SAP Global Trade Management (GTM) – Trading Expenses
This is my 4th post in a series of Global Trade Management (GTM) overview.
2 more to go.
Once we have done the overview, I will post more attractive articles for you, so give me your attention and patience.
Okay, when you hear the word ‘Trading Exepense’, what do you image?
Custom duty?, insurance?, Vessel cost? maybe.
They all correct, but precisely saying, there are much more different types of expenses acutually.
We, SAP, have been working with top 5 Japanese trading companies and did some research on this for years and discover many things.
For example, there is an expense you need to pay for customer and an expense you charge supplier/vendor. And process flow is not order – goods movement – settlement like order to cash/procure to pay.
The bottom line is that we could not use the expense processes using standard SD/MM for trading business.
That is why we developed Trading Expenses separately and it is independent of SAP SD/MM.
With GTM Trading Expenses, you can enter any expenses, fixed amount, percentage, quantity based, anytime from contract to logistics execution and even after execution, you can still enter/settle expenses and assign it to any documents/transactions.
Well then let’s start the process.
1. Trading Expenses at Trading Contract (T/C)
When you create a Trading Contract (T/C), you can enter planned expenses.
A good question, actually people (trader) working in trading business are care profit and loss, you may say everyone, but I mean trader are more sensitive than others.
When trader initiate a business, they enter not only the ordered item’s price but also planned expenses as much as possible for analyzing profit/loss simulation (it should be profit, but in reality there is a loss).
From their years experience they know what kind of expenses they will have and how much will be, so that they could not rough estimated profit/loss BEFORE they start a business.
This is really important for them.
Here is a screen shot of entering planned expenses in T/C.
Trader may know the 3PL or business partner for expenses, in that case they enter it.
These expenses information does not affect anything in terms of pricing, they are statistics data at this moment. Again the purpose of this data is for simulation profit/loss.
2. Profit Simulation in T/C
Well then, next step.
Once trader enter these expenses, they press the ‘Profit Simulation’ button and check the result.
The above screen is the result.
You may think this is nothing coll, but can you imagine what if each line item has different currency and different exchange rate and you have 50 items, it’s a huge work to figure out this result using calculater.
3. Expense Settlement in TEW
Okay, after T/C is created and the following S/O and P/O get created, you need to process logistics execution, i.e. Goods Receipt in this case.
When you receive goods, you also get an invoice from 3PL or wholesale distributor and need to pay.
How do you do? Create another P/O for payment? Kick a LIV separately?
a debit/credit memo?
Whatever you choose a SAP document/transaction to process this payment, a drawback is that you loose the link between this G/R and that document.
Do you understand?
If you do that, you will be more screwed up to figure out the final number you can make from this business.
With GTM, you can settle expenses while a logistics document being processed. Really?
Okay, let’s go to Goods Receipt (MIGO ).
When you activate GTM, hidden GTM tab at key logistics documents are activated above.
This is your playground, and you can see the ‘Expenses’ button.
After pressing button, you will see this screen.
The above ALV has some entries which are entered in T/C.
Here you have a choise either copy one or some entries from the above ALV to the bottom ALV area or type in completely new expenses manually.
Of course you can change, business partner, amount, percentage etc.
After entering this data, press ‘Back’ button to go back MIGO screen and save it.
Once MIGO is saved, you will be back TEW screen below and see all documents in document flow area.
Cool, isn’t it?