SAP ACM Basics:

Collated from content from SAP website:

The trading of agricultural commodities, such as wheat, corn, soybeans, and coffee,
is a niche business that has highly specific requirements. Commodity traders can
have relationships with many counterparties and maintain several contracts with
each one. The terms and pricing data in an agricultural commodity contract can be
highly complex and include pricing adjustments based on quality factors.

In addition, the contract execution can involve both planned and unplanned
deliveries, which must be recorded and assigned to one or more contracts. Finally,
the contract settlement process must handle prepayments, reassignments, quality-
based pricing, tolerances, and optionalities.

SAP Agricultural Contract Management enables commodity traders to capture and

manage these complex commodity contracts. It is an end-to-end solution that
supports the full contract life-cycle, including the capture of the contract terms,
the logistical processing, and the final settlement and closure.

INTEGRATION-

SAP Global Trade Management and SAP Trader's and Scheduler'sWorkbench must be
active. SAP Agricultural Contract Management is also fully integrated with SAP
Financial Accounting and SAP Commodity Management.

Optionally, SAP Agricultural Contract Management can be integrated with a third

party trading system via an SAP NetWeaver Process Integration (SAP PI) system. In
this implementation scenario, contract data is captured through the third party
trading system (3PT) and then flows into SAP Agricultural Contract Management.

Few Terminologies-

Call-Off
During the execution of a contract, you can call-off a quantity of the contract by
raising a purchase order or a sales order to link a delivery to a specific
contract.

Link PO qty or SO qty to a Contract qty is called call off.

Load Data Capture

You can use the system to capture the details of the loads, including weights,
volumes, and quality characteristics. The system then uses these details during the
contract application and contract settlement processes.

Contract Application
You can use the contract application features to validate a delivered load and
assign it to the appropriate commodity contract.

Contract Settlement
During the execution of a contract, you can financially settle various quantities
with the contract counterparty, for example, moved quantities, washout quantities,
and canceled quantities.

Inventory True-Up
You can use the system to calculate the value of the firm's inventory.
The inventory trueup process takes account of both contract related inventory
changes and non-contract related inventory changes such as shrinkage.

Mark-to-Market Reporting

You can now use mark-to-market reporting to analyze data about your open logistical
documents and stock.

Profit and Loss Reporting

You can now use profit and loss reporting for beginning positions and new
activities to deduce overall profit and loss attribution on mark-to-market
calculations.

Non-standard Settlements Overview Report

This report gives you an overview of the non-standard settlements (for cancellation
and underfill scenarios) that have been made for a particular company code.

Pricing redistribution for a canceled quantity

The Versioned Logistics Pricing tables(CM_VLOGP) and (CM_VLOGP_KONVD) are

automatically updated with a pricing redistribution before the settlement for a
canceled quantity is released.

MASTER DATA:

The following master data is maintained in Customizing for Logistics - General

under Global Trade Management > Agricultural Contract Management > Basic Settings:

1. Contract Types (for example, third party purchase, third party sale,
intercompany purchase, and so on)

2. Quantity Types (for example, consumed quantity, cancelled quantity, overfill

quantity, and so on)

3. Text Assignments

4. Modes of Transport and Means of Transport

5. Related Trade Types

6. Title Transfer Settings

7. Process Parallelization Settings

8. Currency Mappings

9. Cancellation Codes

10. Optionality Categories

11. Crop Seasons

The following master data is maintained in Customizing for Logistics - General

under Global Trade Management > Agricultural Contract Management > Setup for Master
Data-

12. Pricing Aspect Types and Conditions

13. Tolerance Types

14. Discount Premium Quality Schedule (DPQS) Configuration Data (for example,
calculation rules, derived rules, rounding parameters, and so on)

DPQS -

A discount premium quality schedule (DPQS) specifies the quality characteristics to

be measured for a commodity, the acceptable values for those characteristics, and
any discounts or premiums to be applied.

DPQS also specifies volume adjustments to be applied based on quality

characteristics such as moisture content and foreign material content.

The results of the evaluation are used in the contract application process (to
match loads to pricing trading contracts) and in the contract settlement process
(to apply prices to the relevant discounts or premiums).

A DPQS consists of a volume schedule and a value schedule. First, you define a
volume schedule. Then, you define a value schedule. And then assign the relevant
volume schedule to the value schedule.

Volume schedule

Volume schedules are used to determine whether a quantity should be adjusted based
on the value of a characteristic.

For example, if the value for quality characteristic, moisture, is between 0 and
10%, the load quantity may need to be reduced by 1% for each 1% volume of moisture
to determine the actual quantity to apply against the contract.

Value schedule

Value schedules are used to determine the acceptable value ranges for the quality
characteristics for a commodity, along with any relevant premiums and discounts.

Material Schedule

A material schedule is a list of the materials that are acceptable for evaluation
during contract application.

The system uses the material schedule to limit the number of possible matching
contracts, prior to comparing the actual load values with those required by the
DPQS data in the contract.

When a value schedule is saved, the system generates the material schedule based on
the material classifications defined for the entered material.

For example, a class of materials, CORN, may be defined with a broad range of
values for characteristics such as moisture, foreign material content, and broken
kernels. Materials such as Yellow Corn 1, Yellow Corn 2, and Yellow Corn 3 may be
defined as members of this class with smaller, possibly overlapping ranges for the
characteristics. Depending on the ranges defined in the value schedule, one or more
of these materials may be included on the corresponding material schedule.
When you create a volume schedule or a value schedule, the system defaults its
status to draft. When you have finalized the schedule, you change its status to
released, and it becomes available for use in the system. If a schedule is no
longer valid, you can change its status to retired.

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Can we add more characteristics on the contract after selecting an existing DPQS?
No. But we can select the Override check box after entering the DPQS details.

Override Base Schedule check box function -

The details of the selected value schedule are displayed on the DPQS tab page. By
default, this information is display only. However, if you select the Override
checkbox, you can choose to delete characteristics or change the value ranges for
characteristics. However, you cannot add new characteristics.
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The following example shows how the Duval calculation rule is applied to calculate
the net weight of a commodity.

The calculation formula is as follows:Gross Weight x (Input % - Standard %) / (100

% - Commercial Default %)

Gross Weight: 10,000 Pounds

Moisture: 20%

It is dried (shrink) down to 14% due to the moisture or the commercial standard of
14% is applicable in this case.

The net weight can be calculated using the Duval calculation rule as follows:

Shrink due to Moisture:= 10,000 x (0.20 - 0.14) / (1.00 - 0.14)

= (10,000 x 0.06) / 0.86
= 600 / 0.86
= 697.67 Pounds

Net Weight:= 10,000 - 697.67= 9,302.3 Pounds

The Class type for Material Determination maintained under DPQS in configuration
were,

CMD - For volume/ value schedule

RCC - Rank
RCC - Reference commodity code

We can simulate Value schedule and Volume schedule.

TOLERANCE SCHEDULE -

A tolerance schedule defines the quantity above and quantity below the contracted
quantity or delivery quantity that may be applied towards the fulfillment of the
contract.

It enables the counterparties to define the acceptable overfill and underfill

delivery quantities, and the relevant price adjustments.
1. Tolerance is Higher/Lower of Percentage or Value

If both a percentage range and an absolute value are entered, this field states
whether the higher or the lower of the two values should be applied.
Note that if this value is used, only one overfill line and one underfill line can
be entered for the schedule.

2. Price Application (Flat/Tiered)

A price can be applied to an underfill/overfill quantity in the following ways:

Flat Pricing: a flat price is applied to the entire overfill/underfill quantity

Tiered Pricing: a different price is applied depending on the amount of

overfill/underfill

3. Replacement Price type:

From where the price of overfill or underfill would be taken is mentioned here.
The overfill/underfill quantity can be settled at the contract price or a manual
price (also called as negotiated price). We need to mention if we would use
contract price or manual price.

4. Consumpation rule (Weighted Average Price/Last Pricing Lot Consumed/Manual)

This field applied to overfills.

The price for an overfill quantity can be based on either a weighted average of the
prices in the pricing lots consumed by the delivery, or the price of the last
consumed pricing lot.

Note -
A tolerance schedule usually contains at least one line for underfills and one line
for overfills. However, you can enter multiple lines for underfills and multiple
lines for overfills, if required.

Tolerance schedule and DPQS schedule can have one of the below statuses:
Draft
Released
Retired

VALUATION POINT:

Valuation point is used to automatically determine the pricing approach for

individual line items in a commodity contract.

Before you can use them, you must set them up in master data. The valuation point
is an optional field.

We maintained DPQS, Tolerance schedule, Valuation point in the SAP Easy Access.

Pricing approach-
Price of a commodity consist of combination of pricing components like Future and
Basis, Future, Basis and Ratio etc. This combination of pricing components is
called Pricing approach.

The pricing approach can encompass various combinations of futures components,

basis components, indexes, and ratios.You can also simply use a flat pricing
approach.

COMMODITY CONTRACT -

Commodity Contract definition -

A commodity contract is a document that represents an agreement between a buyer and
a seller of a commodity. It contains all of the terms and conditions that have been
agreed between the buyer and the seller.

The system supports the following contract types:

Third Party Purchase
Third Party Sale
Intracompany
Intercompany
Spot Purchase
Commingled Stock
Washout (and the Circle variation)

DPQS
You only need to assign a value schedule to a commodity contract, as each value
schedule already has an associated volume schedule and material schedule.

You assign a DPQS to a commodity contract on the DPQS tab page for the commodity
item.
The system also provides the following options:

Timing
The Timing option determines when, during the execution of the contract, the system
applies the DPQS (for example, at contract, at load, or at discharge).

Schedule at Unload Location check box

If you select the Schdl at Unload Loc (Schedule at Unload Location) checkbox, the
system uses the default DPQS for the discharge location, and you do not need to
enter a Schedule Name. For example, this option may be used in cases where the
contract has more than one discharge location. The system determines the relevant
schedule for the discharge location by using the TSW location assigned to the value
schedule.

Override Base Schedule

The details of the selected value schedule are displayed on the DPQS tab page. By
default, this information is display only. However, if you select the Override
checkbox, you can choose to delete characteristics or change the value ranges for
characteristics. However, you cannot add new characteristics.

TOLERANCE SCHEDULE:

When you create a commodity contract you assign a tolerance schedule to it. You
must also specify when, during the execution of the contract, that tolerance
schedule should be applied.

The system uses the Tolerance Type to determine how and when to apply the tolerance
schedule rules to the contract.

The Tolerance types are -

1. Per Delivery
Indicates that the tolerance schedule rules apply to the quantity delivered in each
load. If you select this tolerance type, you must also enter the expected quantity
for each load, so that the actual load quantity can be evaluated against the
expected load quantity.

