Sap business-one-standard-cost-roll-up-guide

LBSi Enhance Standard Cost

User Guide

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Table of Contents

Topic Page

Overview......................................................................................................................... 4

Menu Selection ............................................................................................................... 5

Define Price Lists ............................................................................................................ 6

Set BOM Defualt Price List ............................................................................................. 7

Price List Copyt .............................................................................................................. 9

Review Default Price List .............................................................................................. 11

Update Default Price List .......................................................................................... 12

Crystal Reports .............................................................................................................. 13

Update BOM Prices....................................................................................................... 16

Update Parent Item Prices Globally ........................................................................... 16

Inventory Revaluation ................................................................................................... 19

View Inventory Revaluation Transaciton ................................................................... 20

View General Ledger Transaction ............................................................................. 21


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Overview

LBSi Enhance Standard Cost is designed as an integrated product to SAP Business One

and provides enhanced capabilities for Bill of Materials Cost Roll Ups and Standard Cost

management including inventory revaluation at the new standard cost.

Features:

• Uses Standard SAP Business One: Item Master, Price Lists, and Bill of Materials.

• Defines default price list for bill of materials.

• Routine to copy one price list to another for comparison purposes.

• Enhanced standard cost revaluation automatically revalues your inventory at the

new standard cost.

• Crystal reports

Enhance Standard Cost consists of these four (4) key areas:

1. Define Price Lists � Add a new price list to Inventory and set to the default price list for Bill of

Materials.

2. Update Price List

� Update costs by copying target price list to default price list (source) for

bill of materials. i.e. update new price list from Last Purchase price or

Last Evaluated prices.

� Save old price lists for history purposes

3. Evaluate impact of new pricing � Review new price lists, crystal reports and make any necessary

adjustments to the price list

4. Run standard SAP : Update Parent Prices Globally

� Standard SAP process that updates bill of materials with prices from the

source price list.

5. Revalue inventory to new standard cost � If your inventory valuation method = standard, you must revalue your

inventory to the new standard cost.

.


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Menu Selections


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Enhance Standard Cost: Define Price List

Define the price list to be used as the target and source costs for the Bill of Material cost roll-ups.

1. zCurrentCost is the price list that will maintain the updated latest purchasing cost

information. Note that this price list’s Base Price List is Last Purchase Price.

a. zCurrentCost is the source price list for cost roll-ups

2. zStandard price list is price list that will be utilized in the Cost Roll Ups and is the default

price list in the Bill of Materials, BOM Default = Yes.

a. zStandard is the target price list for cost roll ups

How to Access: Main Menu > Inventory > Price Lists > Price Lists

Adding a new Price Lists

To add a new Price List, click on the Data in the upper tool bar and then Add Row.

Enter data into fields and click Update when done to add the new Price List.

Field Information:

• Price List Name: Assign a name to the price list

o Hint: If you are using Standard Cost valuation name zStandard Cost or if you are using

another valuation method name zCurrent Cost.

• Base Price List: The base price list on which the prices in this price list are to be calculated.

• Factor: factor by which the base price list is multiplied to calculate the prices in the selected

price list.

• Rounding Method: Rounding method used for calculating the prices

• Authorization Group: Group name for authorization rights to the price list

• BOM Default: Defines whether this price list is the default price list for Bill or Materials.

o Mark as Yes to use this price list as the default


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Enhance Standard Cost: Set BOM Default Price List

All Bill of Materials must reference the zStandard or default price list in both the Header and Rows

for the BOM Cost Roll-up to process correctly.

Note: After adding your default BOM price list, any new BOM’s will be created with this default

price list. Any existing BOM’s will need updated manually to the default price list.

How to Access: Main Menu > Production > Bill of Materials

To manually update the BOM to the default price list, click on the Price List drop down in the upper

right of the screen. Select zStandard price list and then the Update button at the bottom of the

screen.


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The existing BOM will now reference the zStandard default price list.

Next you must click on the orange arrow next to Product Price to update the new Product Price

based upon the zStandard default price list.

