Introduction to SAP Material Ledger and Actual Costing
This post was originally published by Paul Ovigele on ERPCorp SAP FICO Blog
Material Ledger is SAP’s solution to performing actual costing. It is supposed to contain the benefits (without inheriting the disadvantages) of the two traditional methods of inventory valuation - Standard Costing and Moving Average. Before you can understand the functionality of SAP Material Ledger, it is always good to start with the characteristics of these two approaches.
Standard costing is an effective method of obtaining stable prices for your materials which can be bench-marked against any price fluctuations. You can, therefore, perform variance analysis to better understand whether you are producing efficiently or whether your raw material prices are reasonable. SaP Material Ledger has two main objectives:
(1) Inventory Valuation in up to three currencies and valuation methods
(2) Actual Costing for materials
The real beauty of the material ledger is number (2). This is because it takes variances that occur from inventory transactions and posts them back to ending inventories in order to value them at an actual cost. It does this while retaining the standard cost of the material as a benchmark. You also have the option of revaluing the current standard cost with the periodic unit price (which is the actual cost calculated by material ledger). [Click here to continue reading...]
Book Author at SAP PRESS
5yMaterial Ledger is always a hot topic, Conference shows a lot of ideas of using it, Paul Ovigele always brings transparency to the subject.
President, CEO & Executive Consultant BETTISWORTH & ASSOCIATES
5yA Material Ledger 'Legend'...Paul Ovigele...dont miss his easy to understand presentations at Controlling 2020!
Nicely written ! With S4 HANA it is very much relevant to understand all the aspects of Costing, ML and S4 Architecture
AI | Manufacturers ERP B2B Platforms| Ecommerce, Tech & Marketing Leader | Ex-Qualcomm, Intuit, T-mobile | Projects 50+ Countries
5yOne of the most important topics in #sapfico, ML presented in an easy to understand format by Paul Ovigele, great stuff!
SAP Process Analyst - at SICK Sensor Intelligence
5yI think it's very important to fully understand the functional aspects or Role of ML in S4 moving over from ECC.