Is VA88 necessary if no MTO/MTS scenario

[former_member366673]

Dear Experts,

I am not clear about the MTO/MTS process, but would like to know when is VA88 used? (S4 for both account based and cost based COPA)

i read some blogs about it, and saw a post saying "If Sales order is created with account assignment as profit center then no need of settlement on VA88 of sales order." Can you also share what this means? Why VA88 is no longer needed? What about those without assigned profit center, will those be needing settlement?

if there is no MTO/MTS process, is VA88 still needed to be used? What are the alternatives if VA88 will not be used?

what configuration is needed?

Thank you

[brahms86]

Hello Toni,

before I answer your question let me remark the following:

Your question is about whether the sales order position serves a CO account assignment. All revenue and expense accounts, for which you have a cost element assigned (still holds true in S/4 as assigning cost element category to the P&L account), need to have an CO object assigned when there is a posting. So e.g. the typical default account assignment for revenues is a profitability segment (as you have CO-PA). But there are other options, like in the MTO scenario, where you gather revenues AND expenses on the sales order position as a CO account assignment object before you settle it to CO-PA in a second step. The advantage is, that you can gather and report all revenues & related costs on the sales (position) level. In the MTS scenario you do not produce for a specific sales order, so there is also no need to e.g. assign production costs to a specific sales order.

So you will need VA88 only if you use a sales order position as a CO account assignment object.

There are reports in CO where you can check balances by CO object type.

Other scenarios for using VA88 outside MTO include e.g. service orders in CS. Or any custom scenario where you assign costs in Accounting directly on sales order level (like e.g. transport costs) instead of posting them to a cost center.

KR,

Steffen

[former_member366673]

Dear Steffen,

Thank you for the inputs. I am trying to understand possible alternatives of instead using VA88 or basically the sales order position as a CO account assignment if the normal SD-COPA process can be enough already? Its because currently we do not use VA88 or the SO as a cost object, and we have new company codes in the legacy system that is currently using it, but we're trying to see the alternatives for them instead of using va88.

If using the Profit Center to the sales order, is that sufficient also? Would this be valid for revenues only, how can the related costs be handled?

Many thanks!

[brahms86]

Hello Toni,

I wonder, why you are so eager to eliminate VA88, but anyway, if you want to go ahead please identify first of all the exact business process, that posts to sales order positions. And then assess the value of it. But I can assure you, profit center is not an alternative to sales order position as a CO account assignment. First of all: Profit Centers are no valid CO account assignment. Cost Centers, internal orders, WBS elements, profitability segments (=CO-PA), etc. are valid CO account assignments.
In addition: profit centers are general organizational master data, which is much more general, than a specific customer sales order.

You need to go back and understand the business process and why it was configured this way. Then you can assess whether you still need the information on sales order level, and then you can think about alternative account assignments, that is getting rid of VA88.

I hope this answers your question.

KR,

Steffen

[former_member366673]

Dear Steffen,

We do not have the current configuration for settlement of VA88 hence we're trying to see if internal orders can be used instead as a cost object in the sales order. And maybe perform settlement in KO88 instead.

Or maybe you can share some advise on how to configure it?

Many thanks!

[brahms86]

Hello Toni,

of course you can use the internal order as an account assignment object in the sales order position.

If you use existing internal orders, that is fine. Just the sales process needs then to be adjusted for this.

But then you loose the information on the sales order as a context in CO-PA.

If you want to preserve this context, then you need to create a new internal order for each sales order.

That would be redundant work and you can stay with your current setup, where this type of account assignment is fully automated in SD.

But again: I still think it would be beneficial to understand better, what the current process and business requirements behind it looks like.

KR,

Steffen