Infocost solutions pvt ltd -Costing in SAP

www.infocost.net
Simplify
costing
in SAP

Infocost Runs on
SAP HANA
1. Infocost runs on SAP S/4 HANA
2. At Infocost we have done the implementation of SAP HANA Simple
Finance, Costing, Material Management, Sales and Distributions and
Projects System,
3. We have the opportunity to carry out our own projects in live SAP HANA
Server, this give us an edge as we have our own live environment,
4. Being a customer and licensed user of SAP we get all the latest updates
& information which helps us to update our valued clients from time to
time,
5. We have our own data center for SAP HANA Platform.
Infocost Solution Pvt.Ltd, Mumbai

Overview of Infocost
 Infocost is formed by senior & experienced SAP Costing professionals to
serve industries,
 Our founder member is Mr. Sarat Agrawal, He is a Chartered Accountant
with Professional certification in SAP Controlling, He has worked with SAP
India, Siemens SAP Practice (SISL), and Aditya Birla Group Centre of
Excellence, before the venture of Infocost,
 Infocost Incorporated in Sep’12
 We have a team of 30+ in a span of 6 years.

Few of Our Esteemed Clients

Range of our services
1. Simplify / Automate SAP Costing
2. Cost Audit Report (Designed in SAP)
3. Reco. of FI & CO Profit (COPA)
4. Auto Inventory Valuation for SFG and FG
5. Budgetary Control System (FM)
6. Parallel Currency Inventory valuation (Only for MNC)
7. Corporate Training for FI , CO and FM module
8. Automation in MIS reports
9. SAP HANA Implementation & Migration
10.SAP Data Archiving

Simplify / Automation of SAP Costing
As a result of survey and vast experience of our seniors in this Industry we have observed following
key results and experiences of Customers running on SAP:
Let’s say
100%
SAP
Customers
95 %
SAP
Customers
Implemented SAP
with all the
Modules including
SAP CO
Still Continue following in
Excel ( Manual Working)
1. Cost Audit Report
2. Inventory Valuation
3. MIS Reports
4. Cont. Margin report
INFOCOST
Infocost
SAP
Customers
Simplify / Automate the
Following in SAP
1. Cost Audit Report
2. Inventory Valuation
3. MIS Reports
4. Cont. Margin report

Simplify / Automation of SAP Costing
This process we start and complete in the following way with key area of working.
System Study
&
Report
Proposal
SoW &
Commercial
Agreement
Business
Blueprint with
solutions to all
Expectations
Testing with
100 %
satisfaction of
Business Users
Training to
Business Users
in all the new
areas
Preparation for
Moving to
Production
System and
Moved to PRD
Support the
business users
in production
system
Business
Benefits
Analysis by
measuring the
results.
Sign off

Cost Audit Report (CAR)
1. Cost audit report is a statutory requirements and it is mandatory for all the
manufacturing company to prepare on annual basis.
2. In SAP there is no standard solution available for this Cost Audit Report, however we
have designed a solution in SAP by using the standard SAP Costing module features this
solution is designed with 70 % standard and 30 % customizations.
3. Why we should go for SAP Cost audit report ? The reason for this are as under;
Points Manual SAP Auto CAR
Preparation of CAR In complex Excel File In SAP system Auto
Audit Trail up to Voucher Not available Available
Person Dependent Yes, High Risk No, Low Risk
Scope of correction in data if
any error
No. as it is being prepared on
annual basis
Yes, as it is being prepared on
monthly basis.

