Avoid Manual Errors by Automating Your Costing Run

  • by Muralidharan Sethuraman, Director Enterprise ERP IT Finance, Johnson Controls
  • June 15, 2008
Move beyond standard functionality by integrating the steps for product cost planning into a single ABAP program that you can schedule as an automated background process.
Key Concept

Executing the costing run transaction as an automatic batch program without any manual intervention eliminates system issues, makes the process highly scalable, and makes it easily manageable by a central costing team. Implementing this functionality helps large enterprises accurately cost any new materials created on a day-to-day basis and handle the process in a cost-effective manner. It helps avoid situations such as when new material creation by the central master data team is not communicated to the costing team in a timely manner. When a material movement happens before the cost is created for the material, it can lead to wrong financial data. The automatic costing run ensures that all new materials are costed on a day-to-day basis without delay.

Costing of raw materials, finished goods, and semi-finished goods is a key business process in the manufacturing industry. A bill of materials (BOM) for a single finished product may contain 600 to 1,000 sub-assembly parts or component items, and variants of the finished product increase the number of parts that a company needs to cost. Typical product costing is a detailed process requiring a significant amount of manual intervention.

The standard SAP ERP Central Component (or R/3) transaction for cost planning, CK40N, allows for costing of multiple materials together in a single transaction, but the multiple steps associated with it take a long time to execute. Even if you schedule the different steps in a costing run transaction as a background job, the process still requires you to define parameters for each step, including the costing run definition and creation of a material selection list. Further, manual scheduling can lead to locking errors when you schedule costing runs for multiple plants in the same company code together.

By automating the task, you can avoid the potential pitfalls of the manual process and also optimize system performance by scheduling the batch job to run during non-business hours. I’ll show you a quick overview of the costing steps using transaction CK40N and then explain how to automate this process.

Muralidharan Sethuraman

Muralidharan Sethuraman is director enterprise ERP IT finance at Johnson Controls. He has more than 16 years of industry experience leading and managing multiple SAP implementation and business transformation programs across geographies. Muralidharan is currently leading the SAP S/4HANA program at Johnson Controls. He specializes in SAP Financials and has done design lead, solution architect roles in global SAP implementation programs. Muralidharan is a subject matter expert in the areas of product cost analysis and management, inventory and working capital management, management reporting and profitability analysis, financial analytics and reporting, and business planning. He has published multiple articles in Financials Expert in these areas.

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