The Product Price field cannot be blank for the BOM Cost Roll-Up to work correctly.

The screen display above shows a correctly updated BOM to the zStandard price list.


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Enhance Standard Cost: Price List Copy

The Enhanced Price List Copy function updates the zStandard price list, default BOM price list,

with the changes in the zCurrentCosts price list reflecting the most recent purchased costs.

Update default zStandard price list with new purchase costs from zCurrentCost price list using the

Price List Copy function.

How to Access:

Main Menu > Inventory > Inventory Transactions > Enhance Standard Cost > Price List Copy

Field Information:

• Procurement Method: Defaults to Buy

• Item Group: Select specific item group to copy or All

• Starting Item: Select starting item for copy of leave blank for all

• Ending Item: Select ending item for copy of leave blank for all

• Source Price List: Select source price list for copy of purchase costs

• Target Price List: Select target price list – this should be your default BOM price list

Click Update to copy the price list.

Indicate Yes to Continue.

Note: This process may take a few minutes depending on the number of items in the price list.


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When completed a message will indicate if any errors were encountered.

Recommendation:

You may want to preserve the data of your current zStandard price list for historical purposes prior

to updating or copying new costs.

You can do this by creating a new Price List for the history data.

Example:

If you are evaluating your new Standard Cost for 2011, create a price list called zStandard2010 to

retain your 2010 standard costs.

Perform the Copy Price List function to copy zStandard to zStandard2010.

This will preserve your 2010 standard cost data for history and future comparison reporting. You

can then proceed with updating your price lists as described above.


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Enhance Standard Cost: Review Price List

Review the updated zStandard Price List for items that have outdated or no cost displayed.

Note: Keep in mind that only Purchased (Buy) items are copied to the zStandard Price List.

How to Access: Main Menu > Inventory > Price Lists > Price Lists

Double click on the row number of the zStandard Price List to display the details.


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Look for items that for items that have outdated or no cost displayed.

• Items that have not been purchased and have no transactions in the system will not have a

cost listed.

• If an item has not been manufactured or purchased for some time, a review of the item costs

would be recommended.

Use the orange arrow to drill down into the items to review its history.

Items with outdated costs or Items without a cost displayed can be manually updated by entering the

new cost directly in the price list Unit Price column and then clicking on the Update button.


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Enhance Standard Cost: Crystal Reports

Run Enhanced Crystal reports to review item history and costing information to assist in determining

prices for update in the zStandard price list.

To Run the Reports: Choose the desired report from the Report Menu, Where required enter

selection criteria and then click Preview. The report can then be viewed, printed, or sent to Excel.

Note: Be sure to use the proper date format MM/DD/YYYY

How to Access: Main Menu > Inventory > Inventory Transactions > Enhanced Standard Costs

Standard Costing – Purchase Price Variance report – will display purchasing transactions that

occurred with a cost variance from the item’s standard cost for a specific date or date range

Field Information:

• Starting Item: Entering beginning item to display or blank for all

• Ending Item: Entering ending item to display or blank for all

• Starting Date: Enter starting date

• Ending Date: Enter ending date


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Standard Costing – Comparison Report – will display the current Item Master Standard Cost for an

item as compared to the new zStandard Price List cost and show the difference between the two (2)

costs

Field Information:

• Starting Item: Entering beginning item to display or blank for all

• Ending Item: Entering ending item to display or blank for all

• Starting Date: Enter starting date

• Ending Date: Enter ending date


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Once you have completed your review and update of the zStandard price list, you are ready to

update the BOM prices.


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Enhance Standard Cost: Update BOM Prices

The standard SAP Business One process Update Parent Item Prices Globally is run to update the

zStandard default price list used in the BOM’s with the updated prices from the previous processes

and reviews.

How to Access: Main Menu > Production > Update Parent Item Prices Globally -OR-

Main Menu > Inventory > Price Lists > Special Prices > Update Parent Item Prices Globally

Field Information:

Price List: Enter default BOM price list in both From and To fields

Code: Enter From and To Item Code or leave blank for All

Selection Criteria: Select Parent Items or Component Items

Note: Select Component Items first, then re-run with Parent Items

Item Group: Select a specific Item Group or All

Properties: Ignore this field

Click OK to run the Update Parent Item Prices process.