Cost Audit Report (CAR)

Reco. Of FI & CO Profit (COPA)
1. The Reconciliation of FI profit and Costing profit (in COPA) considered to be the
most important achievement in SAP S/4 HANA Simple Finance, However we
have achieved the same in ECC system as well without HANA system.
2. Once the FI and COPA are reconciled then only the COPA profitability reports
can be leveraged for Management reporting and decision making purpose.
3. For FI we create a separate report which will reconcile with reported numbers.
4. For COPA we create similar report in FI to reconcile.
5. COPA reports are very helpful for Management decision making for example;

Reco. Of FI & CO Profit (COPA)
Customer wise profitability:
Total contribution: 27.55 Cr
90% of total contribution: 25 .00Cr
Total no. of customers: 129
Customers for 90% cont.: 33
Product wise profitability:
Total contribution: 27.55 Cr
90% of total contribution: 25 Cr
Total no. of products: 169
Products for 90% cont.: 32
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
1
18
35
52
69
86
103
120
137
154
171
Cum Cont
Prod No.
Objective:
1. Identification of key customers & products
2. Increase contribution by constant monitoring on key customers and products,
• Improve sales to key customers
• Improve production & sale of key products
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
1
14
27
40
53
66
79
92
105
118
131
Cumm.Cont
Customer No.

Profitability Analysis
Segment 1 Segment 2 Segment 3 Total
FINANCE P&L
Segment 1 Segment 2 Segment 3 Total
COPA P&L

Inventory Valuations
1. The valuation of finished & semi-finished inventory is a statutory and financial
requirement for Balance sheet and Profit & Loss statement.
2. Normally most of the customer using SAP continue to do the Inventory valuation of
SFG and FG outside the system with the help of excel files.
3. We can improve the SAP processes in order to get the Inventory valuation at Actual
Cost directly in SAP system.
4. This valuation will be available with all micro level information such as detail of raw
materials, power, conversion cost etc.
5. This valuation figure is reconciled with all the areas such as Finance, Costing,
Production Planning, Marketing etc. Hence single truth of figure is there for
management.
6. Following is an example of valuation of Inventory with all the details.

Inventory Valuations
RM Cost:
 Qty and Input
material from
BOM
 MAP of input
material
CC/PC Cost
 It’s booked with
combination of
dosage/pack/stre
ngth/class

Budgetary Control System (FM)
1. It is the best internal control system desired by any top management to control the day to
day operational budgets for all the expenditures at respective department level.
2. It can control and monitor the purchase / expenses postings
1. PR to PO to GRN to IV to Payments to Vendor
2. Direct FI expenses postings
3. Consumption of materials.
4. Sales expenses postings.
3. For MIS reporting normally we need to split of Expenses GL into multiple heads E.g. AMC
GL to be split into the AMC of Server, AMC of Software, AMC of UPS, AMC of Computers
etc. This type of MIS requirements we can easily achieve through SAP FM module.
4. The integration with existing module of SAP is very seamless and migration will be very
smooth.

Budgetary Control System (FM)
Budgetary Controls at each of
the following levels:
1. Purchase Requisitions
2. Purchase Order
3. Goods /Service Receipts
4. Invoice verification
5. Financial Expense
With reports of following for
each of the department and
head of expenses:
1. Total budget
2. Released budget
3. Assigned budget
4. Available budget

Parallel Inventory Valuations (1/4)
 The concept of Parallel Inventory Valuation is very much relevant for Multi National
Companies where there is a need to report the financials in Co. Code Currency and
in Group Currency.
 Normally we report the financials in Group currency just by applying the conversion
rate at the date of reporting (i.e. Qtr. End or Year End Exchange rate)
 With this all the other GL Accounts Balances gets converted into the Group currency
from Local currency easily without any difficulties, Except the Inventory and
Consumption of Inventory GL accounts.
 Hence we should seek the solution for Inventory and consumption amount in Group
currency for reporting purpose. It is explained with the help of an example…

