Controlling (CO)

Controlling provides you with information for management decision-making. It facilitates coordination, monitoring and optimization of all processes in an organization. This involves recording both the consumption of production factors and the services provided by an organization.

As well as documenting actual events, the main task of controlling is planning. You can determine variances by comparing actual data with plan data. These variance calculations enable you to control business flows.

Income statements such as, contribution margin accounting, are used to control the cost efficiency of individual areas of an organization, as well as the entire organization.

Integration

Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system. The data flow between the two components takes place on a regular basis.

Therefore, all data relevant to cost flows automatically to Controlling from Financial Accounting. At the same time, the system assigns the costs and revenues to different CO account assignment objects, such as cost centers, business processes, projects or orders. The relevant accounts in Financial Accounting are managed in Controlling as cost elements or revenue elements. This enables you to compare and reconcile the values from Controlling and Financial Accounting.

Features

Cost Element Accounting (CO-OM-CEL)

Cost and Revenue Element Accounting provides you with an overview of the costs and revenues that occur in an organization. Most of the values are moved automatically from Financial Accounting to Controlling. Cost and Revenue Element Accounting only calculates costs which either do not have another expense or only one expense in Financial Accounting.

If needed, reconciliation of the values in Financial Accounting and Controlling takes place in Cost and Revenue Element Accounting.

For more information, see the SAP Library under  Financials Controlling Cost Element Accounting .

Cost Center Accounting (CO-OM-CCA)

You use Cost Center Accounting for controlling purposes within your organization. It is useful for a source-related assignment of overhead costs to the location in which they occurred.

For more information, see the SAP Library under  Financials Controlling Cost Center Accounting .

Activity-Based-Accounting (CO-OM-ABC)

Activity-Based Costing analyzes cross-departmental business processes. The goals of the whole organization and the optimization of business flows are prioritized.

For more information, see the SAP Library under  Financials Controlling Activity-Based Costing .

Internal Orders (CO-OM-OPA)

You use internal orders to collect and control according to the job that incurred them. You can assign budgets for these jobs, which the system monitors, to ensure that they are not exceeded.

For more information, see the SAP Library under  Financials Controlling Internal Orders .

Product Cost Controlling (CO-PC)

Product Cost Controlling calculates the costs that occur during manufacture of a product, or provision of a service. It enables you to calculate the minimum price at which a product can be profitably marketed.

For more information, see the SAP Library under  Financials Controlling Product Cost Controlling .

Profitability Analysis (CO-PA)

Profitability Analysis analyzes the profit or loss of an organization by individual market segments. The system allocates the corresponding costs to the revenues for each market segment.

Profitability Analysis provides a basis for decision-making, for example, for price determination, customer selection, conditioning, and for choosing the distribution channel.

For more information, see the SAP Library under  Financials Controlling Profitability Analysis .

Profit Center Accounting (EC-PCA)

Profit Center Accounting evaluates the profit or loss of individual, independent areas within an organization. These areas are responsible for their costs and revenues.

Profit Center Accounting is a statistical accounting component in the SAP system. This means that it takes place on a statistical basis at the same time as true accounting. In addition to costs and revenues, you can display key figures, such as, Return on investment, working capital or cash flow on a profit center.

For more information, see the SAP Library under  Financials EC-Enterprise Controlling EC-Profit Center Accounting .

Organization in Controlling

Use

Using the SAP system, you can define each of the organizational units in your organization from the perspective of an SAP application component.

In the Financial Accounting (FI) component, you can define the organizational units for accounting in theControlling (CO) component under controlling aspects.

The SAP system has direct links between internal and external accounting. This means that FI and CO organizational units are related.

Integration

You assign organizational units from the Financial Accounting component to the units in the Controlling component. This enables you to transfer postings relevant to cost accounting on to Controlling.

The following sections describe the organizational units in other components, which have cross-component relationships to units in Controlling. You cannot define these organizational units separately from one another.

 Note

Cross-component relationships exist between the following organizational units in internal and external accounting:

• Company code in the Financial Accounting component (FI)

• Business area in the Financial Accounting component (FI)

• Controlling area in the Controlling component (CO)

Company Code

Definition

The smallest organizational unit for which a complete self-contained set of accounts can be drawn up for external reporting. This involves recording all relevant transactions and generating all supporting documents for financial statements, such as balance sheets and profit and loss statements.

Use

You can set up more than one company code for each client . This enables you to manage the accounts for more than one independent company at the same time. However, you need to set up at least one company code.

A legally independent company is normally only represented by one company code in the SAP system. You can, however, also use a company code to represent an operation that is not independent according to trade law. This is required, for example, if this operation is in another country and must use the corresponding country currency and must meet the local tax requirements.

In financial accounting, business transactions are always entered on the company code level and processed further. The costs are also managed on the company code level. By using internal organizational structures, it is possible to divide this up even further. All company-specific specifications are made on the company code level.

See also:

Assigning Controlling Areas and Company Codes

Processing Controlling Areas

Use

You make the settings for the controlling area to show the structure of your organization from the Controlling aspect.

