have option to revaluate the current standard cost with the
periodic unit price. Which is the actual cost of the material cost calculated by
Material Ledger. The price determination with material ledger are of two types.
1. Single level Price determination: This take the price variance which occur for
an individual material and roll them back into its ending inventory.
2. Multi level Price Determination: This takes the variance that occur for a lower
level product for a lower level product example Raw Material. And roll them into
proportion of consume quantity into a higher level product example finished product.
By using Material ledger revaluation of consumption can be complete and we
can achieve actual cost of ending inventory of single or multilevel products and
cost of sales. We can measure easily procurement processes according to
Standard Costs.
Material Ledger SAP S/4 HANA v/s SAP ERP 6.0
The objective of material ledger are
If an organization records inventory on its balance sheet, they need a sub ledger of sub
ledger of inventory postings which provide more granular detail about
Inventory transactions than General ledger postings As done with AP, AR, and fixed
assets which are also sub ledger of the SAP General Ledger. The sub ledger inventory
is existed in SAP ERP system in the form of inventory valuation tables XBEW(H). Such
as EBEW, EBEWH, MBEW, MBEWH, OBEW, OBEWH, QBEW and QBEWH. SAP
enhanced these tables in SAP S/4 HANA by introducing the Universal Journal.
SAP leveraged the existing functionality of Material Ledger to create a cohesive sub
ledger for inventory valuation in SAP S/4 HANA.
Material Ledger SAP S/4 HANA v/s SAP ERP 6.0
The actual functionality of costing is still optional its depends upon the requirement of
the companies. If any company not need to report their inventory and cost of sake at
actual sales at actual cost don’t need to activate this functionality.
SAP S/4 HANA offer a few new currencies options, but more important is SAP S/4
HANA offers new ways of evaluation Material Ledger data. Currency settings available
in Universal Journal is integrated with Material Ledger.
In SAP ERP System, you can have one company code currency (local Currency one
and up to two parallel currencies local currency 2 and local currency 3 in the FI module,
We have the option of adopting the currencies in FI module, the CO module, or both or
assigning currency types individually. The currencies are translated are based on the
historical rates in the Material Master.
In SAP S/4 HANA, a key improvement that SAP has made with parallel currencies is to
allow up to eight free definable currencies in the Universal Journal Table in addition to
fixed )local and global currencies as follows:
Material Ledger SAP S/4 HANA v/s SAP ERP 6.0
Local : The company code currency
“Freely defined” means that you can name the currencies any way that makes sense
for your business and not rely on SAP’s predefined currency type names.
Also, if creating these currencies for parallel ledger, you don’t need to base these
currencies on the currency of the leading ledger( as is the case with an SAP ERP
system)
Exchange rates should be maintained for these extra currencies and system will
perform the real time currency translations of the postings in FI module (and related
sub-modules) into these additional currencies.
Alternatively, we could specify that the translation is performed at the end of the period
with the foreign currency valuation program. As a result, a company can present it’s
financial and management reports to different stakeholders in different currencies, as
needed.
In the ledger settings for a company code, you can configure additional currencies
along with the local and global currency types by using transaction FINSC_LEDGER.
Material Ledger SAP S/4 HANA v/s SAP ERP 6.0
Even though eight additional currencies are allowed in the Universal Journal, only three
currencies are allowed in the ML. Therefore, when defining the currencies in ML(which
is based on the currencies of the leading ledger), you’ll need to specify which additional
currencies in the Universal Journal should be mapped to the ML. Also, all the valuation
areas(plants) that belong to a company code should have the same currency type
settings in the ML.
.
Activate Material Ledger
Configuration
These configuration settings are sub divided in to three groups
.
1. Enterprise Structure Define Valuation Class
T-Code: SPRO
IMG Screen Enterprise Structure Definition Define Valuation Area
2 Option 1. Valuation area Plant Level 2. Valuation Area Company Code Level
Select Radio button of Valuation Area Plant Level it is mandatory
T-Code: SPRO
IMG Screen Controlling Product Cost Controlling – Actual Costing/
Material Ledger Material Update Define Material Update Structure
On change view “Define Material update structure” overview screen,
choose New Entries
MUS Name
0001 Standard
Click on Save
Select the new entry and in left pane, double click Material Update
Structure.
On the change view “Maintain material update structure” overview screen,
choose New Entries make following settings
PC At MTG Cat
B+ Blank ZU
V+ Blank VN
Click on save
6. Assign Material Update Structure 0001 to a
Valuation Area
T-Code: SPRO
IMG Screen Controlling Product Cost Controlling – Actual Costing/ Material Ledger
Assign Material Update Structure to a valuation area
On change view “Assign Material update structure” overview screen, choose New Entries
Valuation Area Material Update Structure
Company code 0001
Click on Save
Click on save
8. Run Reports
SAPRCKM_OBLIGATORY_SETTINGS
T-Code: SE38
On ABAP Editor screen, in the program field, enter SAPRCKA_OBLIGATORY_SETTINGS
and choose execute
8. Production Startup Material Ledger
In this activity execute the production startup for the Material Ledger
T-Code: CKMSTART
SAP Menu Screen
8. Production Startup Material Ledger
In this activity execute the production startup for the Material Ledger
T-Code: CKMSTART
SAP Menu Screen
Thank You…………………..