2. Per Delivery Period

Indicates that the tolerance schedule rules apply to the total quantity delivered
within a given delivery period.

3. Per Contract
Indicates that the tolerance schedule rules apply to all the contract line items
for a given commodity.

OPTIONALITY

You can maintain additional logistics options along with the discounts or premiums
to be applied for those options. For example, you can specify a premium for a
particular discharge location or a particular mode of transport. These additional
logistics options are called optionalities.

Features:

Optionality Categories
The solution is delivered with a set of predefined optionality categories. For
example, these categories include Load Location, Discharge Location, Incoterms,
Mode of Transport, Means of Transport, Alternate Vendor, Alternate Customer,
Material, Delivery Period.

Optionality Type-
The Optionality Type determines how the system evaluates the optionalities during
call-off, load data capture, and contract application.

The following Optionality type are provided:

1. Explicit
Explicit optionalities require a quantity to be declared before contract
application is permitted for the quantity. This means that call-off must occur and
values must be entered for the optionality categories. The contract cannot be
applied to any load without a call-off.

2. Implicit
Call-off is not required for implicit optionalities. However, contract application
must match one of the defined optionalities for all categories where a value has
been captured for the load (if no value is captured for the load, the category is
ignored for matching purposes). Therefore, the contract can be applied to any load
for which the optionality values entered in load data capture match the optionality
values defined in the contract.

3. Any
If you define optionalities as Any, then the contract can be applied to any load
irrespective of the optionality values entered. However, for settlement, if a
category value matches the load, the system applies the relevant premium or
discount.

Contract Related Trades-

A commodity contract may be related to other contracts, for example, for pricing
purposes ( futures contracts), for intercompany or intracompany trades, or for
washouts. This function enables you to view the related trades for a contract and
also to add and delete related trades.
When you create an intercompany or an intracompany contract, the system
automatically creates a mirror contract (for a purchase contract, the system
creates the corresponding sales contract, and vice versa). The system displays the
details of the related mirror contract on the Related Trades tab page of the
intercompany or intracompany contract.
You can also manually add or remove a related trade.

When you save a new commodity contract, the system creates a pricing trading
contract document and the tables Versioned Logistics Pricing (CM_VLOGP) and
(CM_VLOGP_KONVD) are updated with trading contract data.This contract is the first
document that appears in the Document Flow.

For intercompany and intracompany contracts, the system automatically creates a

mirror contract. For example, when you save a new intercompany sales side contract,
the system also creates a corresponding intercompany purchase side contract.

Copying Commodity ContractsPrerequisites -

If you want to create a contract as a copy of a template, you have defined

templates as an available contract type in Customizing for Agricultural Contract
Management under Basic Settings > Maintain Contract Type Determination.

You have created a contract or template that you want to use as a source contract.

You have activated the Business Add-In implementation /ACCGO/CMN_IM_TC.

You can do this in Customizing for Agricultural Contract Management under
Enhancements Using Business Add-Ins > Contract Management >Commodity Contracts
>Contract Copy >Implementation: BAdI for Contract Copy.

Contract Approval-
There is a provision to set or reset the approval flag by using a Business Add-in
(BAdI) implementation.

Creating Pre-Payment Requests-

Context-
You use this procedure to enter pre-payment data for a contract and to make an
initial payment for the order.

Procedure

1.On the SAP Easy Access screen, choose Agricultural Contract Management > Contract
Settlement > Manage Pre-Payment Requests.

2.Enter the contract number.

3.Enter the required payment terms.

4.Press execute button.

The pre-payment data is defaulted for the contract.

5.Save your entries.

CONTRACT AMMENDMENTS-

TOLERANCE AND DPQS

Changes to tolerance schedules and discount premium quality schedules (DPQS) take
effect for new contract application and contract settlement processes.
Any completed applications and settlements remain unchanged. If you wish to change
the completed application and settlement documents, you must reverse the relevant
documents and then re-create them.

The following constraints apply to contract amendments -

SETTLEMENT CURRENCY
If an application document exists for the contract, then you cannot change the
settlement currency of the contract.

PRICE:
We can change the price untill final settlement because during final settlement,
the pricing aspect is locked.

OPTIONALITY, TOLERANCE TYPE

If a call-off exists for the contract, then you cannot change the tolerance types
(per delivery, per delivery period, per contract) or the optionality header and
details data. However, you can add new optionality values for existing categories.

The commodity line item quantity must always be equal to the contract item
quantity.

STORAGE AGREEMENTS:

Storage agreements are contracts between a company and a vendor outlining the terms
and conditions under which goods are stored. Storage Agreement defines:

Vendor: Agreements can be generic or specific. A generic agreement is public and

any vendor can use it. A specific agreement is restricted to a specific
counterparty and only that partner can use it.

Materials: Agreements define which materials are valid for the agreement. The
materials valid for the agreement are defined by the DPQS material schedule list.

Plant/Storage Locations: Agreements define which plants and storage locations can
use the agreement. Locations are represented as a single plant and storage location
or as a TSW location hierarchy, representing several plants and storage locations.

DPQS: Agreements are linked to a DPQS schedule that is used to calculate net
weights.

Rules: Agreements define the rules for charging a vendor for storage. The agreement
also defines the number of days for which storage is free of charge, and how many
days the rates for the agreement are locked (storage fees will not change for that
number of days). You can also define if the agreement uses net or gross weights
during settlement and if the storage start and end dates are used during
settlement.

Storage Fees: You can assign storage fees to a storage agreement and define the
pricing conditions used during storage settlement.

Storage Events: You can assign possible storage events to a storage agreement and
define how events are charged during a storage settlement.
CONTRACT CANCELLATION-

When you enter a cancellation, the system performs validation checks before saving
the cancellation. The system validates the available open quantity. The system also
checks the current call-offs and prepayments for the contract to ensure that the
specified cancellation quantity is available.

If you cancel a quantity of an intercompany or intracompany contract, the system

automatically creates the cancellation in the corresponding mirror contract.

The canceled quantity must be settled, although there is no related goods movement.
Canceled quantities may be settled at a different price to the established price
for the contract, and there may also be a cancellation fee.

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how does the flow of prepayment work?

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Process-

Choose the Cancellation tab page on contract in change mode.

In the Event Information screen area, enter the Cancellation Type, Cancellation
reason Code, and Cancellation Date.

In the Event Details screen area, enter the To be Cancelled Quantity, the
Cancellation Fee, and the pricing conditions.

Save your entries.

Before saving the cancellation, the system performs validation checks. For example,
the system checks the open quantity, call-offs, and prepayments for the contract.
If the cancellation is permitted, your changes are saved, otherwise an error
message is displayed.

ACM-CM INTEGRATION:

To enable the ACM-CM integration, activate the business function

/ACCGO/BF_ACMCM_INT (switch /ACCGO/SWITCH_ACM_CM).

CONTRACT PRICING ENGINE (CPE)

Commodity Pricing Engine (CPE) is a tool for calculating the prices of commodities.

CPE retrieves pricing formulas in business documents and evaluates them to

calculate final prices of commodities. The resulting price is then transferred to
the condition types that are used in commodity pricing.

Pricing is not required to be established to save a contract or to initiate

logistics against a contract.

The pricing components include the pricing conditions and the CPE terms. The system
can be configured to establish pricing in various combinations of futures and basis
prices.\
FEATURES-

ACM Pricing View

This feature offers a new view along with the standard CPE views, which helps you
to create price, set price, and visualize price in a single screen.

Pricing Statuses
NPE, NFE, NBE, FLAT

If either the basis or the futures price is not established, then the price is only
partially defined. If some portion of a price has not been established for a
component or a quantity, you can use provisional pricing.

De-pricing/ LIFT PRICE

When you de-price a commodity, you temporarily remove the pricing of CPE condition
quantity and later reprice that same component with different values. Such price
changes can occur at any point until final settlement because during final
settlement, the pricing aspect is locked. In the ACM Pricing View, de-pricing is
referred to as lifting the price.

MULTIPLE CURRENCY IN PRICING-

Pricing in ACM supports multiple currencies per trading scenario, including company
code currency, market currency from CPE, and contract currency.

You can carry out the following tasks during pricing-

Fix the FX rate.

This stabilizes the FX rate so that all parties to the contract can use their own
currencies without inconsistencies in pricing being caused by fluctuating FX rates.

Lift the FX rate or fix a new FX rate for the entire quantity of a contract line
item, or for partial quantities.

View a provisional FX rate. This FX rate is retrieved directly from the market by
CPE.

Note-
To ensure consistent pricing in ACM and Commodity Management, you must maintain a
mapping between CPE condition types and Pricing Aspect conditions.

You do this in Customizing for Agricultural Contract Management under ACM-CM

Integration >Map CPE Condition Types to Pricing Lot Condition Types

Example
You configure the following pricing condition types and map them to pricing lot
condition types in Customizing:

ZAW0 - Price Futures

ZAW1 - Price Basis
ZAWP - Basis Port Spread

The system retrieves the provisional price for a quantity based on the pricing
type, whether it is Not priced or Partially priced.

You can perform final settlement on a contract only when you have priced all the
components that are specified in the pricing approach. For example, if your pricing
approach is futures and basis, you cannot perform final settlement on a contract
until you have specified a futures price and a basis price for each contract line
item, and, if you are working with multiple currencies, an exchange rate.

Note
If you want to delete a price fixation in the ACM Pricing View, its Pricing status
must be NPE.

Pricing Status-

The system derives one of the following pricing statuses for each line item-

1. No price established (NPE)

Neither the futures component nor the basis component of the commodity price is
established.

2. No futures established (NFE)

Only the basis component is priced. The price of the futures component is not yet
established.

3. No basis established (NBE)

Only the futures component is priced. The price of the basis component is not yet
established.

4. Flat
All components are fully priced.

Provisional Pricing -

Provisional pricing is retrieved for the portion of the quantity that is not priced
in a price fixation in CPE.
Provisional pricing is retrieved directly from the market using the CPE.

Prerequisites
You have maintained commodity curves in CPE, in order to retrieve accurate
provisional prices.

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Commodity curve?
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With CPE, the system permits the usage of different DCS (Derivative Contract
Specification)-based commodity curves that leverage market prices in CPE.

Based on the pricing types in a contract, the system calculates the provisional
pricing differently as shown in the following expressions:

When the futures and basis prices are both determined,

Provisional price = (futures price + basis price) * load quantity

When you want to use location and material adjustment prices,

Provisional price = (futures price + basis price+ location adjustment price +

material adjustment price) * load quantity

If there is only one priced lot on the contract and its quantity is greater than
the load quantity, the system uses the contract price for settlement.

If there are multiple pricing lots, the system calculates the pricing for the load
based on the distribution rules established in BRFplus.