Prerequisites

Before creating a controlling area, you need to create the company codes and business areas (in FI) that are to be assigned.

For more information, see: Organizational Structure of Financial Accounting .

Process Flow

Define the controlling area and enter the basic data relevant to cost accounting.

1. In Customizing, choose Controlling → General Controlling → Organization → Maintain Controlling Area .
2. Activate each component in the controlling area (cost centers, order management, profitability analysis, and so on).
3. Store additional control information, such as, which currency the system should use to update the values, and whether it should display variances.
4. Assign one or more company codes to the controlling area.

See also: Assigning Controlling Areas and Company Codes

You can also activate individual components in the controlling area, using the IMG for each Controlling component.

Selecting and Displaying the Current Controlling Area

Prerequisites

When you call up the first business transaction in Controlling, you need to select a controlling area.

You cannot execute a transaction for more than one controlling area at the same time.

If you are working with multiple sessions, note that changing the controlling area setting in one session affects all other sessions. It is not possible to work with different controlling areas in different sessions.

Procedure

Enter the controlling area in the dialog box. The system saves your entry as a user parameter so that you do not need to enter the controlling area again.

If you mainly work in the same controlling area, you can store a default value as a user parameter:

Choose System → User Profile → User Parameters

Enter CAC as the parameter ID (for controlling area).

Enter the required controlling area as a parameter value in the dialog box.

Save your entries.

At the next system logon, the system automatically sets the specified controlling area.

You can display or change the current controlling area in any transaction in Controlling. Choose Extras → Set CO Area A dialog box appears displaying the current controlling area. You can overwrite it if you want.

Assigning Controlling Areas and Company Codes

The company code assignment to the controlling area must be made according to the processes your company has in logistics and accounting. The organizational environment is also very important. It is difficult or at best, time-consuming to change the 1:1 or 1:n relationsip between the controlling area and company code after the decision and the assignment have already been made.

The company code and controlling area organizational units can be combined in a number of ways. Using these combinations you can represent organizations with different structures.

• One Controlling Area is Assigned to One Company Code
  In this example, the financial accounting and cost accounting views of the organization are identical.
• Multiple Company Codes Assigned to One Controlling Area
  This example is Cross-Company Code Cost Accounting. Cost accounting is carried out in multiple company codes in one controlling area. All cost-accounting relevant data is collected in one controlling area and can be used for allocations and evaluations. In this case, the external and internal accounting perspectives differ from each other.
  For example, this method can be used if the organization contains a number of independent subsidiaries using global managerial accounting. Cross-company code cost accounting gives you the advantage of using internal allocations across company code boundaries.

 Note

If you assign more than one company code to one controlling area, then you need to note the following:

• You need to use a consistent chart of accounts
  You need to treat each cost element (in all company codes) in the same way (for example, as a primary cost element, or as an accrual cost element).
  In Financial Accounting, you can also use country-specific charts of accounts.
• The operative fiscal year variants in the company codes must match the fiscal year variants in the controlling area.
• You should execute period-end closing in Controlling for all company codes at the same time. Separate period-end closing for each company code would be too time-consuming.
  You can only execute period-end closing for a shared controlling area once closing is complete in Financial Accounting.
• If you wish to calculate plan prices automatically, you need to wait until planning is complete.
• The system only posts reconciliation postings across company codes without tax, which means that it cannot automatically create invoices.
  For tax reasons, cost flows (that are cross-company code) in Controlling can only be passed onto Financial Accounting if the company codes form an integrated company with sales tax.
• If you wish to prevent cross-company code postings in Controlling, then you need to create a detailed authorization concept.
• Retrospectively excluding a company code in another SAP system or client, requires more time and effort than in cost accounting by company code.
• If you only use one controlling area, you can only use one operating concern.
• You can only display profit center allocations in a controlling area.
• You can only use transfer prices within a controlling area.

You need to take the following into consideration when deciding on the controlling area – company code assignment:

• It is currently not possible to make CO allocations across controlling areas.
  However, if you then create a controlling area with more than one assigned company code so that you can use all the functions in Controlling, you may be causing a significant amount of extra work. Therefore, check to see if you really need a 1:n relationship and whether the extra work it would create is acceptable.

 Recommendation

SAP recommends a 1:n relationship between controlling area and company code for the following situations:

• Cross-company code transactions that MUST be processed in a controlling area, for example, production in an associate plant, special cases of intercompany processing.
• Cross-company code CO postings that can be displayed in the reconciliation ledger, such as assessments, capitalization of internal activity in Asset Accounting, activity allocation.
• Representation of group costing
• Use of Profit Center Accounting and transfer prices
• Multilevel Product Cost Management across company codes

 Recommendation

SAP recommends a 1:1 relationship between controlling area and company code for the following situations:

• Consolidated analysis of settled transactions across company codes in Profitability Analysis (CO-PA) In this situation, you assign more than one controlling area to an operating concern
• Representation of intercompany processes, whereby producing and delivering plant are the same.

