Improve Financial Tracking in Metal Fabrication

In #SAP S/4HANA and other HANA-based systems, MM (Materials Management) and FI (Financial Accounting) modules are integrated to orchestrate the flow of materials and their associated financial implications. This integration ensures accurate and efficient management of inventory, purchasing, and related financial aspects. Here's how it works: 1. Material Movements: MM tracks the movement of materials throughout the supply chain, including: Goods receipt (GR): Receiving materials from suppliers. Goods issue (GI): Issuing materials for production or other purposes. Inventory transfers: Moving materials between different locations. Each movement triggers automatic accounting entries in FI, capturing the financial impact: GR: Debits inventory accounts and credits vendor accounts. GI: Credits inventory accounts and debits consumption accounts based on material usage. 2. Valuation and Costing: MM manages material valuation through various methods like moving average, standard costing, or FIFO/LIFO. This valuation information is seamlessly integrated with FI, ensuring accurate costing of products and calculation of COGS (Cost of Goods Sold). 3. Invoice Processing: When invoices are received from suppliers for purchased materials, they are processed in MM before integration with FI. MM verifies the received materials and their prices against purchase orders, enabling efficient invoice matching and approval. Once approved, the invoice data is automatically transferred to FI, triggering the creation of an accounting document that: Debits a vendor account for the payable amount. Credits the relevant inventory account based on the received materials and their valuation. 4. Payment Processing: When payments are made to suppliers, FI handles the process, updating the vendor account and relevant cash or bank accounts. 5. Integration Benefits: Improved accuracy and efficiency: Automatic data flow minimizes manual entries and reduces errors. Real-time visibility: Users can access both inventory and financial data for comprehensive insights. Simplified operations: Streamlined processes across MM and FI enhance overall efficiency. Enhanced decision-making: Integration provides a holistic view of materials and their financial implications, aiding informed decisions.

Why Every Manufacturer Needs a Financial Dashboard Running a manufacturing business means keeping track of a lot of moving parts—production costs, cash flow, inventory, and more. 📊 But trying to manage it all without clear data can feel like driving blindfolded. That’s why a financial dashboard is a must for any small manufacturer. I worked with a manufacturing business that was struggling to make sense of its financials. They had spreadsheets everywhere but no clear way to see how their business was actually performing. We set up a simple financial dashboard that gave them a real-time snapshot of their key metrics—and it changed everything. Here are the key metrics every small manufacturer should track on their dashboard: 1️⃣ Cash Flow: Monitor inflows and outflows of cash so you always know how much working capital you have on hand. This helps avoid unexpected shortfalls and keeps the business running smoothly. 2️⃣ Profit Margins: Keep an eye on both gross and net profit margins. If margins are shrinking, the dashboard will give you an early warning so you can dig into your costs and pricing. 3️⃣ Inventory Levels: Track your raw materials and finished goods in real-time. Knowing when to restock—and when to hold off—keeps cash from being tied up in excess inventory 🏗️. 4️⃣ Accounts Payable & Receivable: A good dashboard tracks who owes you money and who you need to pay. This helps ensure timely payments from customers and helps you manage supplier relationships more effectively. 5️⃣ Sales Trends: Are sales going up, down, or staying steady? With sales data on your dashboard, you can better plan for production and adjust your strategy if needed. With these metrics in one place, my client could quickly spot issues and opportunities. They had more control over their business, made smarter decisions, and improved both their cash flow and profitability 🚀. 👉 If you don’t have a financial dashboard yet, it’s time to get one. What key metrics do you track in your business? #FinancialDashboard #ManufacturingFinance #SmallBusinessTips #CFO #CashFlowManagement #BusinessGrowth #Profitability #OperationalExcellence #ManufacturingLeadership #DataDrivenDecisions

A lot of Fabrication businesses implement systems that don't enable you to track staff timesheets and inventory usage in real time. Even more don't do it at all. It might not seem like much, but even collecting that data at the end of the day, makes it a lot less accurate. Some time estimations are as high as 20% different by the end of the day. A lot of Fabrication businesses don't even track track their stock at all, believing that the effort to track it isn't worth the ROI. But let's do some numbers on a theoretical business. Let's say it's a 10 staff business, that spends about $1M a year on stock. Assuming timesheets are 90% accurate, have a charge out rate of $110, and the average staff member works 2000 hours a year, that 90% accuracy is leaving $220K on the table! Ouch! Assuming that your stock is 85% accurate on a $1M a year of purchasing, you're losing upto another 150k! That's 370K a year you're losing, because your systems don't support you to get the data properly and in real time. So if you (or your clients) aren't tracking both stock and time, you're bleeding money all over the factory floor. It's time to stem the flow!

Ever wondered how a simple 𝗪𝗵𝗮𝘁𝘀𝗔𝗽𝗽 𝗺𝗲𝘀𝘀𝗮𝗴𝗲 𝗿𝗲𝗾𝘂𝗲𝘀𝘁𝗶𝗻𝗴 𝗲𝘅𝘁𝗿𝗮 𝗺𝗮𝘁𝗲𝗿𝗶𝗮𝗹 can cost your PEB company thousands? 🤔 Let me share a real situation we see every day in steel manufacturing: 𝗪𝗶𝘁𝗵𝗼𝘂𝘁 𝗮 𝗽𝗿𝗼𝗽𝗲𝗿 𝘀𝘆𝘀𝘁𝗲𝗺: • Site engineer sends a quick WhatsApp message for extra material • Production team rushes to manufacture • Material gets dispatched (Sometimes overlooked) 𝗥𝗲𝘀𝘂𝗹𝘁? No cost tracking, forgotten transport mistake debits, and incorrect BOM data for future reference! But here's the game-changer: 𝗪𝗶𝘁𝗵 𝗮 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲𝗱 𝘀𝘆𝘀𝘁𝗲𝗺 like Smaac Steel ERP: • Every request goes through a Material Requisition Sheet (MRS) • Proper analysis and approval process • Costs are tracked and documented • BOM stays updated with all changes • Everything is traceable! ✨ The best part? Our clients report saving up to 15% on extra material costs just by implementing this simple workflow. While this introduces additional checks into the system, potentially extending the processing time for requests, it ultimately offers greater savings than the 1-2 hours you might save otherwise. Small changes, big impact! This is just one of the 500+ PEB-specific features we've built to make your steel fabrication and erection smoother.