EXPOSURE-

Exposures are created whenever an application document is assigned or reassigned to

a contract.
By using Commodity Pricing Engine (CPE), exposure creation is automatically
triggered by SAP Global Trade Management (GTM) contract per GTM-CM integration
default.

Reconciliation of Exposures Report -

You can call up this report using the transaction /ACCGO/EXP_RECONCIL and
regenerate Application exposures and Correction Stock exposures manually.

The following modes are available for creating raw exposures-

Automatic Mode
Automatic Mode is also known as Real Time Mode. In this mode exposures are created
automatically during the various ACM scenarios by the system itself.

Manual Mode
Manual Mode is used only when exposures are not created in automatic or real time
mode.

For example, when the real time creation of raw exposure fails due to any reason
(for example, object lock, missing Customizing data and so on), the user can
correct the error and regenerate the raw exposure using the report Reconciliation
of Exposures.

You can call up this report using the transaction /ACCGO/EXP_RECONCIL

Note
No updates are made to the existing exposures; every time a contract is assigned,
the contract exposure is re-created to represent the new scenario generating a new
version of the same exposure.

You can create or check the various exposures in one of the following ways:

T-code FTREX_LG1,
which calls up Display Log for Logistics Integration, to see the details of the
newly created raw exposures once you create and save a contract, or

T-code FTREX1,
which calls up Raw Exposure Maintenance, to check the raw exposure document that
was created.
Enter the Raw Exposure ID in the Raw Exposures: Initial Screen.
In this transaction, you can see the raw exposure line items for each type of
pricing. You can also see the sub raw exposure items and whether they are or

Use transaction RSRT to check the raw exposure by entering a query in the Query
Monitor.

Exposures Lifecycle-
The exposure lifecycle specifies the sequence in which the raw exposures are
created. Following are the different types of exposures created during the
lifecycle:

1. Trading Contract Exposure

A contract exposure is created when a contract is created and posted.

Trading contract exposures are created by the standard GTM integration.

Note
No updates are made to existing exposures; every time a contract is assigned, the
contract exposure is re-created to represent the new scenario, generating a new
version of the same raw exposure.

2. Application Exposure

Application exposures are created whenever an application document is assigned or

reassigned to a contract.

It reflects the quantity you receive as the logistically adjusted quantity (LAQ).
The LAQ becomes the relevant risk quantity presented in the application exposure

Application document reversal makes the correct adjustments to all exposures,

reflecting the reversal of a specific process within the system. If an application
document is reversed, its application exposure quantities must be zero. You must
reverse the quantities to the contract, and adjust stock correction exposures to
offset the stock exposure fully.

After revenue recognition of a sales or purchase cargo, the application exposure

must change to a new invoicing status. This status change is needed because until
revenue recognition is done, application exposure quantities offset book inventory
quantities in the position report. After this status change, the position report no
longer considers the application exposure quantities, which are then reported as
book inventory.

3. Material Stock Exposure

Material Stock exposure is created whenever a goods movement (GR or GI) is posted
in the system.

In case a goods movement is cancelled material stock exposure is reverted

simultaneously.

4. Material Stock Adjustment Exposure

Whenever there is a discrepancy between LAQ and delivered quantity (GR or GI

quantity), besides material stock exposure creation, there is a stock adjustment
exposure which represents the residual quantity due to DPQS adjustments.

Example

A third party purchase scenario has the following data-

Goods Receipt quantity - 100 TO

LAQ quantity- 95 TO

Therefore, in terms of risk exposures, the following is expected-

Material Stock exposure - 100 TO

Application exposure - 95 TO
Correction stock/ Stock Adjustment exposure - 5 TO

When application documents are reversed, it triggers the application exposure

reversal fully offsetting the stock adjustment exposure.

By using CPE, exposure creation is automatically triggered by GTM contract per GTM-
CM integration default.

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RISK REPORTING-

The following risk reports are available for ACM.

Price Type Report
Premium Report
Slate Report

Risk reporting must fulfill the following tasks:

Provide a risk view on the financial (commodity price) risk associated with the
pricing of physical contracts or positions (for example, stock) and financial
contracts that are taken to offset these price risks.

Provide a position view on physical short and long positions from contracts and
stocks required for trading companies to run their trading business. Such a view is
also relevant for non-trading companies to match their purchase and stock positions
to their requirements regarding locations and quality.

The risk is described in terms of priced and unpriced and hedged and unhedged
quantities, by consolidating a view of physical trades and paper trades in a
certain time frame.

You can run a risk report to see the various exposures and their values created
during the lifecycle.

To run the risk report-

1. Go to transaction RSRT

2. Enter the Query and Query Display, and then choose Execute.

The following queries are available for ACM reporting-

Template for ACM-relevant Risk Reporting (Query = 2O0CFM_CTY_EXP//ACCGO/ACM_QUERY)

Price Type Report
ACM Premium Report
ACM Slate Report (Query = 2O0CFM_CTY_EXP//ACCGO/ACM_SLATE_REPORT_310)

3. On the next screen, enter the required details such as Commodity ID, and so on,
and then choose Execute to run the risk report.

You can hide, display, filter, or drill down the various columns and rows. You can
also filter each exposure individually.

The Template for ACM-relevant Risk Reporting (2O0CFM_CTY_EXP//ACCGO/ACM_QUERY) risk

report shows the following results:

1. Priced Contracts physicals: contract exposures that are fixed

2. Unpriced contracts: contract exposures that are floating
3. Application priced: application exposures that are fixed
4. Application unpriced: application exposures that are floating
5. Application invoiced (realized): application exposures that were already set as
Finally Invoiced, Purchase realization or Revenue recognition already occurred
6. Inventory: material stock exposure
7. Correction stock exposure quantity: correction stock exposure for material,
plant, or storage location
8. Book inventory: the physical net inventory based on adjustments due to quality
characteristics, considering realized transactions.

It is calculated using the formula:

BI = M - A - C

BI - Book inventory
M - Material stock exposure quantity
A - Collection of application exposures not yet realized
C - Correction stock exposure quantity.

Price Type Report-

This report displays the following key figures-

Open Contract
This key figure shows the quantity used in contract creation as the contract
exposure.

Inventory on Unrealized Transactions

After application document creation, the Open Contract exposure reduces and an
application exposure is created. The application exposure is displayed in this key
figure.

Inventory on Realized Transactions

Once revenue recognition has been carried out for the application document, book
inventory is displayed in this key figure.

Slate Report

You can use this report to view the exposure data for inventory, contract, and
futures trades.

POSITION REPORTING-

Position reports retrieve and analyze data changes over the course of a business
day.

Data displayed by the report can be calculated in any of the following ways-

1. The "Current Status report" displays data at the time of execution of the
report.
2. The "End-of-Day report " displays data according to a predefined end-of-day
snapshot, which defines a fixed time in the day when the data is captured as a
snapshot.
the end-of-day report can have the same data as a current status report.
3. The "Day-over-Day" report compares data between two different days and displays
the delta (or the difference) in the data between these days.

For Agricultural Contract Management 4.0, the position reports are developed using
CDS views.

For Agricultural Contract Management versions 3.0 and 3.0 SP01, on the other hand,
the position reports have been developed using BeX queries.
However, these reports can still be used after upgrading to Agricultural Contract
Management 4.0.

Adjusting Basis Rates-

Using transaction FDCS17B, you adjust the basis rate before performing a mark-to-
market valuation of the contract so that it is equal to the market-compliant
future.

Mark to Market Reporting-

To determine the relative value of a contract based on current market prices.

SAP provides a versioning and snapshotting framework that allows you to mark your
SAP Agricultural Contract Management documents to market.

This means that you can view the difference between the contract price on a
particular day and the end-of-day market price for the same commodity on the same
day.

In terms of the market, mark-to-market (MtM) reporting indicates the relative

value � as opposed to the book value � of the contract. In so doing, it increases
the efficiency and accuracy of contract processing.

The Versioned Logistics Pricing (CMM_VLOGP) and (CMM_VLOGP_KONVD) tables are

updated from the SAP ACM document flow.

The CMM_VLOGP update is triggered by the SAP ACM documents goods movements and
application documents.

The CMM_VLOGP_KONVD update is called from all application-relevant actions such as

load data capture (LDC), application reversal, and revenue recognition, where there
is a quantity involved. (Pricing redistribution does not result in an update to the
CMM_VLOGP_KONVD table.)

For washout and circle no updates take place to the CMM_VLOGP_KONVD table since
Explicit revenue recognition.

Profit and Loss Reporting-

A brief introduction to Profit and Loss (P&L).

P&L (sometimes known as 'PnL') is the term used by traders to refer to the daily
change to the value of their trading positions.

The general formula for P&L is P&L = Value today minus value yesterday.

Profit and Loss (P&L) reporting is a financial instrument used to determine a

company's profit or loss based on market factors, while also explaining the factors
that contribute to the profit and loss.

Traders can monitor the market valuation of commodities in a certain evaluation

period, and determine the factors to which the fluctuations in the market
evaluation can be attributed.

About P&L for SAP ACM-

To enable the procurement and sales of various agricultural commodities, SAP ACM
creates trading contracts. These agricultural commodities are traded on the
commodities exchange, and their market prices undergo fluctuation because of
various factors.

The P&L for SAP ACM solution uses existing Commodity Management queries for P&L
reporting to compute and explain the profit and loss on these contracts, while
extending the functionality to cover ACM-specific exception scenarios. This
computation of profit and loss for ACM-specific scenarios, and subsequent
determination of attributing factors, is also needed for stock.

Prerequisites

For a contract to be considered by P&L attribution reporting, the contract quantity

must be open and unrealized
Only physical contracts are supported
The quantity must have either a fixed price, a fixed FX, or bothFeatures

P&L for SAP ACM constitutes a CDS stack that is almost completely based on the CDS
stack for P&L for SAP CM.

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Invoice Router

The invoice router acts as a single gateway for handling both trade-relevant
expenses and non-trade-relevant expenses.

The invoice router decides, on the basis of your input parameters, whether an
expense is trade-related or non-trade-related, and routes you to the relevant
interface (either MIRO in the case of non-trade relevant expenses, or GTM in the
case of trade-relevant expenses).

The invoice router also displays the following information for trade relevant
expenses:
Accrued VBDs to be settled and their corresponding item details
Pricing trading contracts and logistic trading contracts related to the accrued
VBDs and their logistic documents
VBDs related to the invoice reference number that were settled using the
invoicePrerequisites.

CALL OFF-

When a purchase order or a sales order is created, the system generates a logistics
trading contract in the background.
At the time of such contract creation, a pricing Trading Contract is agreed upon in
consensus with the counterparty. This pricing TC is assigned to the logistics TC
during the call-off process.

OPEN QTY-
If there contract quantity is 1000 MT and sales orders are created for 50 MT, 60
MT, 90 MT on different delivery dates. Then the call off quantity would be 200 MT
and open quantity would be 800 MT.