Activities

1. To assign one or more company codes to a controlling area, go to the Implementation Guide (IMG) and choose  Controlling Organization Maintain Controlling Area .
2. To assign company codes to an existing controlling area, select a controlling area.
3. Choose Assign company code(s).
4. Choose New entries.
5. Enter the company code(s) that you want to assign to the selected controlling area.

 Note

The company code(s) must be fully maintained before you can assign them to a controlling area.

More Information

Example: Assigning Controlling Area and Company Code

Assignment of Controlling Areas and Plants

Use

Each plant is assigned uniquely to a company code. As a company code is always assigned uniquely to a controlling area, you can also easily derive the relationship from the controlling area and plant.

 Example

Business Area

Definition

An organizational unit in external accounting, which corresponds to a separate operational or responsibility area in the organization, and value flows recorded in Financial Accounting can be assigned to it.

Use

The business area should be treated as a separate economic unit, for which you can create an internal balance sheet and a profit and loss statement. The business area is, however, only an internal organizational unit and does not have any external impact.

You define business areas if you wish to create a balance sheet and a profit and loss statement for internal areas, in addition to company codes.

If you want to create business area balance sheets for internal reporting purposes, you must maintain the business area within Controlling as well. This means that when you create cost center master records you need to specify the business area. CO objects (such as, cost centers and internal orders) aid account assignment, as the business area can be derived from the master data records. When you post primary costs to a cost center, the system determines the business area automatically from the cost center master data. This enables the costs to be assigned to the correct business area. Therefore, you do not need to manually set the business area in the posting document, as the system does this, and thus reduces the number of incorrect assignments to a minimum.

Operating Concern

An operating concern represents an organizational unit in your company for which the sales market has a uniform structure. It is the valuation level for Profitability Analysis (CO-PA).

Structure

You structure an operating concern by selecting

• Characteristics
  You should ask yourself at what level your analyses should be performed, such as the sales organization, region, product, or customer level.
• and Value Fields (only in costingbased Profitability Analysis)
  You should ask yourself which values and key figures should be analyzed, such as revenues, sales deductions, costs, or quantities.
• as well as G/L accounts (only in accountbased Profitability Analysis)

This structure may vary greatly from one company to the next. For example, the structure of total production costs in a manufacturing company differs from that in a wholesale or retail company. Consequently, you need to "model" COPA in Customizing by defining the characteristics and value fields that you want to analyze.

The system then generates the necessary Database Tables for CO-PA Transaction Data and access programs based on how you defined your operating concern.

See also:

For information on the procedure for defining an operating concern, choose Structures, then Define Operating Concern in Customizing.

Characteristics for Profitability Segments

All the characteristics in the operating concern are used in the line item. However, you can restrict the characteristics for a profitability segment that forms the basis for valuation. This is because it is unnecessary and impractical for a profitability segment to use characteristics that are almost always populated and each has a different value. You should deactivate such characteristics when creating a profitability segment. Otherwise the data volume of the profitability segments is too large and hampers system performance.

One characteristic that should not be used in profitability segments is the sales order in repetitive manufacturing.

You specify in Customizing which characteristics are to belong in which profitability segments. For more information about this function, see Customizing for Profitability Analysis under  Structures Define Profitability Segments Characteristics (Segment-Lvl Characteristics) .

Profit Center

Definition

A profit center is an organizational unit in accounting that reflects a management-oriented structure of the organization for the purpose of internal control.

You can analyze operating results for profit centers using either the cost-of-sales or the period accounting approach.

By calculating the fixed capital as well, you can use your profit centers as investment centers.

Use

Profit Center Accounting at the profit center level is based on costs and revenues. These are assigned statistically by multiple parallel updating to all logistical activities and other allocations of relevance for a profit center.

The exchange of goods and services between profit centers can be valuated using the same valuation approach as in financial accounting or another approach (see Multiple Valuation Approaches/Transfer Prices ).

Structure

The master data of a profit center includes the name of the profit center, the controlling area it is assigned to, and the profit center’s period of validity, as well as information about the person responsible for the profit center, the profit center’s assignment to a node of the standard hierarchy, and data required for communication (address, telephone number and so on).

Every profit center is assigned to the controlling area organizational unit. This assignment is necessary because Profit Center Accounting displays values in G/L accounts.

The system transfers all the data to Profit Center Accounting together with the G/L account to which the data was originally posted. You can only aggregate data that shares the following:

• Same chart of accounts
• Same fiscal year variant
• Same currency

Time-Based Master Data

Like cost centers, profit centers are valid for a specific time period. This has the following advantages:

• No complicated activities are necessary when a new fiscal year begins.
• You can enter future changes to the master data in advance.

Profit centers are time‑dependent in two ways:

• First, you can enter a period during which actual or plan data can be posted to the profit center.
• Second, you can define time-based fields when you customize Profit Center Accounting.

Time-based fields let you change information in the profit center master record, such as the person responsible for the profit center, at a specific point in time without having to create a new profit center and without losing any information about the previous person responsible.

Integration

Enterprise Organization

If you are using the enterprise organization, both profit centers and cost centers form part of it. For more information, see Enterprise Organization .

