Changing the automatic Distribution Rule from Per to Full

Question

Hello SAPians,
I have a scenario where the Customer is maintaining the Moving Average Price (I know this is not SAP suggested, I am in the process of convincing to move from moving avg to Std) for the Semi-finished goods and finished goods.
It is Product Cost by Order scenario where Process Orders are using and the settlement rule to the Material and distribution rule is "Per" (Periodic). The main reason Customer had this Per was they would not be able to settle the Order once they settle it in full.
But due to increased issues in month end atctivities due to thie 'Per' settlement (settlement of Process Orders not settling properly in the last month due to the failure of Batch jobs and other reasons). I want to suggest them to use Distribution Rule 'Full' instead of 'Per' because of the following advantages considering the above scenario.
1. The 'Full' settlement can be settled if the Order is not in Teco or closed status any number of times as long as there is the Variance sitting on the Order.
2. The 'Full' Distribution rule will not create issue if the variance is sitting on the Order in the closed period because when you do the settlement in the next period, system will allocate the variances from the last period to the Material Receiver in the current Period(I have not yet tested this scenario) and has not been. (Yeah I know there will be issue if the Material has been moved out of inventory before the settlement happens, they have another set up to update the Material prices manually by keeping the track of cost of Material).
3. So the config change will be the Product cost by Order -> Manufacturing Order-> Define Cost-Accounting-Relevant Default Values for Order Typ --> change the Default rule from PP1 to PP2 'Process orders (periodic settlement)'
Please let me know if what I am thinking is wrong based on this sceanrio and also please give me some more insight if I am missing any points.
Thank you very much for your time!
-Harter.

Answer 1

Hi Balaji/Ajay,
Could you please help me in understanding the effect of Variances if I change the Order type to FULL in this scenario (Moving Average price for Finished good Material)?
I checked the configuration and the Variance is only Total Variance that is settling to FI and COPA.
Also client is more concentrated on Variance accumulated per year and not per month.
Let's say I have Order in Period 9 where the actual debits on the Order are $1000 and actual credits are $1200 where balance (variance) is $200 and suppose I missed the Period 9 settlement and I want to settle this Order in Period 10 where I had $100 variance in that Period 10
Period         Variance on Order                Status
9              $200                   missed
10              $100                   not yet
So now when I settle the Order in period 10 (with FULL as settlement type), it settles $300 instead of $100 variance. So if this is the case, if I look at the Variance data, yes the variance data is wrong but if I look at yearly perspective, it looks right but I think I am missing something here, right?
Also what happens if the Order is open more than one year and the same scenario happens, the Variance will be posted to new year which is again issue, right?
Am I in the right direction?
Please advice.
Thank you,
-Harter.