If DPQS is applied on first shipment and if the delivered quantity is 45 MT then

the open quantity further changes to 805 MT.

Call-off cannot occur for contracts that have pre-payment data or for contracts
that are on hold due to undeclared explicit optionalities.

You can view the list of all call-offs that exist on a sales or purchase order in
the Call-Off Workcenter. If call-off exists, the status of the order is 'green' and
if the call-off does not exist on the order, the status is 'red'. You can perform a
call-off on those which are having 'red' status.

Reversal of a call off-

An assignment is made between the order and the pricing trading contract commodity
item at the time of call-off. You may have to reverse this during contract
application. In such a case, the contract application process reverses the original
call-off and applies the load to a new pricing TC.

Note
Goods movements are not reversed during reversal of call-off. When the call-off is
reversed, no document flow is visible and no linking is available.

Prerequisites
If the call-off was initially firmed by selecting the Firming checkbox, you have
deselected the checkbox to unfirm and to allow the reversal of call-off.

LOAD DATA CAPTURE-

Load Data Capture is one of the key functional areas within the SAP Agricultural
Management solution.

It comprises of Load Data Capture (LDC) transaction code and the Orchestration
Framework.
Load Data Capture allows users to capture weight, grade, and other logistical data
for bulk shipments (both inbound and outbound) of agricultural commodity products,
while the Orchestration Framework oversees the generation of follow-on documents.

LDC checks the approval status of the Trading Contract as only an approved contract
can be used during the LDC creation process.

Load Data Capture is integrated with the Orchestration Framework to trigger a call
to a stack of functions.

Load Data Capture is integrated with the SAP application document. The application
document is used to link a load quantity (captured during LDC) to a pricing
contract during the application process.

Load Data Capture is integrated with the nomination,, the scheduling and
communication document used in the Trader's and Scheduler's Workbench (TSW). A load
can be captured using the nomination as the reference document.

The Load Data Capture (LDC) Workcenter is a repository where users can enter and
update load information.

Prerequisites
Before using the LDC Workcenter, you must configure your settings In Customizing
for Load Data Capture and the Orchestration Framework under SAP Agricultural
Contract Management>Load Data Capture. Here, you can define, for example, the LDC
event type, the analysis type, the application instruction, and MoT-relevant
attributes, so that these values can be recorded in the LDC Workcenter.

One LDC is linked to 1 Delivery through the life cycle.

CHANGE LDC-

An existing LDC object can only be changed (that is, modified or updated) or
displayed in the following situations-

The object status is OF Execution Successful or OF Execution Failed

For objects with these statuses, you can enter new weight and grade information,
and can change existing event details.

The object status is OF Determination Triggered or Draft

For objects with these statuses, you can change weight, analysis, and
transportation information, and can make changes to certain event details.

Note that if the object status is Obsolete, you cannot make any changes to the LDC
object in question.

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Check what values can be changed for Successful, Failed cases.
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Make LDC Object OBSOLETE-

You can make an LDC object obsolete at any time. However, if the status flag is red
or chequered, you must ensure that the objects created during Orchestration
Framework (OF) processing are manually reversed and deleted in the reverse order
they were created. In other words, you must manually reverse the last document
created (check the OF log), and work back from there.

Adding Tabs to LDC Screens-

Prerequisites-

To use the Add-On Tabs framework, users must first execute the BAdI "Process User-
Defined Add-On Tabs for LDC Screens" to create the BAdI implementation for
/ACCGO/ADD_ON_TAB_UIS. This is done in Customizing for SAP Agricultural Contract
Management, under Enhancements Using Business Add-Ins> Load Data Capture.

This multiple use BAdI allows users to add tabs to the Create and Change screens
in the LDC Workcenter. It is called when the screen in question is being created,
during processing and before output event. Implement the methods to enable the
functions of the new screen

Customers can add up to two tabs, but if Brazilian localization is active in the
system, only one extra tab will be available for adding, since the localization
will be using the other tab. In order to use this framework, users must design
their own screens and write the flow logic of these screens to update the
appropriate structures and tables.
LDC- VENDOR SPLIT

Vendor split allows you to split ownership from one vendor with 100% ownership to
multiple vendors. You can perform vendor split for both commingled and purchase
scenarios.

To do this, you must first set up the vendor split rule in the Business Rules
Framework plus (BRFplus) Workbench. You can also define which vendor to process in
the purchase order created after the LDC is released. (The default purchase order
vendor is calculated using the LDC header vendor and application instruction.)

The following types of vendor split are available-

1. Ad-hoc split -

This split is defined during load data capture.

You manually define which vendors are included in the split, and the quantities (or
percentage) of the split. The ad-hoc split allows you to create and delete vendor
lines as needed.

2. Split profile -

This split is defined using a new business rule.

The business rule defines what splits are usual for a given vendor. If the
combination of material, vendor, and event location is configured in the business
rule, these splits are automatically retrieved and shown during load data capture.

3. Split at application -

This split is defined at application.

You can add comments to the LDC outlining the vendors, percentages, and
quantities, as well as the reasons why the split is delayed. These comments are
visible in the MAW.

Note
When creating an LDC, if you do not want to perform a split, you can select the
Block Split check box. This hides all vendor split information from the LDC.

To perform a vendor split, the LDC must have one of the following application
instructions:
03: Existing Contract
05: Regular Spot
06: Accumulate to Own
07: Accumulate to Store
10: Unassigned

For vendor splits, depending on the application instruction you select, the result
is always a commingled application document (CAD) or a purchasing application
document (PAD).

BRF+
Add the catalog /ACCGO/RULES_CATALOG ( Maintain rule data) to your user, and set up
the vendor split rule ( Vendor Split UI01).

NOMINATION - LDC:
The TSW oversees stock projection and the planning and scheduling of bulk shipments
through the use of nominations, allowing users of SAP Agricultural Contract
Management to schedule bulk shipments of commodity products while taking into
account supply, demand, and available transportation.

A TSW location is a node point on the transport system and is used as an

organizational entity for which certain information can be defined and later
defaulted by the system in subsequent TSW processes.

The nomination is a scheduling and communication document used in the Trader's and
Scheduler's Workbench (TSW).

Activities -

1. In the SAP Easy Access screen, maintain the TSW locations under SAP Agricultural
Contract Management > Load Data Capture > Maintain TSW Locations

2. In the SAP Easy Access screen, maintain the LDC-relevant TSW locations under SAP
Agricultural Contract Management > Load Data Capture > Set Up Master Data for LDC

3. In Customizing for Load Data Capture, define the ticket type to be used for TSW
ticket creation by different calling applications, including LDC ( SAP Agricultural
Contract Management > Load Data Capture > Define TSW Ticket Types for OF Events)

4. In Customizing for Logistics Execution, assign functions to groups under

Logistics Execution > TSW > General Settings > Junction Functions > Define
Junctions.

5. In Customizing for Nomination, configure your settings as necessary under

Logistics Execution > TSW > General Settings > Nomination.

ORCHESTRATION FRAMEWORK-

The Orchestration Framework (OF) is a tool that automates the logistics process. A
configurable framework governed by business rules, the Orchestration Framework is
used to determine the business scenarios in question.

Load Data Capture is the front-end to the OF. The OF determines logistical
documents for each application instructions defined during LDC. On event release,
the OF reads the application instruction defined for an LDC and determines various
possible scenarios.

The OF uses standard TSW ticketing functionality to create downstream documents.

The TSW ticket type identifies from which application or source (LDC, nomination,
or application document) a ticket originates or is created.

The Orchestration Framework [page 157] (OF) reads the data captured during Load
Data Capture [page 146] (LDC) to determine the business scenario in question. It
then calls the stack of services configured for that scenario in order to generate
follow-on documents.

Application Instruction -

Existing Contract
The application document is applied to an existing contract (using application
rules)
Open Contract
The application document is applied to an existing sales order or purchase order
(using application rules).

Inter/Intracompany
Stock transport order (STO) for load and STO for unload

Unassigned
None: The load is processed as commingled stock.

Accumulate to Store
None: The load is processed as commingled stock

Regular Spot
An automatic (spot) contract for an unplanned scenario is created. In this case,
the application documents are marked 'Awaiting Spot' in the background, until
further processing is performed in the Manual Application Workcenter to generate
the spot contract.

Accumulate to Own
An accumulate to own contract is generated upon receiving the first load from a
vendor, after which the quantities from future loads will be accumulated or updated
to that contract.

Return
Order/delivery return document for a purchase return or sales return

In Store Sales
Combines the steps to create LDC for a Sales scenario followed by Spot Purchase and
Accumulate to Own scenario

In Store Purchase
Generates the Accrual Application Document along with Purchase Application
DocumentPrerequisites

Note-
The function modules for OF execution begin with the namespace /ACCGO/OEP*.

The Orchestration Framework is instructed by the data captured by the LDC screen
(namely, the event ID, the application instruction, the event type, and the status
of the event, amongst others) to determine the scenario in question. Once the
scenario has been established, the OF calls the stack of services configured for
that scenario in order to carry out further processing.

The OF uses an interface ( /ACCGO/EXECUTE_OF) common to the entire API. This

ensures flexibility in function module (FM) creation and allows customers to create
as many FMs as needed with the service stack (junction function). BRF+ rules are
used to configure the specific movement scenario for OF execution. All standard
logistic documents can be automatically created through the FM stack. Customers can
use the sample FMs delivered by SAP Agricultural Contract Management as a basis for
developing their own FMs. These sample FMs generate goods movements and create the
application document, which contains the LDC ID.

Orchestration Framework Automation offers three operations -

Document Correction
Document Reversal
Stock in Transit
Prerequisites -
The Orchestration determination and execution processes have been executed and an
OF ticket has been generated successfully.

For Stock in Transit, you have maintained the movement types in Customizing for
Logistics - GeneralGlobal Trade Management Agricultural Contract Management
Contract ApplicationCommingled StockMaintain Movement Types .

System checks if application document can be canceled with the following conditions
and Reversal is not allowed:
1. If the application document is a Return Application Document (RPD or RSD)
1. If the application document type is different from AAD and CAD and if the
transition of status to cancelled is not allowed.
2. If application document type is a MAD and if settlement has the status Fully
Storage Settled.

2. If the application document type is CAD or AAD, Reversal is not allowed-

1. If there is any ticket with an error state for that application document.
2. If the application document status is different from Settlement not
relevant and Ready for Settlement.
3. If a settlement with status Intermidiate Storage Settled or Fully Storage
Settled already exists.
4. If all the application document quantity is not in Unassigned or Storage
state.

After the validation checks, the OF automation process reverses the document to its
previous version.
The system creates a new OF ticket and you can view multiple tickets in the
Recovery Report. One ticket shows the OF forward process and the second ticket
shows the Reversal process. The new ticket also shows the purpose of the change in
the ticket as 5 which stands for Reversal.