Parallel Inventory Valuations(2/4)
The reason for this can be understood with the help of an Example:
The Inventory balance is NIL on 11th Mar’17 in terms of quantity and value in INR (i.e. Local
currency) but it is not NIL in Group Currency, in current practice of conversion.
Exchange Rate USD to INR
1 USD 64 01/01/17
1 USD 66 11/02/17
1 USD 68 11/03/17
Computation of Group currency (USD) value in Current Process
Dates Transaction Qty Amount(INR) Rate(INR) MAP Amount (USD) Working for USD
01/01/17Opening Balance 10.00 1,00,000.00 10,000.00 10,000.00 1,562.50 = 100000/64
11/02/17Purchase-GR 100.00 11,00,000.00 11,000.00 10,909.09 16,666.67 = 1100000/66
11/02/17Goods Issue (15.00) (1,63,636.36) 10,909.09 10,909.09 (2,479.34) = 163636/66
11/02/17Goods Issue (45.00) (4,90,909.09) 10,909.09 10,909.09 (7,438.02) = 490909/66
11/03/17Goods Issue (50.00) (5,45,454.55) 10,909.09 10,909.09 (8,021.39) = 545454/68
Balance - - 290.42

Parallel Inventory Valuations (3 / 4)
The required and correct process of conversion of inventory value into group currency will be as
under;
The Inventory balance is NIL on 11th Mar’17 in terms of quantity and value in INR (i.e. Local
currency) and in Group Currency as well, due to the parallel valuation of inventory in USD (i.e. MAP
being computed in USD after each transaction same as it is being computed for INR)
Computation of Group currency (USD) value in required process
Dates Transaction Qty Amount(INR) Rate(INR) MAP(INR)
Amount in
(USD) MAP(USD) Working MAP
01/01/17Opening Balance 10.00 1,00,000.00 10,000.00 10,000.00 1,562.50 156.25 = 1562.5/10
11/02/17Purchase-GR 100.00 11,00,000.00 11,000.00 10,909.09 16,666.67 165.72 = (16666.67+1562.5)/(100+10)
11/02/17Goods Issue (15.00) (1,63,636.36) 10,909.09 10,909.09 (2,485.80) 165.72 = 15*165.72
11/02/17Goods Issue (45.00) (4,90,909.09) 10,909.09 10,909.09 (7,457.39) 165.72 = 45*165.72
11/03/17Goods Issue (50.00) (5,45,454.55) 10,909.09 10,909.09 (8,285.98) 165.72 = 50*165.72
Balance - - -

Parallel Inventory Valuations (4/4)
Current Practice of Valuation Proposed Practice of Valuation

Corporate Training in FI / CO / FM
Sir even after successful implementation and running of SAP system still there is an urgent need
of good training to the business users in the key areas of Finance, Costing and Budgeting, as
these are the areas which attracts most of the managements attentions.
We have professional trainers to enlighten the knowledge of business users which will really help
them in their working and reporting to the managements.
We have the following packages for professional training;
 One day : Overview, Masters, Transactions, Reports
 One day: How to develop Query reports, Report painter reports
 One day: Customized Course
 Two day: Complete Finance and Costing Module Training with half day
to resolve the issues/concerns.

Automation in MIS Reports
The MIS reports normally in all the organizations being prepared manually every month with the
help of SAP data w.r.t. GL and Cost centres based and Quantitative data from SD , MM and PP
module.
This exercise usually takes at least 2 to 3 days time every month by the MIS team, this time we
can spend in the analysis of the data rather then the preparation of the data.
The MIS reports we can develop from the system in a quick time by using the existing SAP data
from FI, CO , MM, SD and PP modules.
The list of such MIS reports are as under;
1. Expenses analysis for Fixed and Variable
2. Sales expenses analysis at all the levels
3. Contribution margin analysis report
4. Division wise/Segment wise financial statement
5. Plant wise profit and loss,, etc.

