Settlement of New Product Development Projects

[Former Member]

Hi Experts,

We are working on New Product Development project. Our client involves in development of a proto-type as per their client's requirement. Receipt of Sales order, Design, Production of Prototype Sample & customer approval are the stages invloved.

But no revenue will be generated until the delivery & approval of Sample.

How can we settle these kind of projects? Please advise.

Thanks & Regards,

Kabir

[virendra_pal · Accepted solution]

according to me this should be treated as an investment project and the costs should be capitalised once you have the new product developed

then when you start commercial sales of the product it would be treated as revenue prohjects or which you should follow the standard for customer projects

[Former Member · Accepted solution]

Dear Virendra,

Thank you so much for the reply. Full points awarded.

I will treat this as an Investment project till the development & delivery of the prototype. After the product is approved by the customer, it will go into normal production for which my client will not use PS.

Do i have to settle the WBS to cost centers? Please advise.

Best Regards,

Kabir

[virendra_pal · Accepted solution]

you should settle to AuC and finally to the fixed asset

[Former Member · Accepted solution]

Dear Virendra,

Thank you for the reply. This is my 1st settlement am doing. Can i use the Prototype as Asset Under Construction and Which is the Asset here? Please enlighten me with few tips on Sender and Receiver in this case. It would help me a lot.

Best Regards,

Kabir

[Former Member]

You can have a seperate cost center for these types of development activities and settle the costs to the cost center.

Venu

[Former Member]

Hi Hemant & Venu,

Thanks for the replies. Points awarded.

@Hemant...There is no billing element used in this project. I guess i cannot consider this as an Investment project fully as it does not have an Asset. Please correct me and advise.

@Venu...Can i settle all objects to the cost center for this kind of project? Please help me with Settlement configuration Tips.

Thanks & Regs,

Kabir

[Former Member]

Hi

Please go through [Recommendations for customer projects|http://help.sap.com/saphelp_45b/helpdata/en/4c/2273b646e611d189470000e829fbbd/content.htm]

Regards