CORRECTION:

In some scenarios like the 3rd Party Purchase, you need to first reverse the
Application Document and then trigger Correction. This step is required only if the
document has been applied and not otherwise.

Once the required values are modified and the object is released, the OF Automation
process reverses the document and creates a new set of documents.

The process also creates a new OF ticket and you can view multiple tickets in the
Recovery Report. The new ticket shows the purpose of the change in the ticket as 2
which stands for Correction.

Stock in Transit
Stock in Transit (SIT) allows the system to adjust by adding or removing quantities
from Stock In Transit when the Load and Unload quantities mismatch.

Example
For example, in a 3rd Party Purchase with Title Transfer Origin (TTO) contract, you
create a Load Data Capture with 25 tonnes in a Load event and release the event.
The Orchestration Framework creates a 107+ movement in SIT with 25 tonnes. You then
proceed to create the Unload event with 27 tonnes. The Orchestration Framework
again tries to create a 109 movement, by moving 27 tonnes from SIT to unrestricted
stock. However, this movement fails because the SIT lacks 2 tonnes which are not in
transit. Typically, you are expected to manually add the 2 tonnes to the SIT and
re-execute OF to execute it successfully. But with SIT, this process is automated
thereby reducing the need for manual intervention

SIT adjustments are applicable for the following scenarios:

3rd party purchase TTO
Intercompany (TTD / TTO)
Intracompany (TTD / TTO)

BACK TO BACK SCENARIO

Back-to-Back is a trading scenario where a company sells a quantity of a commodity

that it does not yet own or hold in inventory.

This quantity may be at a vendor's site or may already be in transit to the

company.

To manage the movement and document chain when a quantity is sold to a counterparty
without physically being received by the company, data must be captured about the
delivered quantity, at its destination as well as potentially at its source.

Back-to-Back links the purchase and sales documents (the contract or order) through
the standard SAP transaction Nomination ( O4NM) .

It allows users to do the following-

Track inventory that is in transit for the Back-to-Back scenario in question

Link the sales and purchase processes in one transaction
Plan shipments according to the required customer and vendor terms
Explore different optionalities for purchase and sale contracts
Defer revenue recognition of a sale until the cost for the related purchase is
recognized
Relate the weights, grades, and characteristics for a Back-to-Back quantity to all
elements of the purchase and sale process

NOMINATION (T-code - O4NM)

A nomination is a scheduling document that is used to schedule bulk shipments of

agricultural commodity products.

It provides detailed shipment information and serves as a communication link

between the carrier, customer, and all other parties that are connected in a
transport.

In the maintenance screen, you create a nomination by using any of the following
combinations of criteria:
Two trading contracts (either a sales, purchase, or inter/intracompany contract)
Two orders (either a sales, purchase, or stock transport order [STO])
A purchase contract and an STO
A sales contract and an STO
An inter/intracompany contract and a purchase order, sales order, or STO

You can define or change optionalities at the nomination level.

Integration -

If a nomination is relevant for Back-to-Back [page 163], you can indicate this in
the nomination screen by selecting the Back-to-Back pegging type.
In certain scenarios, load data is captured using the nomination as a reference
document.

PEGGING-
Demand and Supply based scheduling.
Pegging is used to plan and schedule bulk shipments based on supply and demand
information.

The term 'pegging' refers to the matching of demand items to supply items for the
purpose of scheduling of bulk shipments, such as marine voyages or pipeline
batches. You plan and schedule bulk shipments, by assigning the pegged items to the
distribution schedule. During pegging, the system uses the supply and demand items
that are created to change or create quantities.

SIT Cockpit-

The SIT (Stock in Transit) Cockpit lets you view details of all the stock which is
in transit or due for delivery. You can use this function for a third party
scenario, and also for an intercompany and intracompany scenario.

Features-
The SIT Cockpit provides detailed information about the transit stock in the
following views-

Inbound View
This view provides details of the stock that is on the way to the incoming plant.
The ownership of this stock is with you, the receiving plant.

Outbound View
This view provides details of the stock for which the outbound delivery has been
made and is on the way to the target plant. The ownership of this stock is with
you, the supplying plant.

Anticipated View
This view provides details of the stock that the incoming plant is expecting, which
is an incoming stock. The ownership of this stock is not with you, the receiving
plant.

Note-
If you want to view an intercompany or intracompany document, select the
Inter/Intracompany checkbox.

For an intercompany or intracompany TTI (Title Transfer In Transit) sales scenario,

the stock is transferred from the outbound SIT of the seller to the inbound SIT of
the receiver.

You can filter the data in the views based on a number of combinations or
selection.

Choose Proof Of Delivery pushbutton for an intercompany or intracompany scenario to

transfer stock.

In the Anticipated View tab page, you can view all the documents for which delivery
is anticipated.

CONTRACT APPLICATION -
The contract application process links the application document to the pricing TC.

The linking occurs technically through the logistical TC, which is created upon the
save of the purchase order (PO) or sales order (SO).
The system creates an application document after the generation of a goods receipt
or goods issue (GR/GI) document.

In a planned purchase scenario, the PO is called-off against a pricing TC. At this

point, a link is established between the logistical TC item and the pricing TC
commodity item. The system creates an application document and establishes a link
between that application document and the pricing TC commodity item.

FEATURES-

Contract application occurs automatically in the system, however, the contract

application component contains a manual application workcenter, which enables you
to do the following tasks -

Display an application document (including application documents for a commingled

load)
Set a price for a spot contract
Set a final delivery indicator for a load
View application returns
Maintain pricing aspects
Assign a warehouse receipt
You can also use the manual application workcenter to create, display, and maintain
an application group. By grouping application documents together in application
groups, you can facilitate manual applications.

The application document has a one-to-one relationship with a goods receipt (GR)
document or goods issue (GI) document and is created at the time of posting.

The following are the Application Document Types:

1. Commingled Application Document (CAD) - Represents 3rd party goods stored at the
Company facility

2. Load Out Application Document (LAD) - Created when a company loads out 3rd Party
owned goods out of a Company owned facility

3. Accrual Application Document (AAD) - Represents a Company owned goods stored at

a 3rd Party Facility

3. Manual Application Document (MAD) - Represents a Company owned goods sold from a
3rd Party Plant

4. Purchase Application Document (PAD) - Represents a company purchased goods

linked to a purchase contract

5. Sales Application Document (SAD) - Represents a company Sold goods linked to a

sales contract

APPLICATIO RULES -

You can create the business rules by which the system executes contract application
in any given instance using the Business Rules Framework Plus (BRFplus) Workbench.

1. Application Mode
You use this rule to determine whether application is to be automatic or manual.
If you set the application mode as manual for a particular plant and commodity then
all the application documents created in that particular plant for that commodity
will be always sent to the manual application workcenter for manual application.
This rule is only applicable in an unplanned scenario

2. Auto-Application Type

In this business rule, you can determine for a given material and plant combination
which automatic application type the system employs - whether the application
document is applied to an existing contract (using application rules), a spot
contract, an accumulate to own contract, put in storage, or left unapplied.

3. Application Rules/Call-Off Sequencing

You can maintain application rules at plant level to select contracts and sort
them.

You can base the sorting of the selected contracts on the following criteria:

Pricing type of the contract � no price, no futures, fully priced, and so on.

Price status

Creation date (oldest to newest)

Delivery period selection (oldest open to the newest open � including future given
tolerance)

Settlement status, for example, with advance or pre-payment

4. Preliminary Overfill Tolerance

Using this rule, you can set a preliminary overfill tolerance that works in
conjunction with the contract overfill tolerance (an additional percentage). You
can set the provisional application to proceed with a warning, without a warning,
or to stop with an error message based on the values you maintain in the rule.

For example, if the open quantity is 100 MT, the contract tolerance is 10%, and the
preliminary overfill tolerance business rule range is 5% to 15%, then the following
results:

A provisional weight of up to 115 will allow contract application to proceed

without a warning message.

A provisional weight from 116 through to 125 will allow application to the contract
to proceed with a warning message.

5. Preliminary Underfill Tolerance

You use this rule to issue a warning or error message during evaluation of the
underfill tolerance maintained in the contracts. You can set the preliminary
underfill tolerance to a percentage figure that operates in conjunction with the
contract underfill tolerance. Furthermore, you can use the rule to determine
whether the system issues a warning or error message should the quantity fall into
the underfill tolerance range maintained in the business rule. For example, if the
open quantity is 100 MT, the contract underfill tolerance is 10%, and the
preliminary underfill tolerance business rule is 5 %, then the following results:
A provisional or final weight from 85 to 89 will allow application with a warning
message.

A provisional or final weight from 90 to 99 will allow application to the contract

with an information message.

6. Early Delivery Tolerance

You maintain this rule at the plant/commodity level to relax the delivery period
restriction. You must use the number of days that you maintain in the rule in
conjunction with the delivery period maintained for the commodity item in the
contract (delivery to date minus the number of days).

For example, if 7 days is maintained, and the delivery start date in the contract
for the commodity item is 2010-12-01, then a load arriving in the last 7 days of
November also can be applied.

7. Late Delivery Tolerance

You maintain this rule at a plant/commodity level to relax the delivery period
restriction. The number of days you maintain in the rule has to be used in
conjunction with the delivery period maintained for the commodity item in the
contract (delivery to date plus the number of days).

For example, if you set the rule to 7 days, and the delivery end date for the
commodity item in the contract is 2010-10-31, then a load arriving in the first 7
days of November also can be applied.

8. Call-Off Mode

This rule determines the call-off mode - automatic, proposed, or manual.

9. Firming

This is a selection rule (between firmed and unfirmed) that determines the firming
of a call-off.

10. Call-Off Tolerance

This rule is a yes or no decision rule. It determines whether tolerance maintained

in the contract is considered during call-off process.

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Can you explain what does this mean - Call-Off Tolerance?

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11. Call-Off Preliminary Over-Apply Tolerance

The rule is analogous to the preliminary overfill tolerance rule, in which you
maintain percentage values, but this rule comes into effect during the call-off
process.

12. Automatic Fill and Roll

This business rule comes into effect during the application process to determine
firstly whether a fill and roll to the next contract should occur or not, and
secondly whether a fill and roll to another commodity item within the same contract
should occur or not. .

13. Automatic Approval and Transfer to FI (Settlement)

This is a yes or no decision rule that determines automatic approval and transfer
to FI during the settlement process.

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Meaning of Automatic Approval and Transfer to FI (Settlement)?

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Manual Application Work center-

The manual application workcenter is a central cockpit for all functionality

relating to the application of loads to contracts.

