Actual Cost of Sales for purchased goods

Finding out Actual Cost for Sales Order

In this post I will show how to find out actual cost for materials sold to customer. It will be for process where we purchase the goods that we sell and these goods are valuated with moving average price.

The business flow will be the following:

  1. Sales order creation for externally purchased material.
  2. Creating Purchase Order towards vendor
  3. Goods receipt for the Purchase Order
  4. Invoice Receipt for the Purchase order
  5. Posting Delivery Cost towards Customer Sales order
  6. Delivery creation towards Customer
  7. Invoice towards Customer
  8. Checking the actual Cost of Sales for the sales order created

Creating the sales order

I have created a customer sales order with material R1000. This material we will have to purchase from a vendor in order to sell it as we hold no stock at the moment.

The material:

The material is set up with Moving Average price which is 75 at the moment.

In the sales order we have list price of 120 per 1 PC and Cost of 75 (the moving average from the material master). Therefore that leaves us with Profit Margin 37,5% at the moment. At this point we don’t know the actual cost or the actual margin for this sales order, this is just the planned margin.

Purchase order towards the vendor

I have now run the MRP and released the purchase proposal and can create the order towards the

vendor.

In the purchase order I put price of 82 per 1 PC and send it off to the vendor.

Goods & Invoice receipt for the Purchase Order

Now that we have the order created we can receive it, post the goods into the warehouse and also post the invoice from the vendor.

This is straight forward:

Goods receipt:

Invoice receipt:

And here we can see the responding journal entries for those postings:

Now that the goods are in the warehouse and invoice is received we will enter one more vendor invoice for transportation costs.

Invoice for transportation costs

To be able to post transportation invoice for Sales Order can use the Post Invoice Without Purchase Order reference and assign the cost to a sales order using the cost distribution option:

Here we assigned G/L account and Sales order/item. Note that this same option allows us to assign the cost to project, service order, cost center etc.

Now that’s done we can go ahead and create delivery and invoice the customer.

Delivery & invoicing the customer

Nothing interesting in the delivery & goods issue.

Invoicing is pretty straightforward also. Notice we get the same pricing/cost elements as we had in the sales order.

Now that we have issued the goods to the customer and also invoiced them we can find out the real costs and contribution margins for this sales order.

Actual costs on the sales order

To find out the actual costs and contribution margin for this sales order we can use the work center Cost and Revenue.

We will find out Sales Order here and we can use reports to find out details about the order:

Lets select report named Profit Detail by Contribution Margin Scheme for Sales Order Item:

And here we are. This is the Invoiced Profit which we’ve seen before. Total Cost of Sales were 375.

This here is the earned profit. This will take into account the actual payment to vendor and also the extra 50 we posted against the sales order for the transportation. This gives us total cost of 460. This comes from 82 per 5 pc-s and 50 for the transportation: 82 x 5+50 = 460.

Of course as with all reports we can add more details, for example we can add Journal Entries to see exactly where each amount is coming from.

This is it, hope you have enjoyed the reading.

If you want to read about produced(standard cost control) items when you can read it from here – https://allbyd.com/actual-costs-sap-business-bydesign-price-control-standard/

Free training on SAP BYD financials

There is currently ongoing free online training by SAP @ https://open.sap.com/courses/byd3/items/1AmQcfJ1RHVJptxP1fK6Pj

This course is on SAP BYD accounting and it has very good content. More then 4000 thousand people have subscribed and you will get a free access to SAP BYD system from the course.

Course Content
Week 1: Introduction to SAP Business ByDesign
Week 2: Goods and Services Value Chain
Week 3: Monetary Value Chain (Part 1)
Week 4: Monetary Value Chain (Part 2)
Week 5: Period-End Closing
Week 6: Final Exam

Duration: 5 weeks (3-4 hours per week)

So go ahead and get started in ByDesign by joining that course.

Why BYD is best fit for growing startup as their ERP solution?

business bydesign startup

At some point (the sooner, the better) you will realise that your startup could benefit from a good ERP system. ERP will help your startup become organized, keep records of the books, manufacture your products and track the costs, drive your projects and sales.

