Custom Project Settlement

[former_member513364]

Hi PS Gurus,

Your comments and valuable suggestions will be highly appreciated, though a basic question.,!!

We have a customer project with MTO scenario. There will be around 6 to 7 WBS clubbed under a single network. around 4 WBS will have internal activity and BOM attached to it.

The doubt is do we really need to settle the project, COPA is not active. Client is intrested to have the cost project wise and no any result analysis happens after project closure. As per client requirment, we have expenses and revenue project wise in reports.

Pleae guide like do we want to go for project settlemt in this case. If yes what difference it would make to books in financial aspects. If we are not going for settlement, where should we post the variance costs.

Eptertise required. Please share your thoughts and correct process. Thanks.

Regards,

AM

[sanjeevc]

Hi Murthy,

you need to convey your client as if they don't required capitalization :- According to sap standard project object is temporary cost collector, so cost can not be sit on project object forever, so project need to go with settlement process.

financial aspects like cost will not updated in profit and losses accounting and balance sheet as well.

not sure but variances cost would be posted on cost center. if your client says cost  project.

wait for more comment from expert.

Regards,

Sanjeev

[sunil_yadav2]

Dear AM,

In Standard SAP, we have to settle all the cost and revenue to COPA. But if any client doesn't want to have RA so we have option to settle all revenue to Related GLs.

Customer projects are not necessarily always settled to COPA.

You can settle them to FI G/L accounts but you need to define source structure in the settlement.

for this refer below link:

http://help.sap.com/saphelp_470/helpdata/en/4c/2273b646e611d189470000e829fbbd/content.htm

Rest wait for experts comments.

thanks

Sunil

[Former Member]

Hi Murthy,

Before i comment any further on the query you raised, i would suggest you to search the forum or read SAP Help and try to understand the concept of Settlement. Try to find out in what scenarios settlement is required, why it is done and how it is done? Also try to go through the topic of RA, understand its importance and check how it works.

I am pretty sure that answers to all these queries is there in SAP Help. Besides, you should ask your client why they do not want to go for RA and Settlement. It is highly recommended that any project that generates revenue or in simple terms, is a customer project, should undergo the cycle of RA and Settlement. This would help in proper Management reporting and proper updation of data in the Books of Accounts.

Best Regards,

Gokul

[former_member513364]

Hi Gokul,

Thanks for your time in explaning the necessacity of RA and settlememt.

out of 7 WBS I said earlier, only 4 will have Prod Orders and settlement of these Prod Orders is to materials as per the settlement profile in the order type for production orders. balance 3 WBS will collect the costs from manul posting in FI(eg travel charges incurred by proj manager against that project etc.). Also Invoice is raised by FI through vf01 after delivery and PGI through vl01n and vl02n in SD modules. because of the above, revenue also hits the books properly.

With these methods, G/Ls in FI is getting the updates properly and client does his period end closing activities from FI, this closing activities updates the Bs accounts accordingly. hence they are not really looking for PS closing activities.

With the above explained context, I am really not able to figure out the gaps in postings that happens wrt PS like variance between my plan and actuals and also the requirement of settlement.

Experts opinion on the correctness of the above required to take it up further with client.

Thanks n Regards,

AM