Reduce the Number of Costing Run Messages by Using Material Status

  • by John Jordan, ERP Corp
  • July 15, 2003
A six-month or yearly cost rollup is a task most accountants usually don't look forward to. R/3 removes a lot of the routine, manual work, typically reducing the time taken from a month to several days. However, there's more to the task than just executing the costing run. The cost accountant's role becomes one of analyzing costing run messages and taking action on any highlighted problems. Hundreds or thousands of messages can result from a costing run. This article describes one source of such error messages and presents a little-known technique - the use of the material status field in the material master - to reduce the volume of messages to be analyzed. This allows cost accountants to spend more time addressing the issues arising from relevant messages.

A six-month or yearly cost rollup is a task most accountants usually don’t look forward to. R/3 removes a lot of the routine, manual work, typically reducing the time taken for a rollup from a month to several days. However, there’s more to the task than just executing the costing run. The cost accountant then must analyze costing run messages and take action on any highlighted problems.

Hundreds or thousands of messages can result from a costing run. These problems usually include logistics master data issues that need correction, such as a missing bill of materials (BOM) or routing (task list) for an in-house-produced assembly. However, as you will see, the system can also generate unnecessary error messages. This article describes one source of such error messages and presents a little-known technique—the use of the material status field in the material master—to reduce the volume of messages to be analyzed. This allows cost accountants to spend more time addressing the issues arising from relevant messages. First, I’ll give some background on system messages.

System Messages

To ensure the integrity of the calculated standard price during a costing run, the system exhaustively checks all related master data, configuration, and settings. A system message is generated for every problem detected, categorized by importance:

  • I      Information: not necessarily a problem, for information only
  • W    Warning: problems that may or may not affect the cost estimate
  • E     Error: problems that will cause the cost estimate to be incorrect

John Jordan

John Jordan is a freelance consultant specializing in product costing and assisting companies gain transparency of production costs resulting in increased efficiency and profitability. John has authored bestselling SAP PRESS books Product Cost Controlling with SAP and Production Variance Analysis in SAP Controlling.

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