Features -

You can use the manual application workcenter to perform the following tasks -

1. Display the contract application details

2. Set the ready to price indicator for accumulate to own contracts

3. Manually assign pricing lots

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Means?
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4. View return application documents

5. Set a final delivery indicator

6. Maintain and display application groups

Set a final delivery indicator -

You select the final delivery indicator to signify that no more new application
documents can be applied against that particular trading contract (TC) commodity
item.

You can set the final delivery indicator during the creation of application
document, however you can only trigger an underfill by setting the final delivery
indicator for the item in the manual application workcenter.

The system sends an underfill message to a third-party system depending on

tolerance settings.
APPLICATION GROUP -

An application group is a cluster of application document line items that are

grouped by plant, material, or counterparty. You can create application groups for
reporting purposes or for the joint processing of multiple application document
line items.

You create application groups in the manual application workcenter by searching for
and selecting the relevant application documents. Additionally, you can use the
manual application workcenter to display and maintain application groups.

It is possible to calculate a weighted average for the quality factors of each

application document item in the application group. You can manage this calculation
through a Business Add-In (BAdI).

Summarizing and averaging of application document values can be:

Automatically triggered during the creation of an application group

Automatically triggered during maintenance of the application group (when adding or

deleting application documents)

Structure
Each application group has a unique number, a description, and application group
type.

An application group can have the following processing statuses:

Unapplied

Errors

Provisionally Applied

Finally Applied

Re-evaluation Needed

Reversed

Displaying and Maintaining an Application Group -

You can display an existing application group and maintain it by changing its
description and adding or deleting application document line items in the manual
application workcenter.

Procedure
On the SAP Easy Access screen, choose Start of the navigation path Agricultural
Contract Management Next navigation step Contract Application Next navigation step
Manual Application Workcenter End of the navigation path .

Click the Application Group node.

Click the Maintain/Display node.

To display an application group, enter the number of the application group and
choose Execute (Execute).

To add more application documents to the group, select the application group and
choose Add Items (Add Items).

To delete application documents from the group, select the application group and
choose Delete Items (Delete Items).

To change the description of the application group, select the application group
and choose Change Description (Change Description).

Enter a new description for the application group and choose Enter (Enter).

Spot Contracts

You use this function to process unscheduled purchase of commodities from vendors.

There are two types of contract involved:

Spot contract

A spot contract can be used when a commodity has a potential for multiple
deliveries in one day.

Accumulate to Own (AO) contract

An AO contract is a type of spot contract. Unlike a spot contract, however, an

accumulation occurs over a period of time before sending to pricing by setting the
Ready to Price indicator.

Note Note

A spot contract is created after the execution of Spot Monitor.

An AO contract is created after receiving the first load from a vendor and the
execution of Spot Monitor. Then the quantities from further loads are accumulated
or updated to the created contract during further execution of Spot Monitor.

Prerequisites
The application rules for spot and AO contracts are enabled in Business Rule
Framework plus (BRFplus).

Note Note

This is an optional setting and needed only if you want to mark all the loads
received in a particular plant for spot or AO.

Features
You can use the following transactions to handle spot or AO commodities:

Maintain LDC (/ACCGO/UIS_WC)

Using this transaction, you can create a load data capture (LDC) object for a spot
or an AO commodity received.

In this transaction, you can create an LDC object in which you can define the
details for relevant spot or AO commodity.

The system applies the default discount premium quality schedule (DPQS) for the TSW
location.

Manual Application Workcenter (/ACCGO/MWC)

An application document with unassigned status can be marked for spot or AO

manually by using the commingled node inManual Application Workcenter.

Spot Monitor (/ACCGO/SPOT_MONITOR)

You need to execute the Spot Monitor to send the spot or AO contract request either
to the contract creation or change request in the third party trading system (3PT),
or to trigger the contract creation and update process within the ERP system.

Generating Contracts in Spot Monitor

You can use this procedure to generate spot or accumulate to own (AO) contracts as
well as to monitor these contracts using the Spot Monitor.

The functions offered by the Spot Monitor are realized by the report Spot /
Accumulate to Own Trade Requests (program /ACCGO/CAS_SPOT_MONITOR).

Prerequisites
The contract creation within the SAP ERP system takes place only when the switch
for third party trading system (3PT) integration is off.

Procedure
On the SAP Easy Access screen, choose Start of the navigation path Agricultural
Contract Management Next navigation step Contract Application Next navigation step
Spot Monitor End of the navigation path.

You can also execute the transaction code /ACCGO/SPOT_MONITOR.

The selection screen for the report Spot / Accumulate to Own Trade Requests
appears.

To search the relevant documents, enter the data in the Header Information block.

The following fields are available:

Vendor

Plant

Material

Document Date

Mode of Transport

Depending on the request you want, choose the options as follows in the Spot
Scenario Selection block:

For creation of spot contracts:

Mark the Simple Spot radio button and the Contract Create/Change checkbox.

For creation of AO contracts:

Mark the Accumulate to Own Create/Edit radio button and the Contract Create/Change
checkbox.

Choose Execute (Execute).

The creation of contracts is triggered in the background and the Display logs
screen, in which you can view the processing details, is displayed.

Result
The result varies based on the integration scenario as follows:

SAP ERP system only:

Creation or change of spot or AO contracts is processed only in SAP ERP system.

Third party system is connected to SAP ERP system:

The request for creation or change of spot or AO contracts is sent from the SAP ERP
system to the third party trading system (3PT) via the SAP PI system.

More Information
For more information on the 3PT integration, see Possible Third Party Integration.

For more information on the PI Content that is supported as part of SAP

Agricultural Contract Management, see Process Integration Content for SAP
Agricultural Contract Management.

Spot Purchase and Accumulate to Own

You use this process to handle the commodities received as spot or accumulate to
own (AO).

Process
The process for spot or AO takes place as follows:

You create a load data capture object for the spot or AO commodity.

For step-by-step procedure, see Creating Load Data Capture Objects.

You mark the application document for spot or AO in Manual Application Workcenter.

For step-by-step procedure, see Marking Application Documents in Manual Application

Workcenter

You generate the spot or AO contract using the Spot Monitor.

For step-by-step procedure, see Generating Contracts in Spot Monitor

You send the spot or AO contract for settlement by setting the contract to Ready to
Price.

For step-by-step procedure, see Setting Contracts to Ready to Price

Application Instructions in LDC -

05 Regular Spot
06 Accumulate to Own

Creating Load Data Capture Objects

You use this procedure to create load data capture (LDC) objects for spot or
accumulate to own (AO) in the Load Data Capture (LDC).

Prerequisites
You are authorized to work in the Load Data Capture (LDC).

Procedure
On the SAP Easy Access screen, choose Start of the navigation path Agricultural
Contract Management Next navigation step Load Data Capture Next navigation step
Maintain LDC End of the navigation path.

You can also execute the transaction code /ACCGO/UIS_WC.

The Load Data Capture � Maintain screen appears.

In the dialog structure, choose Start of the navigation path Create LDC Object End
of the navigation path.

The Create Load Data Capture Object screen appears.

Enter the values in the following mandatory fields:

Application Instructions

Select 05 Regular Spot or 06 Accumulate to Own.

LDC Type

Select Incoming or Outgoing.

Mode of Transport

Select one from:

01 Road

02 Rail

03 Sea

04 Inland Waterway

05 Air

06 Postal Service

90 TSW - Not Applicable

Event

Select Load or Unload.

Event Location

Select a TSW location using the search help provided.

Material

Select a material, such as corn, wheat and so on, using the search help provided.

Choose Execute (Execute).

In the next screen, a new row for this LDC object is created. At this stage, the
object is created only temporarily as '$1' is displayed in the LDC ID field.

Click the linked text '$1' which jumps to the detailed screen.

Enter the required information on the Event Details and Weights Details tabs.

Choose Save (Save).

The system updates the LDC ID field from the temporary number '$1' to a new ID
number.

To check the log, choose Application Log (Application Log).

Marking Application Documents in Manual Application Workcenter

You use this procedure to mark the application documents for spot or accumulate to
own (AO) in the Manual Application Workcenter (MAW).

Prerequisites
You are authorized to work in the Manual Application Workcenter (MAW).

Procedure
On the SAP Easy Access screen, choose Start of the navigation path Agricultural
Contract Management Next navigation step Contract Application Next navigation step
Manual Application Workcenter End of the navigation path.

You can also execute the transaction code /ACCGO/MWC.

The Manual Application Workcenter screen appears.

In the dialog structure, choose Start of the navigation path Application Workcenter
Next navigation step Contract Application End of the navigation path.

The Contract Application screen appears.

Search the relevant documents for which you want to mark for spot or AO by
specifying the Application Document number.

To make your search more precise, you can also specify other fields, such as:

Application Document Type

Document Date

LDC Object ID

LDC Group ID

Purchase Order

Nomination Key

Choose Execute (Execute).

Based on the selection criteria specified, the selected documents are displayed
under the Contract Application Documents area at the top half of the screen.

Under the Contract Application Documents area, select one or more line items with
Ready To Apply status.

Under the Accumulate to Own Contract Req (Accumulate to Own Contract Req) button in
the ALV grid, choose Accumulate to Own Contract Request or Spot Contract Request.

The status of the line item changes to Awaiting for Spot / AO.

Setting Contracts to Ready to Price

You use this procedure to set the accumulate to own (AO) contracts to Ready to
Price indicator in the Manual Application Workcenter (MAW).

To make an AO contract available for pricing, the following two steps need to be
done:

Ready to Price indicator is marked

Approval indicator is marked

Prerequisites
You are authorized to work in the Manual Application Workcenter.

Procedure
Setting Ready to Price Indicator
On the SAP Easy Access screen, choose Start of the navigation path Agricultural
Contract Management Next navigation step Contract Application Next navigation step
Manual Application Workcenter End of the navigation path.

You can also execute the transaction code /ACCGO/MWC.

The Manual Application Workcenter screen appears.

In the dialog structure, choose Start of the navigation path Application Workcenter
Next navigation step Set Ready to Price End of the navigation path.

The Set Ready to Price screen appears.

Search the relevant AO contract by specifying the Trading Contract number.

You can also specify other fields in the Set Price for Spot - Accumulate to Own
block.
Choose Execute (Execute).

Based on the selection criteria specified, the selected contracts are displayed in
the list.

Select a contract.

Note Note

You can only select one contract.

Press the Ready to Price (Ready to Price) button.

The checkbox in the Ready to Price column for the selected contract is marked.

Setting Approval Indicator

On the SAP Easy Access screen, choose Start of the navigation path Agricultural
Contract Management Next navigation step Contract Application Next navigation step
Manual Application Workcenter End of the navigation path.

You can also execute the transaction code /ACCGO/MWC.

The Manual Application Workcenter screen appears.

In the dialog structure, choose Start of the navigation path Application Workcenter
Next navigation step Set Ready to Price End of the navigation path.

