Period-End Closing Sales Order - Results Analysis

During the billing process, the customer is invoiced for the goods and services delivered for a sales order. You create an invoice or a billing document based on the reference document in Sales and Distribution. Invoicing or billing posts the actual revenues to the sales order.

The sales price can be calculated in the following ways:

• Based on conditions, such as material or customer, using pricing
• Based on the incurred costs if you want to use resource-related billing

The billing type determines the following:

• The type of pricing procedure used for account determination for FI
• Whether the invoices are passed immediately to FI

You can change the status of the sales order item if you do not want to map stock or reserves. The Final Billing status informs the system that no further revenues are expected. The Technically Completed status informs the system that you expect no further costs. In this case, the system does not create further stock or reserves. It cancels existing stock and reserves on the costs and revenues side.

The manufacturing orders contain the full actual costs of manufacturing a material. You can calculate variances at production order level and settle them to Profitability Analysis (CO-PA) as well as to Financial Accounting.

In complex MTO scenarios, you have the opportunity to collect all production costs, including price differences on the sales order item level. You can define the price difference account as a cost element and settle the value to the sales order item when settlement to FI takes place. In this case, it is recommended not to settle the variances of the production order to CO-PA, because the sales controlling is performed on the sales order item which is the cost object.

The results from results analysis are transferred to Financial Accounting (FI), Profitability Analysis (CO-PA), and Profit Center Accounting (PCA).

You can also transfer the following values to FI and CO-PCA:

• Inventory values
• Reserves for unrealized costs
• Reserves for imminent loss
• Reserves for complaints and provisions
• The costs of sale (if you are using non-valuated sales order stock and the cost-of-sales accounting method in FI)

You can settle the following with CO-PA:

• Cost of sales or calculated revenue
• Reserves for imminent loss and complaints

Calculating the percentage of completion (POC) for the cost object is the starting point for calculating accrual values.

The period-based costs and revenues of a sale are calculated from the POC. If these values are settled to PA, the profit generated in CO-PA differs from the profit generated in FI and PCA.

Stock and reserves are calculated in terms of the costs and revenue, depending on the data model.

Stock and reserves are transferred to FI and PCA so that the profit generated there is the same as the profit in CO-PA.

The system can carry out results analysis for cost objects automatically. The type of results analysis method you choose depends on your business requirements. Several methods can be used simultaneously in different business areas. The results analysis method contains the rule for calculating results analysis data.

You have planned revenue of 3,000 and costs of 2,000 for the sales order. You have actual costs of 1,000 but no revenue.

The system calculates the following data during results analysis:

• Revenue – 0
• Cost of sales – 0
• Costs to be capitalized in stock (WIP) – 1,000

During the settlement process no line items are generated for CO-PA. You settle the capitalized costs to FI and PCA. The actual amounts of 1,000 profit and 1,000 loss are generated on the profit and loss account because the inventory change account is settled to the profit and loss account. As in CO-PA, FI and PCA do not generate any profit.

You have actual costs of 1,000 and actual revenue of 1,200.

The system calculates the following data during results analysis:

• Revenue – 1200
• Cost of sales – 800
• Costs to be capitalized in stock (WIP) – 200

CO-PA indicates a profit of 400. You settle the capitalized costs to FI and PCA. During settlement, the posting is created as WIP against inventory change account 200. Because the inventory change account is settled to the profit and loss account, an actual revenue of 1,200 plus 200 inventory change in profit and actual costs of 1,000 in losses are generated on the profit and loss account. As in CO-PA, FI and PCA generate a profit of 400.

You have actual costs of 1,800 and actual revenue of 3,000.

The system calculates the following data during results analysis:

• Revenue – 3000
• Cost of sales – 2000
• Reserves for unrealized costs – 200

Revenue minus cost of sales generates a profit of 1,000. You settle the reserves to FI and PCA. Because the inventory change account is settled to the profit and loss account, an actual revenue of 3,000 is indicated as profit. Actual costs of 1,800 plus the inventory change of 200 are indicated as a loss by the profit and loss account. As in CO-PA, FI and PCA indicate a profit of 1,000.

You have planned revenue of 3,000 and costs of 2,000 for your sales order. You have actual costs of 1,000, but no revenue.

The system calculates the following data during results analysis:

• Costs affecting net income of the sale (cost of sale) – 1,000
• Revenue affecting net income – 1,500
• Revenue in excess of billings – 1,500

Revenue minus cost of sales generates a profit of 500. You then settle the capitalized costs to FI and PCA.

Based on posting rules, which must be maintained in Customizing, settlement generates the following posting: inventory account against inventory change account, that is, 1,500. Because the inventory change account is settled to the profit and loss account, actual amounts of 1,500 (profit) and 1,000 (loss) are generated on the profit and loss account. As in CO-PA, FI and PCA generate a profit of 500.

You have actual cost of 1,000 and an actual revenue of 1,500.

The system calculates the following data during results analysis:

• Costs affecting net income of the sale (cost of sale) – 1,000
• Revenue affecting net income – 1,500
• Revenue in excess of billings – 300

Revenue minus cost of sales generates a profit of 500. You then settle the capitalized costs to FI and PCA.

Settlement generates the following posting: inventory account against inventory change account, that is, 300. This is based on posting rules, which must be maintained in Customizing. An actual revenue of 1,200 plus 300 inventory change in profit and actual costs of 1,000 in losses are generated on the profit and loss account. As in CO-PA, FI and PCA generate a profit of 500.

You have actual cost of 1,800 and an actual revenue of 3,000.

The system calculates the following data during results analysis:

• Costs affecting net income of the sale (cost of sale) – 1,800
• Revenue affecting net income – 2,700
• Revenue surplus – 300

Revenue minus cost of sales generates a profit of 900. You then settle the capitalized costs to FI and PCA.

Settlement generates the following posting: inventory change account against inventory account, that is, 300. This is based on the posting rules, which must be maintained in Customizing. An actual revenue of 3,000 in profit and actual costs of 1,800 plus 300 inventory change in losses are generated on the profit and loss account. As in CO-PA, FI and PCA generate a profit of 900.