CO_Additive_Cost_Concept_17151748398.pdf

CO Additive Cost

1. Additive Freight
Cost in SAP
S/4HANA
In SAP S/4HANA, managing the additive freight cost for semi-finished
goods (SFG) transfers between plants is a crucial process. This
presentation will guide you through the steps involved in accurately
estimating, tracking, and actualizing these freight costs to ensure efficient
logistics and accurate cost accounting.
by Abid Aqeel

2. Estimating Freight Costs
1Determine Freight Rates
Research and maintain a database
of freight rates for different lanes
and carriers.
2Calculate Estimated Costs
Use the freight rates, weight, and
volume of the SFG to estimate the
freight costs for each transfer.
3Add to Cost Estimate
Include the estimated freight costs in the overall cost estimate for the SFG.

3. Tracking Freight Costs
1STO Creation
Freight costs are added to the STO
(Stock Transfer Order) when the SFG
transfer is initiated through purchase
Order
2 Actual Freight Booking
The actual freight costs are booked
when the transportation service is
utilized.
3Cost Posting
The actual freight costs are posted to
the relevant cost elements in the SAP
system.

4. Actualizing Freight Costs
STO Purchase Order
The actual freight costs are
added to the STO purchase
order, which is then used for
the final cost settlement.
Variance Analysis
Any difference between the
estimated and actual freight
costs is analyzed and
reported as a variance.
Month-end Posting
The actual freight costs are
posted to the relevant General
Ledger accounts during the
month-end closing process.

5. Benefits of Accurate Freight Cost
Management
Improved Cost Visibility
Accurate tracking and actualization of freight
costs provide better visibility into the true
cost of SFG transfers.
Enhanced Decision-making
Detailed freight cost data enables more
informed decision-making on logistics
strategies and supplier selection.
Reduced Freight Costs
Continuous monitoring and optimization of
freight costs can lead to significant long-term
savings.
Accurate Costing
Incorporating actual freight costs into the
SFG costing ensures more precise product
pricing and profitability analysis.

6. Challenges and Considerations
Data Accuracy
Ensuring the accuracy and
timeliness of freight rate
data and actual freight cost
information.
Process Integration
Integrating the freight cost
management process with
other logistics and
accounting functions in SAP
S/4HANA.
Stakeholder Alignment
Aligning the expectations
and requirements of different
stakeholders, such as
logistics, finance, and
procurement teams.

7. Best Practices for Effective
Implementation
Maintain
Freight Rate
Database
Regularly update and
maintain a
comprehensive
database of freight
rates for different
lanes and carriers.
Automate Cost
Calculations
Leverage SAP
S/4HANA's
functionality to
automate the
calculation and
posting of freight
costs.
Robust Reporting
Implement detailed
reporting and
analytics to track
freight cost trends
and identify
optimization
opportunities.
Collaborative
Approach
Foster cross-
functional
collaboration between
logistics, finance, and
procurement teams to
ensure efficient
freight cost
management.

8. Conclusion
Effective management of additive freight costs in SAP S/4HANA is crucial for maintaining accurate cost
accounting, enhancing decision-making, and optimizing logistics operations. By following the best
practices outlined in this presentation, organizations can achieve greater visibility, control, and cost
savings in their SFG transfer processes.