The Set Ready to Price screen appears.

Search the relevant AO contract by specifying the Trading Contract number. You can
also specify other fields in the Set Price for Spot - Accumulate to Own block.

Choose Execute (Execute).

Based on the selection criteria specified, the selected contracts are displayed in
the list.

Select a contract for which you want to mark the Approval checkbox.

Press the Approve (Approve) button.

The checkbox in the Approval column for the selected contract is marked and the
traffic light in the Sts Lights column changes from Red (Red) to Green (Green).

COMMINGLED LOADS -

Load that is not owned by the company but is stored in same location as companys
own inventory.

Its quantity and quality characteristics may become indistinguishable from other
inventory.

The company must ensure that a commingled load that is stored on its site is
available for retrieval by its owner at the same or better quality as when it was
delivered to the company's site.

There may be a fee associated with the storage of the stock and the quantity may or
may not be purchased by the company from the owner.
Using this function, you can keep track of movements associated with commingled
loads and manage their contracts.

Using the Commingled Load function, you can do the following -

Manually calculate a storage fee for a commingled quantity using the storage
programs
Exclude a commingled quantity from the firm's inventory quantity
Calculate commingled quantities using the storage programs

Prerequisites-

1. You are authorized to work in the Manual Application Workcenter.

2. You have maintained the storage locations in Customizing

Logistics - General > Global Trade Management > Agricultural Contract Management
>
Contract Application >
Commingled Stock > Maintain Storage Location for Negative Posting

3. You have maintained the movement types in Customizing

Logistics - General > Global Trade Management > Agricultural Contract Management
>
Contract Application >
Commingled Stock > Maintain Movement Types .

4. You have maintained the required master data settings in the Business Rule
Framework plus.

*Assignment of Application document to contract -

You are in the Manual Application Workcenter (MAW) and commingled application
documents have been searched and available in MAW.

Under the Contract Application Documents area in MAW, select one or more line items
to assign the contract.

Note Note

The selected line item must have an open quantity available with title transfer at
destination.

Change the value in the Picked Quantity field, if necessary.

Under the Manual Selection of Contracts (Manual Selection of Contracts) button in

the ALV grid, choose Manual Selection of Contract or Propose Contracts.

If you choose Propose Contracts, enter the value in the Purchasing Organization and
Purchasing Group fields in the popup displayed.

If you choose Manual Selection of Contract, enter the value in the Trading Contract
field.

Choose Continue (Continue).

For Propose Contracts, a list of contracts is displayed. Select a contract and

choose Enter (Enter).

For Manual Selection of Contract, the contract you specified is displayed. Select
the contract and choose Continue (Continue).

Result
A new line item is created with the status Finally Applied for both full and
partial quantity applications.

Split to contract is under this topic, read online.

Split to Vendor is under this topic. read online.

CONTRACT SETTLEMENT -

Contract settlement is an invoicing and billing pre-processor that consolidates

multiple transactions against one or more contracts.
From a business process standpoint, settlement takes place just after application.

Contract settlement is broadly organized into the following three types-

Provisional Settlement
Final Settlement
Adjustment Settlement

Provisional settlements are created under the following circumstances:

1. When only a provisional weight or provisional grade is available

2. When only provisional price is available for a portion of the application

document line or sub-line

3. When a user can create a subsequent provisional shipment settlement with changed
weight, grade, and price from previous provisional settlement (with a validation
that ensures an actual condition has changed to prevent creation of a zero impact
settlement)

Adjustment Settlement

A financial settlement created for a settlement document after the final settlement
document has been released for invoicing. The purpose is to capture additional
financial adjustments that have happened to the preceding invoice or billing
document due to additional expenses on the contract and so on.

Settlement Group

A settlement group is a collection of settlement units. Each application document

item is mapped to one settlement unit, and multiple settlement units are grouped
into a settlement group using grouping criteria. Predefined split criteria prevent
the grouping of two settlement units into the same group. When both grouping
criteria and split criteria are applied at the same time, split criteria always
overrides grouping criteria.

For each settlement group, an agency business document (ABD) is created with the
ABD items mapped to the settlement units. For example, if the settlement group is
formed out of two settlement units, an ABD would be created with two line items and
the details for each of the items would be copied from the corresponding settlement
unit. The settlement group corresponds to the header in the ABD.

The settlement unit has the following features:

Payment Split

This occurs only on the purchase side. This enables you to split the payment due to
a vendor with their business partner. The trading contract should specify the
business partners with whom the payment can be split based on a percentage or based
on a fixed amount. For example, vendor X wants to split the value of its
settlements across vendor A and vendor B equally, then the split value rule will be
vendor A � 50%, vendor B � 50%. So whenever a settlement occurs for vendor A, the
value of the settlement will be split and paid to vendor A and vendor B. If another
split percentage is entered by the user in the settlement work center, the payment
split value percentage maintained here will not be used. Once you have approved a
document which has payment split, a payment split accounting document number is
generated. You can view this at the settlement group level.

Lien Holders Tab

These are defined for vendors sharing titles of goods in the trading contracts.
When there are lien holders defined for a vendor, payment to vendor is always done
by check and bears the names of both vendor and lien holder. When a settlement unit
or settlement group is generated, the liens are retrieved for the vendor,
commodity, state, and country, and dates (with the current settlement date). If the
vendor of the settlement is in a partnership, all the liens associated with the
partnership and the other vendors in the partnership will be retrieved. In the
settlement unit, you can deactivate a lien for the particular settlement unit by
deselecting the Active checkbox.

On the SAP Easy Access screen, choose Start of the navigation path SAP Agricultural
Contract Management Next navigation step Contract Settlement Next navigation step
Maintain Lien Settings End of the navigation path to maintain all lien related
data. In this master data transaction, you can add, change, and display the lien. A
new lien ID is generated for each lien added to the vendor. You can add several
liens for the same vendor.

Deferred payment

This is only valid for a purchase scenario. Deferred payments occurs is when the
payment to a vendor is delayed up to a particular date. Deferred payment lets the
customer pay a lump sum on a decided date to the vendor for several transactions
rather than paying as soon as each transaction takes place. When a transaction
takes place, the payment is put on-hold in a separate deferred account. On the
deferred payment date, the amount from this account gets release to the vendors
account. For a deferred payment scenario, the invoice is always put on a Settlement
Hold Invoice status. On the deferred payment date, you must change the status from
Settlement Hold Invoice to Release Invoice in the Settlement Approval Queue. You
can maintain the deferred payment details either at contract application or at
contract settlement level. Following are features of deferred payments:

Deferred payment and pre-payment do not occur at the same time.

Payment cannot be deferred on the contract once settlement is released.

If the payment is deferred on the contract once the settlement is complete, you
need to defer the settlement.

Payment is deferred for the entire amount on the settlement group.

Information in settlement, which is taken from the contract (service fee, pre-
payment, deferred payment), should not change on the contract after the settlement
is released. Settlement will not consider any changes.

Pre-Payments

You can choose to make a down payment on a contract. This initial payment is called
pre-payment and a provisional settlement is done. The pre-payment amount is
retrieved at the time of settlement. This does not affect the net amount on the
settlement unit. However, when the invoice is created, the system checks if a pre-
payment exists and clears the pre-payment posted earlier.

PREPAYMENTS -

You can choose to make a down payment on a contract. This initial downpayment is
called pre-payment and a provisional settlement is done.

The pre-payment amount is retrieved at the time of settlement. This does not affect
the net amount on the settlement unit. However, when the invoice is created, the
system checks if a pre-payment exists and clears the pre-payment posted earlier.

Features -

You can make a pre-payment on a contract, for both sales and purchase orders. (see
Creating Pre-Payment Requests)

In the case of a purchase order, a pre-payment is made. During invoicing, the down
payment is cleared.

In the case of a sales order, a pre-payment is requested. At the time of billing,

clearing document is posted for corresponding pre-payments.

A field is provided on the settlement unit to capture the consumption amount with
the pre-payment amount defaulted by the system. You can also overwrite the
consumption amount.

Example
For a sales order value of $10,000 you can choose to make a pre-payment of $4,000.
For the pre-payment, you can manually adjust the consumption amount as $2,000
indicating that you want to consume only $2,000 of the pre-payment amount. At the
time of invoice creation, the final amount is $10,000 though a manual clearing of
only $2,000 is required for settling the payment.

Post the pre-payment as follows:

To Post Customer Down Payment, use transaction F-29.

To Post Vendor Down Payment, use transaction F-48.

AGENCY BUSINESS DOCUMENT (ABD)

The agency business document (ABD) is a superior term for sales and purchase
activities and can be divided into two sub document types -

Expense settlement document for sales scenario

Vendor Billing Document (VBD) for purchase scenario

The information from settlement flows into the following documents -

In sales, billing due list displays deliveries that are associated with the
approved ABD.

In purchase, ABD information flows into MM (Material Management) invoice. The

system makes financial postings from the SD (Sales and Distribution) billing
document or the MM invoice.

There are several stages in the contract settlement process, such as

Create
Release - done in Change Settlement
Cancel - done in Change Settlement
Approve - done in Approve Settlement
Reject - done in Approve Settlement
Reverse - done in Settlement Reversal
Return - done in Settlement Returns
Adjust - done in Settlement Adjustment

Note -
For a non-self-billed scenario, if you choose Approve, the document goes into the
Settlement Hold Invoice status. In such a case, you choose Release Invoice to
release the document for invoice creation.

For each settlement group, an ABD is created.

For a sales and purchase scenario, if you choose Reject, the settlement document
can be edited. You can then make the necessary changes and release the document.

-----------------------------------------------------------------------------------
------------------------------------------------
Try after Settlement Reject, make changes to Settlement document and release it.
-----------------------------------------------------------------------------------
-------------------------------------------------

Adjusting Settlements

Settlement adjustment lets you create settlement adjustment documents. This is used
to make a financial adjustment to the settlement units. Settlement adjustment does
not update the application document or free up any pricing lots. It only updates
settlement reversal.

Settlement adjustment is only possible after an approved final settlement that has
been invoiced.

-----------------------------------------------------------------------------------
-------------------------------------------------
Settlement adjustment is only possible after an approved final settlement that has
been invoiced.
Try.
-----------------------------------------------------------------------------------
--------------------------------------------------

Reversing Settlements

You use this procedure to reverse a settlement. A settlement reversal always

creates a credit memo request on sales or a credit memo on purchase side and will
mark the linked application document as settlement reversed.

The sales credit memo request is created with reference to the original invoice
and the purchase credit memo with reference to the purchase order. There can be a
partial or full settlement reversal. A partial settlement reversal is executed when
only a part of the settlement group is reversed, which means only a few settlement
units out of a group. A full reversal is the process where a credit for the entire
amount of the settlement group is created. The user cannot change any financial
values.

