Maintain Purchase Definition – A summary of the activity

Financial transactions form the basis of cost analysis and hence the need to capture cost centers at the time of financial postings becomes inevitable. Purchase, Sales and Inventory transactions will derive and default cost centers by a mechanism addressed in this business component.

This activity allows you to determine a cost center to which the purchase transactions will be posted. You can derive these cost centers based on specific parameters. Through this activity, purchase transactions derive the cost centers for the Purchase account (this can either be an expense account or a WIP account) and TCD account. Cost center can be defined for purchase account and TCD account using the mandatory parameters or for a set of mandatory parameters.

Some illustrations are:

Illustration 1

The following example illustrates a purchase cost center definition with mandatory and additional parameters

Definition I, illustrates the definition for the mandatory parameters: for company: “TestComp”, its finance book: “TestFB”, the event: “Normal” and the account: 900005 (which should be either an expense or a WIP account) a cost center rule has been defined with cost center CC1 and effective from 01-Jan-2002.  Any transactions posted to the account 900005 for TestComp, TestFB and Normal from 01 Jan 02 will update the cost center CC1.

Definition II, illustrates the definition for additional parameters: for company “TestComp”, its Finance book “TestFB”, Event ‘Normal” and Account 900005, a cost center rule can be defined by selecting additional parameters as Yes. For definition II, cost center and effective from date are specified along with the additional parameters as shown in the illustration below:

Illustration 2

The following example illustrates a purchase cost center definition with additional parameters.

Company – TestComp, Finance book – TestFB, Event – Normal, Account – 900005

For Company “TestComp”, Finance book “TestFB”, Event “Normal” and Account 900005, the table shows an illustrative list of additional parameters such as Folder, Receipt At, Item Group, Item Code and Item Variant.  For each definition, a cost center has been specified with an effective from date.

In Definition I, additional parameters: GR folder “FLD1”, receipt at OU “OU1” and for all item groups defined for purchase costing, for all item codes and the corresponding variants mapped to these item groups, have been mapped to cost center CC1. This definition is valid from 01-Jul-02.

In Definition II, the additional parameters GR folder “FLD1”, the receipt at OU “OU1” a specific item group IG1, item code I001 and the variant IV001 have been mapped to cost center CC2. This definition is also valid from 01-Jul-02.

In Definition III, the additional parameters: GR folder “FLD2”, Receipt At OU “OU2”, item group IG1, item code I001 and the item variant IV001 have been mapped to another cost center CC3 and effective from 01-Jul-02

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