Benefits aplenty in the latest SAP HANA based Profitability and Cost Management Solution

In today’s global supply chains, it is common to have several plants involved in the manufacturing of a single product and in turn multiple levels of production crossing plants and different legal entities. This complexity in the manufacturing and management accounting supply chain constantly challenges companies and CFO’s in monitoring their profit, cost and variances.

The ideal solution should have:

• Organization structures closely aligned to the business requirements, to provide effective performance and controls in the finance organization.
• A strong focus on analytics able to give efficient insights, business intelligence, and scorecards that align with financial organizations and responsibilities.
• Streamlined financial processes, eliminating non value-added tasks to focus on business analysis and performance.
• Integrated planning with a single model across the enterprise to improve organizational alignment and financial performance.
• Integrated processes to flow all cost and variances across plants and legal entities.
• Integrated analysis solution, that includes:

• Performance measurement supporting any combination of Characteristic,
• Integration with the source system down to line item,
• Flexible modelling and extension,
• An interactive user-interface.

Why Actual Costing?

Material ledger actual costing allows you to revalue your standard costs to actual costs using a multi-level costing process that takes account of all goods movements within a plant, and provides integrated traceability of actual material cost by product across plant and legal entities

With actual cost component split, the system splits all cost by cost component as actual cost by product:

• Actual Cost of Material by Product
• Actual Cost of Labor by Product
• Actual Cost of Depreciation by Product
• Actual Cost of Sales
• Actual Cost Component

Actual costing enables calculation of internal profit using a combination of the standard costing benefit of stable prices with the moving average costing benefit of actual prices.

Accelerated Finance and Controlling on HANA

Whereas performance issues are quite common in SAP ECC when Material ledger is implemented with integrated planning and profitability analysis, the latest SAP HANA Accelerated Finance and Controlling entirely resolves the issue around performance, taking analysis and usability to an entirely new level.
A number of key accelerators are provided:

• Financial Accounting Accelerator

The financial accounting accelerator provides accelerated and enhanced reporting and analysis

• Controlling Accelerator

The controlling accelerator provides accelerated and enhanced reporting and monitoring for overhead management information.

• Material Ledger Accelerator

The Material Ledger Accelerator speeds up the Material Ledger Period End Closing and provides an ERP based drill down reporting capability for Material Ledger.

• Production Cost Analysis Accelerator

The Production Cost analysis scenario provide new insights into where the production costs are incurred and what issues are affecting those costs.

• Profitability Analysis Accelerator

This provide real-time access to large volumes of financial data in profitability analysis, and accelerates reporting and analysis.

The next generation of financials on SAP HANA is expected to deliver an integrated planning model across general ledger, profit centers, cost centers, internal orders, projects, and profitability dimensions. It also covers activity planning and product cost planning. All stakeholders are enabled to work with the same base data without replication and reconciliation delays.