Transfer Price & Material Ledger

[Former Member]

We have to have transfer pricing for profit centres. Eventhough we have only legal valuation in our case, Material Ledger activation is mandatory otherwise system does not permit us to activate transfer pricing. Hence, we have decided to activate ML eventhough we dont want it in our case.

Hence we will activate it and we will not perform anyother activity with respect to the Material ledger.

Will this be OK ? Will it affect any other transactions in our case ? Please offer your inputs.

[ajaycwa1981 · Accepted solution]

Hi Niki

ML has 2 purposes..

a.. To store multiple valuations

b. Actual costing...

If I am understanding your requirement correctly, What you want is a without b....

Yes, thats possible! But, one piece of advice from my side.. Clients often have a tendency to expect things which they really dont want or they dont have the capability to maintain in the long run... Differentiate between "nice to have" and "must to have" and make your choice accordingly

Regards

Ajay M

[Former Member]

thank you all for the inputs.

[Former Member]

Hello Nikitha

What was the final solution you implemented for this issue ?

Best Regards

[Former Member]

I activated the material ledger and made all plants productive for ML.

[Former Member]

hi nikitha..

I think you store your data in Profit Center Accounting in the transaction currency, then you can only use legal valuation .

kkumar

[Former Member]

hi niki...

I think your requirement is to flow the value to frofit centre. you are right that ML activation is required to get transfer price for different valuation.

There are two part in ML :

1. To carry out material prices in different curriencies/valuation

2. Actual costing to calculate periodic price

Your requirement is first one and for which you can activate ML without activating "Actual costing". This will allow you three different valuation (legal valuation, valuation for report purposes and profit centre valuation)

One thing remember, it is better to use Price controll as "V" and Indicator as "2"

thanks

kkumar

[Former Member]

Hi

Still you have not understood that we have only one valuation. I reproduce part of your answer as:

"I think your requirement is to flow the value to frofit centre. you are right that ML activation is required to get transfer price for different valuation."

We have only one valuation for company code and profit centre. We will use only legal valuation for both. But Material Ledger is for multiple valuation, right ? Still I am not able to activate Transfer pricing without material ledger.

[Former Member]

Hi I dont agree with Sarda , you should go with Std SAP as much as possible if functionality is available.

Just activation ML will not have any major impact on your system (unless u go for activation of actual costing related configs).

Activation of ML w/o actual costing you may consider the following : -

- ml tables will be populated n may need archiving

- mat master data a/c view will show some ML related data (but no impact on transaction)

- If ML is activated in an existing system u may need to carry out certain ML prodn start-up steps , SAP notes are available for ref.

- No addl monthend steps reqd.

Hence I wud suggest to activate ML & forget & use Std Trf price.

ROMY

[Former Member]

@ROMY ... How will system calculate Profit Elimination is there is no ML run ??

If we donot use ML are you sure that transfer pricing will work as expected and w/o any inconsistencies .. as per my knowledge goes TP and ML are complementary.. and will never suggest somebody activating ML and not using it...If you are not using ML.. are you sure that all reports will be available w/o using transfer price ...

If inconsistencies happen , Nikki's life will be difficult and SAP will charge to correct it..

Hence ., never recommend ML without using it .. The amount of time required to activate ML can be used to do customization ...

Do agree that we should use Standard SAP.. but cannot justify activating ML w/o Using it..

Regards

Sarada

[Former Member]

Sarada , I know that there are pain in ML but all when you go for Actual Costing , Else just activate & forget (just to store data)

We have implemented TP for 2 clients W/o actual costing & they are smooth & no major issues.

ML activation hardly takes time , all std config reqd which is already in place.

Profit elimination will req customized reports only but all data flow will be in std (tats wat we do in most case , reports are mostly customised as per client reqt).

ROMY

[Former Member]

Thanks Romy for the same .. If you have done the same before and confident of no issues.. Nikitha .. please take Romy's word..Logically its always possible but I always follow to take more care when doing ML .. as once done it cannot be reversed ..and inconsistencies are hard to correct without SAP help..

In one of the client we worked.. we decieded to go for customization .. Anway thanks Romy for sharing you view ..

On question from my knowledge view and also Nikhitha may also need.. have you done all the following configurations for your client .in ML w/o actual costing . or left serial No: 9 to 11 configurations...

1 Assign Currency Types to Material Ledger Type OMX2

2 Assign Material Ledger Types to Valuation Area OMX3

3 Maintain Number Ranges for Material Ledger Documents OMX4

4 Configure Dynamic Price Changes OMX5

5 Reasons for Price Changes

6 Define Movement Type Groups of Material Ledger OMX7

7 Assign Movement Type Groups of Material Ledger OMX0

8 Define Material Update Structure OMX9

9 Assign Material Update Structure to a Valuation Area OMX8

10 Activate Actual Cost Component Split SPRO

11 Activate Distribution of Usage Variances

Will appreciate details a bit as can be used in future references also

Regards

Sarada

[Former Member]

I am very happy to see that lot of deliberations happened from your side.

To be more precise, let me put our scenario as follows:

- We have only one valuation viz. legal valuation (no multiple valuations)

- We want to use Transfer Pricing

- Without Material ledger, system is not allowing to activate transfer pricing.

We wrote to SAP quoting our situation but I think even after 2-3 rounds of interactions, SAP did not understand our situation that we require only one valuation and activate the transfer pricing. They sent us some notes all of which explains about multiple valuations, material ledger and transfer pricing. That is why I have raised this issue here.

Now, the options you have suggested is to use a customized program or activate ML without actual costing.

Yes, we do not want to have actual costing and have informed our client that ML only will just be activated for the sake of TP, wihout any further utilization of its functionalities.

One more pont, regarding settings done, I have not done any settings related to SPRO actual costings. Regarding the 9-11 settings as pointed out by Sarada, I noted that:

9 Assign Material Update Structure to a Valuation Area OMX8 : Settings are done there with std materiial upd structure. (Is this relating to Actual costing ? Pl. tell me).

10 Activate Actual Cost Component Split SPRO : Not activated.

11 Activate Distribution of Usage Variances : Not done anything.

[Former Member]

Hi Nikkitha

You want to do all the configurations for ML , activate it and not use it ............... , its never recommended as per my opinion ..

Transfer pricing in PCA needs ML as ML supports multiple valuation approaches.. hence i believe that Transfer Pricing and ML are complementary ..SAP Note 122008 - Activate transfer prices/mult.valuation approaches

Why dont you use custom table to take care of Transfer Pricing Requirement is your project..instead of using Transfer Price functionality in SAP with ML .Its done for our client ..

For doing customization .. you need to do following..

1. Create a Z table to store Cost + Mark Up values ..

2. Create a Rountine in SD to pick the price from Transfer price table created in Step 1 .

3. Create a customization in CK11N that if special procurement key exists .. then read the table in Step 1 for cost calculation ..

4. Create a ABAP report to calculate the profit elimination to be done at month end ..

Your decision to have ML should not depend on transfer pricing . If business needs Actual costing .. then only use ML otheriwse use the ABAP customization to take care of Transfer pricing requirement ..

Regards

Sarada