cancel
Showing results for 
Search instead for 
Did you mean: 

Settlement in Customer Projects

Former Member
0 Kudos

Dear all,

In our scenario, we have customer projects which are settled to Profitability segment. The client doesn't want to settle the projects periodically. The client wants to settle the project only onces when the project is over. In this case the project will hold cost till the last day.

Client intents to use RA only for information purpose and not for posting the RA value on the project. Hence clients decision seems genuine.

What are the impact of this decision? How often do we really have to settle the project in this situation?

What is the impact of not settling the project at all?

Request your opinion on this issue.

Warm regards,

Srinivas Potluri

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi,

If RA is not a business requirement, the only issue is that all account assigned WBS elements will have balances in them and hence you cannot close the projects. Then ofcourse, consequential issues related to archiving etc.

Muraleedharan.R

Former Member
0 Kudos

Hi Muraleedharan,

Well, the client wants to Settle only once when the project is physically complete.

Once the project is completed, we will settle the project to profitability segment and close the project with zero balance.

I think as far as project accounting goes, we should have no problem. The WIP is anyway being carried out manually.

Request you to let me know, if you see any hidden issues in this scenario.

Warm regards,

Srinivas Potluri

Former Member
0 Kudos

Hello,

Values to FI and CO-PA are transferred from Projects during settlement. Consider a project that runs for a year starting from say Aug07 to Aug08. Since settlement is planned only once - at the end in Aug08, so FI and CO-PA values can not be reconciled at year end in 2007. There will be mismatch in the values.

Also there will not be any WIP and reserves in FI.

Another issue is revenue recognition. How is your client doing this? Are they recognising revenue when the project is set to TECO or delivered or earlier?

Hope the above throws some more light on your concerns.

Thanks,

Sourabh

Former Member
0 Kudos

Hi Murali & Saurabh,

Thanks for your replies.

The cost & Revenues are recognized outside SAP. The RA will be used only for the guidance to recognize cost and revenue.

Warm regards,

Srinivas Potluri

Former Member
0 Kudos

Hi Srini,

The business process as required by you is possible & i don't think there will be any impact. Project settlement can be made on completion of project iteself, n't periodically as your identifying cost / revenue externally.

RA can be used to identify calculated revenue / cost & n't to consider real posting into FI.

Few queries, i would like to ask on your business scenarios. If the project settlemnt is after completion of project only, how project profitability is obtained from period to period. How is balance sheet reporting for the ongoing projects.

Hope this will help you.

Regards,

Rakesh Pradhan

Answers (2)

Answers (2)

Former Member
0 Kudos

Thank you all for your answers.-- Srinivas Potluri

srinivasan_desingh
Active Participant
0 Kudos

Hi Srini,

Sky will not fall down if you settle at end of the project.

If you are recognising Costs and revenues outside SAP system

-I am Curious to know - why do you use SAP Project Systems?

The only issue I can foresee is , You have to post huge amount of costs and revenue in a particular period and it will not be distributed in periods.

Cheers,

Srinivasan Desingh