The following screen will be displayed after the process is run if there are prices to be updated.


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Click the Expand button to view the Child Components information.

Field Information:

: Indicates “Make” item with BOM below, click on the icon to expand

Parent Items: Code: Item Code of item

Name: Description of item

Qty: Quantity per unit

Component Items:

Code: Item Code of item

Name: Description of item

Qty in BOM: Quantity per unit on BOM

Current Price: Price currently shown in the BOM

New Price: New Price proposed as a result of Update Parent Item Prices Globally process

Note: New Price based upon Last Purchase Price

Difference: Calculation of New Price minus Current Price equals Difference

Parent Items: Current Price: Price currently shown for parent item

Suggested Price: New Price suggested as a result of Update Parent Item Prices Globally process

Price List: Price list upon which the roll-up process and Suggested Price is based upon

Note: This should be the default price list for BOM’s

Update: Click in this checkbox to accept the Suggested Price and update the BOM’s

Remove: Click in this box to not accept the Suggested Price and not to update the BOM’s

Review the system recommendations for Suggested Price and click on the Update button to accept

the recommendations and update the costs in the BOM’s.


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The system will display a message box when the process has completed successfully.

Click OK, and then click the blue return arrow to return to the Update Parent Item Prices

selection criteria screen.

Repeat this process by clicking the OK button and running the process until there are no results

returned.

When the system no longer has results to return, it will beep, display the system message below and

close the Update Parent Item Prices Globally window. .

Each time the process is run, the system is rolling up costs of another level of items in the BOM’s.

Note: This process will need to be run more than once depending the levels of the

BOM’s in the system


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Enhance Standard Cost: Inventory Revaluation You must perform an Inventory Revaluation transaction to update the cost of your inventory on

hand to match the new prices assigned to the zStandard price list.

Note: This is a critical step to ensure proper financial reporting and accurate costing of your

inventory item transactions going forward.

Note: If you Manage Item Costs by Warehouse, (setting on Company Details > Basic

Initialization screen) this function will perform two (2) functions.

1. It will revalue your on hand inventory to the new zStandard price list cost

2. It will reset your individual warehouse pricing for all warehouses to the new zStandard

price list cost

The Enhance Standard Cost Revaluation function will manage this process for you.

How to Access: Main Menu > Inventory > Inventory Transactions > Enhanced Standard Costs >

Enhance Standard Cost Revaluation

Field Information:

Item Group: Select and Item Group, recommendation All

Starting Item: Enter starting item, recommendation is blank for all

Ending Item: Enter ending item, recommendation is blank for all

Price List: Your BOM default price list, recommendation zStandard

Click Create to start the process.


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Click Yes to continue the process.

The following system message will be displayed when the process is complete.

To view the corresponding Inventory Revolution transaction created,

Go To: Main Menu > Inventory > Inventory Transactions > Inventory Revaluation

Field Information:

Item No.: Item master item no.

Item Description: Item master description of item

Whse: Warehouse for which revaluation being performed

Current Cost: Standard Cost prior to price list updates

New Cost: New cost as updated in zStandard price list

UOM: Unit of measure for item in Item Master > Inventory Data tab

In Stock: Item inventory on hand in specific warehouse


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G/L Increase Account: General ledger account that will be debited if inventory value is being

increased, i.e. new Standard Cost is higher than previous Standard Cost

G/L Decrease Account: General ledger account that will be credited if inventory value is being

decreased, i.e. new Standard Cost is lower than previous Standard Cost

If desired, you can add a Remark to this transaction by clicking in the Remarks field and entering

reference information and clicking Update to store.

To view the corresponding General Ledger transactions created as a result of the Inventory

Revaluation, click on the yellow arrow beside Journal Remark.

The Journal Entry will be displayed for your review.

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