  • You will need something that will scale as your company grows
  • You will need something that is flexible with licensing
  • You will need something that has all the basics as accounting, CRM, projects but also much more as you grow
  • You will need something that is easily accessable via API’s from outside systems
  • You will need something that just works since maintaining ERP is not your company’s business
  • You will need all the data and analytics you can get

SAP BYD is a good fit because:

  • Its kind of a start up itself. It is being actively developed even as you read this, SAP BYD will receive new feature updates every four months.
  • SAP BYD has installations from 7 users to 1000+ users.
  • You can buy starter package for licenses and add more as your user base is growing.
  • SAP BYD has lots of features, starting from CRM to accounting and manufacturing. It has 35 end-to-end processes. Read more from here: https://allbyd.com/what-is-sap-byd-all-about/
  • SAP BYD has has more then 200+ API’s and web services available out of box. You can find the link to full list from here https://allbyd.com/11-things-great-sap-business-bydesign/
  • Its hosted in Germany by SAP and is guaranteed with 99% SLA. Also it has free 24x7x365 support for the subscribers.
  • BYD has built in analytic tools to get insights for business. Its in real time powered by HANA technology.
  • Its used by startups such as Skullcandy:

11 things that are great about SAP Business ByDesign

Built in analytics

SAP BYD comes with built in business analytics powered by Hana. Usually with ERP products you need to buy separate product for analytics.

 

Built with using SAP ECC experience

This on is kind of hard to explain but after a while you start to feel that same people have built it who has built ECC. This means that there are many similarities but they have also taken the experience and made BYD better and more convenient.

 

Workflows

BYD comes with good built in workflow automation. You can assign tasks to other people and configure the system so everyone receives work assigments automatically. If you create a service order the service worker will get notification on their screen and know what to do.

 

Sourcing process

Sourcing process is by far the best I have seen in BYD. You want to buy something, you ask suppliers for quotes, compare the quotes, ask for new quotes, accept the quote etc. Everything works well and is easy to use.

 

API’s and web services

There are 231 Web services available in version 1611. This means that almost everything in BYD is accessable from outside BYD and you can also send back data or call out BYD functions.

 

Integration scenarios

There are 70 integration scenarios available in version 1611. They include scenarios for integration SAP BYD with third party applications, on-premise applications etc. For example you can integrate SAP BYD out-of-box with payroll system, e-commerce solutions, point-of-sale applications, engineering applications etc. Read more here.

 

Excel integration

All the reports and analytics in SAP BYD can be opened in Excel as well with SAP BYD free excell plugin. You can query the data straight from BYD system very easily.

 

Updates 4 times a year

SAP BYD receives technology and feature updates every quarter.

 

Idea forum

SAP BYD has idea forum for all the users where they can post their wishes and then the community can up-vote the idea and if it has enough supporters, SAP will consider developing the idea.

 

Document flow

One things thats adopted from ECC is the document flow. This is something that is extremely useful. You will see from you quotation till your G/L postings in accounting and everything in between what has happened with you documents. No need to query and search for order related information from different views.

 

Its a complete solution

SAP BYD basically is: ECC, BW, CRM, SRM, SCM. You will get all the business applications you will need with only one software.

Read more about SAP BYD from here: https://allbyd.com/what-is-sap-byd-all-about/

SAP Business ByDesign vs MS Dynamics 365

Not going into too many details but here is quick overview between SAP BYD and Dynamics 365.

You can get free trial for Dynamics 365 with limited functionality. You can use CRM and Project modules. So that’s what I did and here are pictures from both of the systems.

Open screen of Dynamics 365:

dynamics_365_first_view
dynamics_365_first_view

Open screen of SAP BYD:

Both open views are highly customizable, users can add or remove components per their like.

Account (customer, vendor) creation and account master data.

Dynamics 365:

Dynamics 365 account
Dynamics 365 account

SAP BYD account view:

byd_account_view
byd_account_view

In SAP BYD under account view you will get overview of business related to that customer. You can check invoices, orders, open items etc. in Dynamics 365 that functionality was lacking.

 

Creating sales order in Dynamics 365:

dynamics_365_create_sales_order
dynamics_365_create_sales_order

Creating sales order in SAP BYD:

byd_create_sales_order
byd_create_sales_order

 

Create purchase order in Dynamics 365:

dynamics_365_create_purchase_order_add_product
dynamics_365_create_purchase_order_add_product

Create purchase order in SAP BYD:

byd_create_po
byd_create_po

Since Dynamics 365 offers limited trial and I didn’t plan on making in-depth review of the product this is it. Its just a very broad overview to give some basic idea what these two competing products are.

Some things that I did notice is that functionalities as for example check document, document flow related to particular document and other things which are familiar from both SAP ECC and SAP BYD were missing in Dynamics 365.

Be sure to read also https://allbyd.com/what-is-sap-byd-all-about/

ERP Situation in the market

Found this interesting report by http://panorama-consulting.com/resource-center/2016-erp-report/

They have made quite comprehensive study on the ERP situation in the market in 2016.

Here’s some key takeaways.