 Note

You can only use the enterprise organization to portray relatively small hierarchies. Trying to portray a larger hierarchy in the enterprise organization can lead to performance issues.

The Standard Hierarchy

To ensure that your data in Profit center Accounting is consistent with that in other areas, you must assign each profit center to the Standard Hierarchy .

The standard hierarchy is used in the information system, allocations, and various planning functions. You can also assign your profit centers to alternative hierarchical structures, called Profit Center Groups .

Copying Cost Centers

If the profit centers in your organization are closely linked to your cost centers, you can simply copy your cost center master data to create your profit centers. For more information on this function, see the Implementation Guide (IMG) for Profit Center Accounting, under Master Data .

Plant

Definition

An organizational unit serving to subdivide an enterprise according to production, procurement, maintenance, and materials planning aspects. It is a place where either materials are produced or goods and services provided.

Use

The preferred shipping point for a plant is defined as the default shipping point, which depends on the shipping condition and the loading condition.

For the placement of materials in storage (stock put-away), a storage location is assigned to a plant. The storage location depends on the storage condition and the placement situation.

The business area that is responsible for a plant is determined as a function of the division. As a rule, a valuation area corresponds to a plant.

Structure

A plant can assume a variety of roles:

• As a maintenance plant, it includes the maintenance objects that are spatially located within this plant. The maintenance tasks that are to be performed are specified within a maintenance planning plant.

• As a retail or wholesale site, it makes merchandise available for distribution and sale.

A plant can be subdivided into storage locations, allowing stocks of materials to be broken down according to predefined criteria (for example, location and materials planning aspects).

A plant can be subdivided into locations and operational areas. Subdivision into locations takes geographical criteria into account, whereas subdivision into operational areas reflects responsibilities for maintenance.

Integration

All data that is valid for a particular plant, as well as for the storage locations belonging to it, is stored at plant level. This includes, for example, MRP data and forecast data.

Currencies

Definition

Legal means of payment in a country.

Use

In external accounting, you assign a company code currency to each company code. You can also specify one or two parallel currencies for a company code, which are recorded in the external accounting documents. Examples of parallel currencies are currencies from other organizational units ( group currency, hard currency, global company currencyor index-based currency).

When you create a controlling area, you specify whether the controlling area currencymay differ from the company code currency, and which particular currency is to be the controlling area currency.

You can use the company code currency or the currency of a different organizational unit recorded as a parallel currency in the company code. You can also use a separate controlling area currency not dependent on the company code currency.

Cross-company code cost accounting can therefore be performed for company codes that use values recorded in different currencies. SAP recommends that you specify a consistent parallel currency for the company codes, and use this as the controlling area currency. In this case, postings in Controlling are made that are relevant for Accounting.

See also:

Defining Currencies

Number Range

Definition

Area in which numbers are assigned that refer to business objects of the same type. Examples of objects:

• Business partners
• G/L accounts
• Orders
• Posting documents
• Materials

One or more number range intervals are specified for each number range, as well as the type of number assignment.

There are two types of number assignment:

• Internal
  When saving a data record, the SAP system assigns a sequential number that lies within the corresponding number range interval.
• External
  When saving a data record, either the user or an external system assigns a number. The number must lie within the corresponding number range interval.
   Note

  You maintain number ranges  in Customizing for Controlling under GeneralControlling Organization Maintain Number Ranges for Controlling Documents  .

Use

The system generates a document number for each business transaction. Business transactions are classified according to CO transactions.

 Example

The business transaction Direct Internal Activity Allocation belongs to the Controlling transaction Actual Activity Allocation .

This means that you must assign each transaction to a number range interval. It is also possible to define multiple business transactions in one number range interval.

The Controlling component provides a large number of transactions for each controlling area.

Business Transactions in Controlling

Use

Each component in Controlling uses specific business transactions . When activating a CO component (you can do this successively), you must make sure that all business transactions used by the component have been assigned to number ranges. Otherwise you will not be able to call up the business transactions in the System.

The OKC1 transaction enables you to display all CO business transactions.

 Note

You define number ranges for each controlling area. The sample client 000 contains defaults for number ranges.

You combine transactions into transaction groups .

Create the plan and actual transactions in separate transaction groups (see also: Defining Number Ranges ).

Features

Business transactions, planning

The business transactions for planning are split up as follows:

Period-Based

Business transaction	Name
CPPP	ABC Process Assessment: Plan
FIPA	Automatic Payment Schedule
JVPL	JV Planning Data Document
KAZP	Plan Cost Center Accrual
KOAP	Plan Settlement
KPPB	Standard Cost Estimate
KSP0	Plan Splitting
KSPB	Plan assessment to PA
KZPP	Plan: Periodic overhead
KZRP	Plan Interest Calculation
PAPL	Plan Sales/Profit
RKPB	Plan Periodic Reposting
RKPL	Plan Indirect Activity Allocation
RKPP	Primary Planning with Template
RKPQ	Manual Cost Planning
RKPS	Secondary Planning with Template
RKPU	Plan Overhead Cost Assessment
RKPV	Plan Overhead Cost Distribution