SAP HANA Implementation & Migration
• During the SAP HANA Implementation and Migration we provide specialized services to ensure
the appropriateness of the solutions and designing of the new SAP system as per the business
and top management’s expectations.
• The business process consulting and solution review and design in SAP implementation or in
any other field can be optimized and accurate only based on the experience and background of
business consultant who is responsible for the task and not the Brand name of any big company.
• We manage all our business processes such as finance, sales , procurement , payroll etc.
through the SAP S4 HANA system. It gives us a cutting edge advantage as against other business
process consulting companies, here first we ourselves explore and complete the recommended
solutions, in terms of its technical feasibility and practical approach of the solution,

SAP HANA Implementation & Migration
Case Studies of the Expert Consulting for SAP HANA Implementation and Migration:
No Case Studies Facts Impacts Resolution
1 Business Process
issues fixed just
before the start of
SAP System
Standard and best practices
“Chart of Accounts” (COA)as
prescribed by SAP India is being
adopted for implementation of
SAP
• Presentation of financial statements is
not as per the requirements
• No Scalability of COA in terms of new
accounts and processes
• GL Accounts grouping is completely here
and there,
• Designed the appropriate COA as per
the financial reporting requirements of
business industry and statutes,
• Mapping of the old GL accounts with
new GL accounts
2 Business Process
issues fixed just
before the start of
SAP System
Stock identification and valuation
requirements at the DEPOT level
from their multiple
Manufacturing Locations.
• Stock identifications and route cause
analysis is not feasible
• Stock valuation for the respective plants
cost of productions gets merged
• Trial Balance and Balance Sheet available
either at the Depot level or at the
manufacturing plant level.
• We have implemented the concept of
“Signature Carrying” from the
Manufacturing Plants to the Depot
Locations till the end of the processes
3 Business Process
issues fixed after
the start of SAP
System
(by way of separate
project)
For the costing and management
accounting only the minimum
required settings have been done
to ensure successful execution of
other processes
• Valuation of inventory i.e. SFG, FG
• Costing sheet with recovery of
Overheads
• Contribution margin statements for
saleable products,
• It’s a separate project in itself wherein
we have done the solution designing ,
testing and go live of the costing system
4 Business Process
issues which cannot
be fixed after the
start of SAP System
There were four SBU’s running in
a single location, In order to keep
the process simple and straight
forward only one SAP plant code
has been designed for all the four
SBU’s.
• Transfer pricing solutions got impacted
between the SBU’s
• Since there is only one plant code in SAP
so the standard solution of SAP for
transfer pricing is not applicable
• There is no resolution of this lacuna in
designing of the SAP processes

SAP Data Archiving
SAP Data Archiving is a process by which we can remove the unwanted and old SAP Data from our
live SAP database system to the SAP Content Server, The reason for this is as under ;
1. SAP application system speed and performance will improve to a great extent
2. Old data can be accessed as and when required on need basis, as old data will be kept in the
compressed form in the content server
3. Additional space in the live database system will ensure the availability of hardware for future
usage purpose without any additional investment to it.
4. Performance of all Standard transactions such as Sales order creations, billing etc. and reports
such as inventory, trial balance, customer / vendor outstanding reports etc will be improved to
a great extent.

SAP Data Archiving
How we do the Data Archiving:
We identify the
top 30 big SAP
Tables, such as
MSEG, BSEG etc.
Standard
Archiving
objects will be
finalized for all
big tables
Blueprint for all
the archiving
objects. With
Functional
clarity w.r.t. the
selection of data
Configuring the
objects and test,
Then start
archiving in
Production
system
We do the
archiving in PRD
system with
proper planning
so routine work
will continue
After the
completion of
archiving will
test the retrieval
of old data
Indexing of the
Live SAP
database system
to ensure the
availability of
Space
Calculate the
additional space
available in SAP
with
Performance of
Transaction &
reports
Team Required
SAP Basis
SAP Functional
SAP Technical

Infocost Contact Details
INFOCOST SOLUTION PRIVATE LIMITED
Registered Office:
O-201, Glory, CHS, Plot no. 56, Sector 20,
Kharghar, Navi Mumbai ,Maharashtra,
Pin No. 410 210 (India)
Corporate Office :
603, Shelton Cubix, Plot no. 87, Sector 15,
CBD Belapur, Navi Mumbai, Maharashtra, Pin No. 400 614
Contact Number: +91 93265 44693, +91 22 208 70 158
Mail Id: Bhavesh.Rasal@infocost.net

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