Average cost per ERP project has gone down in the recent years but on the same time duration has gone up. This can mean that the license costs have come down but for some reason the duration of the implementation project is longer. On the other hand the duration overrun has gone down which means that organizations are better at planning the project.

erp situation

Reasons for implementing ERP system:

Main reasons is to replace old legacy systems.

ERP vendors:

SAP is still leading the race while Oracle is stepping on its heels.

Main reasons for selecting ERP software:

46% Functional fit
25% Great value
13% Common for particular industry

The most interesting part – type of the ERP software implemented

On-Premise solutions are still most popular but Cloud and SAAS has the other half of the pie.

The significant increase in the use of cloud ERP, from
11- to 27-percent, makes sense considering the increasing number of
vendors providing this option. Both SAP and Oracle are investing more research and development in cloud technology than in on-premise software, and other vendors are quickly following.

Cloud business is increasing rapidly and will eat up the on-premise market.

Cloud Usage
A commonly cited benefit of cloud ERP is reduced implementation costs. This year’s respondents reported significant cost savings when implementing cloud ERP software. In fact, more than half (56 percent) of respondents deploying cloud technology reported implementation cost savings of at least 20-percent. Compared to SaaS, cloud is generally a less expensive option over time.

Here you can see that 27% reported 21-40% savings, 11% reported 41-60% savings and 13% reported 61-80% savings compared Cloud ERP to on premise solution.

Report contains many other interesting findings and is definitely worth the read.

But you can start also from here:
http://allbyd.com/what-is-sap-byd-all-about/
http://allbyd.com/sap-business-bydesign-cost/
http://allbyd.com/sap-byd-blogs-resources-information-tutorials/

 

 

 

Sap ByDesign job market in 2017

One very exciting topic for all the consultants out there. What is the Sap ByDesign jobs situation in the market right now?

Short answer  – its not hot at the moment but it will be in the next year and many to come.

Why is it not very hot at the moment?

SAP BYD has been hidden away for years, there has been no marketing what so ever. Nobody knew about the product. But this will all change in the upcoming years. You can read about SAP plans for BYD in 2017 here http://allbyd.com/what-is-sap-byd-all-about/

When SAP starts pushing BYD and putting money into marketing it will create new SAP BYD consultant jobs in the future.

Situation at the moment with Sap ByDesign jobs

Monster.com

 

byd jobs monster.com
byd jobs monster.com

In Monster.com there are 22 Sap ByDesign jobs available.

Linkedin

 

byd_jobs_linkedin
byd_jobs_linkedin

Linkedin has 145 Sap ByDesign jobs available, and it looks like many jobs are from SAP itself. Biggest location – Germany.

Monster.co.uk

 

byd_jobs_monster_uk
byd_jobs_monster_uk

4 Sap ByDesign jobs available in the United Kingdom.

This means that the job market is definitely here. There are not as many job opportunities as with ECC but also there are not as many people with BYD skills around. Getting good BYD skills early on will increase your value in the market and gives you advantage.

UPDATE 20.02.2017

New screenshot from indeed.com – fresh SAP BYD jobs posted few days ago. Check out yourself.

SAP BYD jobs indeed.com
SAP BYD jobs indeed.com

How to get started with BYD and get some experience to be ready early for the upcoming years  when  there will be much much more job offers?

First, start by reading the following blog posts:

http://allbyd.com/sap-byd-blogs-resources-information/http://allbyd.com/what-is-sap-byd-all-about/
http://allbyd.com/dictionary-for-people-coming-from-ecc-world/

If you want to get a head start then leave us your email and we will send you all information we have at the moment.

  • Links to SAPs free certifications about BYD
  • Information how to get access to free demo tenant
  • Links to SAPs free trainings about BYD
  • Other training materials not available on the internet

SAP Business ByDesign Cost

There are different types of users in SAP BYD and they have different prices.

Enterprise users
Team users
Self-Service users

Most expensive users are Enterprise users and they have the most access aswell.

Team users are focused on one specific business are, i.e project management, production etc.

Self-Service users are limited users. They can be used for example ordering office goods for themselves, reporting time and so on.

There is requirement of minimum 20 licenses and out of these 20 five must be enterprise users. Other can be either team users, enterprise users or combination of the latter two. Self-Service users can be bought as addition to these users.

Pricing depends on the partner but here are some common prices:

User typePrice range $
Self-Service User15-25
Team User89
Enterprise User150-200

If we take into account the minimum five enterprise users and add 15 Team users, we will get sum of 5×150 + 15×89 = 2085 USD PER MONTH.

This will of course depend on your implementation partner and the offer made to you but around 2k per month is something that will give an idea how much BYD will cost.

More detailed description about users and pricing can be found here

Read also http://allbyd.com/what-is-sap-byd-all-about/