Business Transaction-Based

RKP1	Planning Primary Costs
RKP2	Planning Activities
RKP3	Plan Secondary Costs
RKP4	Planning Statistical Key Figures
RKP5	Planning Revenue Elements
RKP6	Planning Activity-Dependent Primary Costs
RKP7	Planning Activity-Dependent Secondary Costs
RKP8	Planning Settlement Costs
RKP9	Planning Activity-Dependent Settlement Costs
RKPW		Secondary order cost planning
RKPX		Activity-dependent secondary order cost planning
RKPZ		Planning overhead credits

Business transactions, actual postings

The business transactions for actual postings can be classified as follows:

Period-Based Transactions

Business transaction	Name
COIN	CO through-posting from Financial Accounting
CPPA	ABC Actual Process Assessment
JVIU	JV Actual assessment
JVIV	JV Actual Distribution
JVU1	JV Reposting Costs
KAMV	Manual Cost Allocation
KAZI	Actual Cost Center Accrual
KAZO	Down payments
KGPD	Distribution according to peg
KOAO	Actual Settlement
KPIV	Actual Distribution to Cost Objects
KSI0	Actual Split Costs
KSII	Actual Price Calculation
KSOP	Primary Target Cost Calculation
KSPA	Assessment to CO-PA
KVAR	Variance Calculation
KZPI	Actual Periodic Overhead
KZRI	Actual Interest Calculation
RKIB	Actual Periodic Reposting
RKIL	Actual Indirect Activity Allocation
RKIU	Actual Overhead Assessment
RKIV	Actual Overhead Distribution
RRIB	Segment Adjustment: Actual Periodic Reposting
RRIU	Segment Adjustment: Actual Assessment
RRIV	Segment Adjustment: Actual Distribution

Business Transaction-Based

RKU1	Repost Costs
RKU2	Repost Revenues
RKU3	Repost CO Line Items
RKL	Actual Activity Allocation
RKN	Actual Non-Allocable Activities
RKLT	Actual Process Allocation
RKLX	Predistribution of Fixed Costs
RKS	Enter Statistical Key Figures

Other Business Transactions

The remaining business transactions cannot be classified as plan or actual transactions:

Other Business Transactions

Business transaction	Name
KABG	Automatic Accrual Calculation
KABM	Manual Accrual Calculation
KAFM	Payment Data
KAUS	Calculate Scrap
KEKB	Unit Costing
KEKZ	Unit Costing (Overhead)
KFPI	Fixed Price Allocation
KFPP	Fixed Price Agreement
KPPZ	Standard Costing (Overhead)
KSOS	Secondary Target Cost Calculation
KSWP	Primary Target Cost Calculation (WIP)
KSWS	Secondary Target Cost Calculation (WIP)

Related Content

Chart of Accounts

Definition

An organizational structure, defined using accounting principles, that records values and value flows for orderly account management.

Use

The operational chart of accounts is used by financial accounting and cost accounting. The items in a chart of accounts can be expense or revenue accounts in FI and cost or revenue elements in cost accounting.

Integration

You need to assign each company code to a chart of accounts.

In addition, you may assign each company code to a country-specific chart of accounts . The chart of accounts and country-specific chart of accounts are linked using alternating account numbers.

The accounts from internal and external accounting are managed in an integrated accounting system . Therefore, when creating a controlling area , the charts of accounts used by the corresponding company code must be respected.

The controlling area adopts the chart of accounts belonging to the company code assigned. In cross-company code cost accounting the controlling area and all company codes assigned to it must use the same chart of accounts.

Nevertheless, you can also use a country-specific chart of accounts to apply the country-specific accounting requirements while using consistent cost accounting.

 Example

You assign a company code to the controlling area. The company code uses the INT chart of accounts (International Chart of Accounts). The controlling area also uses the INT chart of accounts.

 ( )

Your organization has subsidiaries in France and Italy which produce balance sheets in different company codes. Uniform managerial accounting is to be performed for the entire enterprise.

In order to comply with the accounting regulations of each country, the company codes are assigned to different country charts of accounts.

In addition, you also define a uniform worldwide chart of accounts for internal accounting to which you assign the company codes and the controlling area.

For more information on the chart of accounts, see the SAP Library under  FI Financial Accounting G/L Accounting General Ledger Account Master Data Chart of Accounts List  .

Fiscal Year Variant

Definition

The fiscal year variant contains the number of posting periods in the fiscal year and the number of special periods.

You can define a maximum of 16 posting periods for each fiscal year in the Controlling component (CO).To define the fiscal year variant, go into Customizing for Financial Accounting (FI) under  Financial Accounting Global Settings Fiscal Year Maintain Fiscal Year Variant  .

Integration

You need to specify the fiscal year variant for each company code.

When you create a controlling area, you also need to specify the fiscal year variant. The fiscal year variants of the company code and controlling area may only differ in the number of special periods used. You need to ensure that the fiscal year variants match, in other words, they may not have a time conflict.