A new settlement group ID and settlement unit ID is created. This new settlement
document will have the document category as R

Once you reverse a settlement document, you can make adjustments to the values in
the document. After you have made the changes, you can release the settlement
document and continue with the settlement procedure.

-----------------------------------------------------------------------------------
------------------------------------------------
Try if we can make adjustment to the values in the document after Settlement
reversal.
-----------------------------------------------------------------------------------
------------------------------------------------

Returning Settlements

You can only return a final settlement document whose revenue has been recognized.
This is invalid for a provisional settlement scenario.

Settlement return allows the selection of return application documents for

settlement creation. The settlement returns document once created goes through the
same lifecycle as a normal settlement document.

Once you have created the invoice for the returns settlement document you must
recognize revenue.

NOTE:
When do we Cancel, Reject, Adjust, Return Settlement -

If we have Created the Settlement, then we can Cancel the settlement in Change
Settlement.

If we have Released the Settlement then we can Reject the Settlement in Approve
Settlement.
We can make changes to the Settlement and then Release it again.

If we have Approved the Settlement and Invoice is created, then we can do the
Settlement Adjustment in Adjust Settlement.

In case we have done the Invoice and Revenue Recognition then we can do the
Settlement Return.

NON-STANDARD SETTLEMENT -

Non- Standard Settlement is used to Settle without movement of commodities.

The firm may enter into a purchase or sales agreement with a counterparty and then
later determine that the commodities should not be moved. In such cases, non-
standard settlement is done and the two counterparties settle the trading contracts
involved. This occurs in scenarios, such as a washout, an underfill, a
cancellation, or a circle.

INVOICE SETTLEMENT -

A purchase invoice is called MM invoice and a sales invoice is called a billing

document or SD invoice. Financial postings are made out of the billing document or
the MM invoice. An MM invoice is created automatically but a billing document must
be created manually.

Features-
One settlement group should be billed as one invoice

CREDIT MEMO

A credit memo is issued by the seller to the buyer. This is issued if the goods are
incomplete, damaged, or incorrect. A credit memo is also issued if the buyer has
paid too much money.

In some cases, a settlement document for a particular application document is

invoiced and subsequently, a new settlement document is created for the same
application document. If the amount in the new settlement document is negative or
lesser than the previous billing document, then a credit memo is created.

DEBIT MEMO

A debit memo reduces the amounts payable to a vendor, for example, when you send
damaged goods back to your vendor. When a company fails to pay or short-pays an
invoice, a debit memo is issued for the balance and any late fees owed. Debit memos
are identical to invoices.

In some cases, a settlement document for a particular application document is

invoiced and subsequently, a new settlement document is created for the same
application document. If the amount in this settlement document is positive or
higher than the previous billing document, then a debit memo is created.

-----------------------------------------------------------------------------------
----------------------------------------------Explain second para in Credit memo
and Debit memo. Also, try doing it for purchase and sales scenario.
-----------------------------------------------------------------------------------
----------------------------------------------

Debit Memo Iam Seller. If the amount calculated for the customer is too low, If
the customer is not charged fully then you create a Debit Memo. For example
calculated with wrong scale price.

Credit Memo Iam Seller. If the amount calculated for the customer is too high, if
there is a defective product sent to customer, you can create a Credit memo. For
example discount was not added.

Note -

In case an invoice or debit memo is going to be reversed a credit memo has to be

created.

In case a credit memo is going to be reversed a debit memo has to be created.

Note-

In case of multiple billing documents for the same delivery, only the first invoice
would be based on the original document. Subsequent invoices will be billed as a
debit or credit request. For example, final settlement after provisional settlement
would be billed as debit or credit request.

REVENUE RECOGNITION AND PURCHASE REALIZATION -

Once a contract quantity has been executed or canceled and settled, expenses or
revenue related to the quantity must be recognized in the financial accounts of the
firm.

SAP Agricultural Contract Management has the ability to issue invoices prior to
title transfer (title and risk of loss transfer), for example, processing sales
orders for goods sold and delivered with lengthy transit times. In these scenarios,
revenue must be deferred and associated expenses accrued for title transfer. Once
title transfer occurs, revenue is recognized, along with the cost of goods sold and
the accrued expenses and service revenues.

In certain situations, invoices are issued before final price determination

(including price, weight, or quality) or title transfer takes place, for example,
in the case of a contract commodity delivered with lengthy transit times where
governing weights or governing qualities are determined at the destination after
arrival and unload. In these scenarios, revenue must be deferred and associated
expenses accrued until title transfer, final price, governing weight, and governing
qualities have occurred. Once all four events occur, revenue is recognized, along
with cost of goods sold and accrued expenses. Costs include primary expenses (cost
of goods sold from goods issue) and any secondary expenses incurred in association
with the sale and shipping of a product.

For process consistency, all revenue recognition processes will utilize ABDs in a
consistent manner for all third party and intercompany sales scenarios.

The Revenue Recognition monitor is an SAP GUI ALV-based report that displays data
and other related documents from the event registry. The monitor only displays data
and does not allow users to change records

Prerequisites
You have defined the fields that need to be maintained in the trading document in
the Customizing activity Maintain Settlement Events for Revenue Recognition.

View the document flow

Utilize Settlement Event indicators, as follows-

Title Transfer
After goods issue, the date of title transfer is determined and updated in the
delivery document. For destination sales, the document uses the estimated date of
title transfer, unless this date is replaced by a confirmed actual date of title
transfer. The settlement event registry is notified with the date of title transfer
in conjunction with the final settlement. If a delivery confirmation is received
from a customer, then a notification to set the title transfer date can be sent to
the settlement event registry.

Final Price

The final settlements with final prices update the event registry on approval.

Governing Weight

After the governing weight certificate is entered into the Q Repository, the
governing weight certificate becomes available. The system then triggers a
notification at final settlement of the settlement event registry that the
governing weight is final.

Governing Qualities

When the governing quality certificate becomes available, the system triggers a
notification at final settlement of the settlement event registry that the
governing quality is final. If there are multiple governing quality
characteristics, then this settlement event indicator is set after all governing
quality characteristics have been received.

PURCHASE REALIZATION PROCESSOR

This processor evaluates the settlement event registry and initiates the purchase
realization for all application document items in which all the settlement event
indicators are selected. After purchase realization, application document quantity
types are updated in the contract commodity line. If a third party exists, the
relevant goods movement indicator is also sent to them.

In third party and intercompany purchase scenarios with contract reference

purchases, revenue is realized based on the same settlement event indicators as for
revenue recognition in sales scenarios with contract reference.

The Governing Weight and Governing Quality checkboxes are set during contract
application, on the physical receipt of the good. The Title Transfer checkbox is
set based on incoterms on the contracts during contract application. The Final
Price checkbox is set during contract settlement. Purchase realization contains an
additional checkbox called the Physical Receipt of Goods.

A goods movement message with indicator 4 is sent to the third party on the
physical receipt of the goods after the realization of an application document.
This helps the third party update their inventory with the information that all
transactions are complete.

REVENUE RECOGNITION PROCESSOR

The Revenue Recognition Processor evaluates the settlement event registry and
initiates the revenue and expense recognition for those delivery document items for
which final settlement and billing has been performed and where all settlement
events have occurred.

For partial application, revenue recognition in a contract settlement scenario is

based on separate ABDs. These revenue recognition ABDs create the required
reclassification postings in accounting, based on standard account determination.
Separate ABDs are created per settlement group. This allows the proper support of
foreign currency settlements, as each settlement group may have a different
translation date (foreign exchange rate key date).

POSSIBLE THIRD PARTY INTEGRATION

SAP Agricultural Contract Management offers the functions that enable the
possibility of integration with a third party trading system (3PT).

To integrate with a 3PT system, the relevant switch must be activated, so that
messaging between the SAP Agricultural Contract Management (in SAP ERP) and the 3PT
is possible.

You can make this setting under the Customizing for Logistics - General > Global
Trade Management > Agricultural Contract Management > Basic Settings > Activate
Switch for Systems Integration .

The following options are available:

1. ECC Only Solution

This means that the system is not integrated with a third party trading system.

Activate the switch /ACCGO/SWITCH_ECC.

2. 3rd Party Integration

This means that the system is integrated with a third party trading system.

Activate the switch /ACCGO/SWITCH_3PT.

Note -

Once you have activated an option, it is not possible to change this Customizing
setting.

Integration
SAP NetWeaver Process Integration (SAP PI) is used to link the SAP ERP system and a
3PT system.

If the third party integration is activated with SAP Agricultural Contract

Management, capturing of commodity contracts from the third party trading system
(3PT) is supported.

This includes the capturing of information such as discount premium quality

schedule (DPQS), tolerance schedule, and so on.

Features
Prior to its use in contracts in the 3PT system, reference data must be transferred
from SAP Agricultural Contract Management (in SAP ERP) to the 3PT.

The reference data includes:

Governing Weight
Governing Analysis

DPQS Volume Schedule

DPQS Value Schedule

Tolerance Schedules

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TO KNOW-
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contract ammendment - what can be changed if contract is aproved, application is
created, settlement is created

ldc reversal for back to back scenario, ldc ammendment,

Re-apply to new contract
Settlement - cancel, reject and change and release, adjustment working
when credit memo and debit memo is created

CONTRACT AMMENDMENT-
CED 350 System

Contract 1100009390
Settlement 1000000338

Applied 137 MT
Settled 135 MT

ORIGINAL QTY 1000 MT

OPEN QTY - 863 MT

Nomination created - 12396 /20

1. Contract 1000 MT is flat priced. Applied is 137 MT. Settled is 135 MT.
Once price fixation exist then quantity cannot be changed.
Once Settlement has used the price from the line then we cannot change the price
for remaining qauntity

2. Contract 1000MT. Priced 100 MT. Not Applied. Approved contract.

System allowed to lift the price for 100 MT. And then delete the price fixation.

3. Contract 1000 MT, none priced, no application. Approved contract.

System allowed to increase the quantity from 1000 MT to 2000 MT.

4. Contract 2000 MT, none priced, no application. Approved contract.

Systemd does not allow to reduce the quantity from 2000 MT to 1000 MT. System
allowed to delete the commodity quantity.
Now I can change the quantity at item overview and then item details to 1000
MT.

5. System allowed to change the Incoterm, Payment term at header level after the
contract had been settled.

6. Destination incoterm, Destination/ unload DPQS. then for Sales scenario at load
Provisional Application would be created.
Final Application is created at Unload.

7. Contract 1000 MT, Application 200 MT, Not Settled, Priced 1000 MT
System allows to Lift the price. After lifting new price can be set for the
entire line of 1000 MT.
Cannot delete the line of pricing now. Error is - Cannot delete; distributions are
assigned for this price fixation.
Cannot change the quantity now. Error is Price Fixation exists.