If you are an SAP Consultant working in CO – Controlling, you probably worked or will work eventually in a Production / Manufacturing environment where at Month End you will have to Calculate WIP (Result Analysis in SAP language) either in Production Orders or in Cost Collectors.
So for that you will have to configure the whole Result Analysis functionality and the whole nine-yard. You also need to make sure that your Cost Objects (Production Orders and/or Cost Collectors) are getting assigned the proper configured Result Analysis Key.
But … even with all of that, your WIP calculation might not work correctly.
I have been called in the past by several clients to help solve WIP Calculation issues in SAP and was surprised with what I found.
I went to a client once (Dairy products manufacturer) that every month they would do a Journal Entry of around $ 1.5 million to reverse WIP from their Balance Sheet on a constant basis. They were desperate because that JE was taking them a lot of time and also month by month was constantly growing and never going down. It was a snow ball out of control.
After that client, I went to another one (Pharma) that had a similar situation, but their numbers were so big that they never realized of the situation and they never did anything like the other trying to offset it with a manual JE.
Some consultants (or most) configure the functionality, do a little bit of testing and integrated testing during the course of the project and they stick around for 1 or 2 months after the go-live. But the real effect of this issue is not known and seen until a couple of months down the road and by that time the consultant is long gone to his next project / client.
To calculate WIP the system uses the Cost Object Status to determine if it has to calculate WIP or not. All costs accumulated in a Production Order at month end, will be considered WIP if the order has not been set to TECO – Technically Completed or DLV – Delivered. If the order is in one of those 2 statuses, then the system will cancel / reverse the WIP calculation or not calculate WIP at all and that will create a JE posting at the time of Settlement.
So, What was wrong with the WIP Calculation of this clients ???
It was something so simple but at the end something that not a lot of consultants knew.
The Cutoff period is key for the WIP calculation, as it establishes the period until WIP should consider the Orders in an open or close period. Consider it like the FI period (OB52) but for WIP, not literary.
*** On a side note about this subject, now in S/4 HANA we do not have the SAP Menu as we used to have were you would find all the steps. Instead, we have the Fiori Tiles and we need to know the right steps and order of execution. But for unknown reasons, SAP has not delivered any Fiori Tile for this Cutoff period (Tcode KKA0) nor is included in any standard catalog. So you will have to ask your Security team to build a Fiori Tile out of a GUI Transaction so then can be added to a Catalog and a Role for execution within the Fiori Launchpad.
If someone knows this reason, please let me know. I am curious to know why. Is it related to S/4 changes that they have done ? Never read anything in the Simplification Notes about it. Also researched OSS Notes before writing this and did not find anything on the subject.
Unfortunately, there is no quick way of scheduling and automating this Tcode so it would change the period automatically. It has to be done manually prior to Month End.
If your Company and/or Project needs to implement this or any of the functionalities described in my Blog, do not hesitate to reach out to me and I will be happy to provide you my services.