 Example

You can assign a company code using a fiscal year variant with 12 posting periods and four special periods to a controlling area that has a fiscal year variant with 12 posting periods and one special period. The time frame, for example, from April 1 to March 31 in the following year, must be identical in each fiscal year variant.

However, it cannot be assigned to a controlling area with 52 posting periods for example.

For more information on fiscal year variants, see the SAP Library under  AC Financials FI Financial Accounting General Ledger Accounting FI - Closing and Reporting Fiscal Year. 

Authorizations for CO-OM Areas of Responsibility

In Cost Center Accounting and internal orders, you can issue authorizations not only for individual cost centers but also for CO-OM responsibility areas.

A CO-OM area of responsibility consists of one or more cost centers, or one or more nodes of the standard hierarchy for Cost Center Accounting.

If you issue authorization for a node in the standard hierarchy for Cost Center Accounting, this authorization is valid for all lower-level nodes and cost centers. You do not need to issue separate authorizations for nodes and individual cost centers.

If you issue authorization for nodes of alternative cost center hierarchies, this authorization is valid only for the name of the node. For example, you can use this authorization in a summarization report to display totals for all cost centers beneath the node.

The authorization concept enables you to easily issue detailed and general authorizations.

Enhancements for Internal Orders:

A CO-OM area of responsibility can also be represented by one or more internal orders. The orders are assigned to the standard hierarchy for Cost Center Accounting using the responsible cost center. If you issue authorization for one node of the standard hierarchy for Cost Center Accounting, this is also valid for all the orders assigned to the given cost center.

Where orders do not have a responsible cost center, the CO-OM responsibility area only consists of the order itself. No other CO-OM responsibility area can be assigned at a level above this responsibility area.

Features

For a CO-OM area of responsibility, you can issue authorizations for maintaining cost center master data, manual cost center planning, and for cost center reports.

For example, you can authorize the person responsible for a cost center to plan cost centers in their CO-OM area of responsibility, or to display reports for these cost centers.

 Note

You cannot issue authorizations for one CO-OM responsibility area for allocations in planning and for actual postings.

Activities

The authorization check determines whether the user is authorized to execute the given action for the cost center, or for the nodes in the standard hierarchy for Cost Center Accounting. If this authorization is missing, the system checks the authorizations within the standard hierarchy for each of the higher-level nodes. If such a node is found, the user has authorization for all of the lower-level nodes and cost centers. If no such node is found up to the top node of the hierarchy, the user cannot carry out the action.

For other hierarchies, only the authorization for the node itself is checked. If this authorization is missing, the user cannot carry out the activity.

Enhancements for Internal Orders:

For internal orders, the system first checks whether the user is authorized to execute the action for the order.

If this authorization is missing, no additional checks are made for orders without a responsible cost center. For orders with a responsible cost center, the system checks for authorization for the CO-OM responsibility area of the responsible cost center. If this authorization is missing, the system continues to check within the standard hierarchy for Cost Center Accounting, but using the authorization objects for internal orders.

More Information

General Authorization Objects for Cost Center Accounting

General Authorization Objects for Internal Orders

Authorizations for Hierarchy Areas in Activity-Based Costing

Use

In the Activity-Based Costing component (CO-OM-ABC), you can issue authorizationsfor hierarchy levelsas well as for individual business processes.

A hierarchy area comprises one or more business processes, or one or more nodes of the standard hierarchy for Activity-Based Costing.

If you issue authorization for a node in the ABC standard hierarchy, this authorization applies to all the nodes and business processes below this node. You do not need to issue separate authorization for nodes and individual business processes.

The authorization concept enables you to easily issue detailed and general authorizations.

 Note

You can only issue authorizations for standard hierarchy nodes in Activity-Based Costing, not for nodes of other cost center hierarchies.

Features

For each hierarchy area you can issue authorizations for maintaining business process master data, manual business process planning, maintaining templates and displaying change documents.

For example, you can issue the person responsible for a business process with the authorization to plan business processes in their CO-OM area of responsibility, or to display change documents using these business processes.

 Example

You cannot issue authorizations for one CO-OM responsibility area for allocations in planning and for actual postings.

Activities

The authorization check determines whether the user is authorized to execute the given action for the business process or node in the standard hierarchy for Activity-Based Costing. If this authorization is missing, the system checks the authorizations within the standard hierarchy for each of the higher-level nodes. If such a node is found, the user has authorization for all of the lower-level nodes and business processes. If no such node is found up to the top node of the hierarchy, the user cannot carry out the action.

See also:

General Authorization Objects for Business Processes

Enterprise Organization (CO)

Purpose

The enterprise organization is a uniform, integrated user interface for the different organizational units in the SAP system.

The structure of your enterprise is represented in the SAP system by means of different organizational units (controlling area, company code, cost center and so on). In the Human Resources (HR) organizational structure for example, a company is broken down into departments, each of which is responsible for performing particular tasks. By way of contrast, in the standard hierarchy for cost center accounting, companies are broken down with regard to responsibilities for costs.

The enterprise organization helps you process your organizational structures so that:

• These structures can be changed to reflect organizational changes within the enterprise.
• A company's organizational structure is more transparent since the links between the organizational units are visible and can be evaluated.
• The different business processes can be integrated optimally, and thus are more economical with resources.
• The data is for internal and external reporting

Implementation Considerations

You need to activate the enterprise organization to be able to use it. You do this in Customizing for the application component in question by choosing  Enterprise Organization Enter Settings for the Enterprise Organization. 

Integration

Enterprise organization is based on the organizational plan in HR, and contains additional functions and organizational units specific to accounting.

The following areas are currently integrated in enterprise organization:

• HR organizational plan
• Cost center standard hierarchy
• Profit center standard hierarchy
   Note

  If the enterprise organization is active for a controlling area, you can no longer assign the organizational units (controlling area, company code, and cost center) in the HR organizational structure. Instead, use the functions in the enterprise organization.

Enterprise organization therefore provides an overview of the enterprise in terms of responsibilities for:

• Personnel
• Costs
• Revenues

Features

Representing the structure of an enterprise

• The structure of an enterprise is displayed in a simple tree structure.
• You can change the enterprise organization per specific date.
  This facility enables you to create past, present, and future organizational structures for your enterprise (see also Time-Dependency of Enterprise Organizations ).
• The single maintenance screen for several organizational units or structures enables you to display and evaluate the links between the organizational units.
• Using the search function, you select the organizational units and then assign these to the organizational structure using drag-and-drop (see Searching for Organizational Units ).

Processing organizational structures

• In the enterprise organization, you can create new organizational units (see Creating Organizational Units ).
  In so doing, the system transfers the data in accordance with the inheritance principle (see the Inheritance Principle ).
• Using drag and drop, you can copy organizational units from the selection area into the tree structure (seeAssigning, Reassigning, or Moving Organizational Units ).
• Using drag and drop, you can copy organizational units from the selection area into the tree structure (seeAssigning, Reassigning, or Moving Organizational Units ).
• You can maintain the master data for the individual objects directly from the tree structure (see Displaying or Changing Organizational Units ).
• You can activate or delete inactive master record versions from cost centers and profit centers (see:Activating Inactive Master Data or Deleting Inactive Master Data ).
• Enterprise organization is a logical development of the HR organizational plan.
  An enterprise structure is more detailed in HR than in CO. Therefore all CO objects (such as controlling area, cost center) are assigned to the HR-Organizational Unit.
   Note

  Note, however, that you can only assign one object type to a single HR organizational unit each time you are processing.
• When processing the enterprise organization, the system carries out a number of checks on consistency.
  For example, you can enter a cost center in the enterprise organization only if you have already assigned a controlling area to this enterprise organization.
   Note

  You can make checks on a particular key date. To do so, choose  Enterprise organization Check . You can make the following checks online or in a background job.
  • Check that the enterprise organization is complete (see Time-Dependency of Enterprise Organizations).
  • Consistency checks
• From the enterprise organization you go to the web form to request a cost center change by choosing Extras-> Change request for cost centers (see Requesting a Change to Master Data in the Intranet/Internet ).
  Data from the detail area is also transferred to the form.

Constraints

From the enterprise organization you can only currently display master data for controlling areas and company codes.

Making mass changes to master data simultaneously as under Change Management is currently not possible.

For more information, see the SAP Library under  Human Resources PA -Personnel Management Organizational Management. 

Account Assignment of Controlling Objects

For postings in external accounting that use a cost element as the account, you need to use a special account assignment logic. This enables the system to ensure that data is reconcilable with all the relevant application components. These rules for the account assignment logic always apply for postings in internal accounting (Controlling).

Account assignment distinguishes between true and statistical Controlling objects.

True Controlling Objects

• Cost centers (for account assignment of costs)
• Orders (true)
• Projects (true)
• Networks
• Make-to-order sales orders
• Cost objects
• Profitability segments
• Real estate objects
• Business processes
  You can use true Controlling objects as senders or receivers.

Statistical Controlling Objects

• Cost centers (for account assignment of revenues)
• Cost centers, if a true account assignment object already exists
• Statistical Internal Orders
• Statistical projects
• Profit centers
   Note

  You can indicate internal orders and projects in each master record as statistical.

  You can also specify Statistical Controlling objects as account assignment objects in addition to true Controlling objects. You cannot allocate costs on statistical Controlling objects to other objects. Account assignments are for information purposes only. You can make statistical assignments to any number of Controlling objects.

Features

Note the following rules for account assignments:

• You need to specify a true Controlling object in each posting item.
  You cannot assign to a objects such as a statistical project without specifying a true Controlling object.
• In each posting item, you can specify up to three statistical Controlling objects in addition to the true Controlling object.
  For example, you can post costs to a cost center and also to a statistical order and a statistical project.
• You cannot assign costs to more than Controlling object of the same type in one posting item.
  For example, you cannot post to both a true order and a true project.
   Note

  The only exception to this is that you can assign to a cost center and one other true Controlling object. In this case, the posting is true for the additional Controlling object and statistical for the cost center.
• You cannot specify the same Controlling object as being true and statistical in the same posting item.
  You cannot post to an order and a statistical order in the same posting item.
• You can only make postings to profit centers in addition to true Controlling objects.
  This means that costs and revenues are only posted statistically to profit centers. Profit centers are derived from true Controlling objects.
  When you enter a profit center, it must match the profit center that is assigned from the Controlling object.
• You need to create P&L accounts as a cost element if you wish to post to them and a Controlling object.
• You can make true revenue postings to the following:
  • A profitability segment
  • A make-to-order sales order
  • A project with revenues
  • An order with revenues
  • A real estate object
• You can only post revenues statistically to cost centers and profit centers.
  If you specify a cost center or a profit center for a revenue posting, the system treats the object as a statistical Controlling object. This means that you must also specify a true Controlling object to which the revenues are posted.
  The system can automatically derive such an object if account-based profitability analysis is not active. The system logs the posting under the object type reconciliation object. The reconciliation object is a summarized profitability segment with the characteristics company code, business area, plant, and profit center.
  The system also updates a reconciliation object by cost element for postings to a profitability segment with costing-based profitability analysis.
  The system does not post to reconciliation objects if you specify an additional Controlling object on which true revenue postings can be made.
   Note

  If you use account-based profitability analysis, you cannot assign revenue postings only to cost centers or profit centers. In this case, you need to save a fixed account assignment for each revenue type during automatic account assignment. For more information, see the Implementation Guide (IMG) under  Controlling Cost Center Accounting Actual Postings Manual Actual Postings Maintain Automatic Account Assignment. 

  Examples: Account Assignment Logic

  
  

  The following examples illustrate the account assignment logic for Controlling objects:

  

  1. You enter costs of 100 USD for statistical order 40010. The order also stores the posting to cost center 2330. Cost center 2330 is assigned to profit center P100.
     Because this is a statistical order, the cost center is the true account assignment object for this posting. The system also posts the costs statistically to the order and to the profit center.
  2. The system records costs of 100 USD on cost center 2330 and on the order 40020. Cost center 2330 is assigned to profit center P100.
     Orders and cost centers are true Controlling objects. The system therefore posts the costs as true costs to the order and as statistical costs to the cost center. In addition, the system posts the costs statistically to the profit center.
  3. You enter revenues of 200 USD on cost center 2330. Cost center 2330 is assigned to profit center P100.
     As you cannot make true revenue postings to a cost center, the SAP system derives a summarized reconciliation object as the true account assignment object. The system also makes a statistical posting of the costs to the cost center, and to the profit center.

Commitments Management (CO)

Purpose

CO Commitments Management enables you to enter and analyze commitments at an early stage, and thus to account for them in controlling.

Implementation Considerations

Purchase orders or purchase requisitions lead to financial commitments with varying degrees of obligation (See also : Commitments Management Flow ) . Commitments reserve funds for costs that will be incurred at a future date. Therefore, commitments must be included in funds monitoring.

For more information on funds commitment, see  SAP Library  under Financials Controlling Internal Orders Funds Commitment (Cost Centers, Internal Orders, Projects)  .

Integration

In Commitments Management, data from the following SAP components is processed integrally:

• Controlling (CO)
  In Controlling you can perform tasks such as planning, checking and controlling costs. Commitments management is a part of the cost monitoring process. Commitments are displayed either on internal orders, cost centers, or projects.

• Materials Management (MM)
  This covers tasks such as material requirements planning, purchasing, goods receipt, inventory management, and invoice verification. Commitments are created through purchase requisitions and purchase orders. Commitments are reduced by various business transactions such goods receipt. The commitments data is transferred to Controlling.

Features

• Creation of Commitments

For example, specific goods are ordered for an internal order, a cost center, or a project. A purchase order commitment is created that is equivalent to the purchase order value.

• Commitments Display

Commitments are always displayed with a value and, if required, a quantity for the cost element, the fiscal year, and the period when the costs are expected to be incurred (See also: Commitments Information System ).

• Commitments Currency

The system executes all commitments in the currency used, in the original business transaction (for example in the ordering transaction). It then translates the amount into the controlling area currency, company code currency and the object currency. The PO currency exchange rate is used for currency translation.

• Reducing the Commitment:

The commitment is reduced by business transactions (such as goods receipts) and actual costs are incurred by the corresponding account assignment object. This continues until, for example, the business transaction "Purchase order" is closed and the purchase order commitment is reduced to zero.

• Carrying Forward Commitments at Year-End-Closing

At year-end closing, you can carry the open commitment values from purchase requisitions, purchase orders and fund commitments forward to the first period of the next fiscal year. You can select by account assignment object (order, cost center or project). You can also process individual documents if required.

Commitments are carried forward for each controlling area.

Activate Commitments Management

You activate commitments management:

• For each controlling area from a chosen fiscal year

• For orders per order type

• For cost centers per cost center type

 Note

If Commitments Management is activated in the controlling area, then it is automatically activated at the same time for projects.

Activating Commitments Management for Controlling Area

1. In Customizing under	Choose the following:
   Controlling  Cost Center Accounting Commitments and Funds Commitments	Activate Commitments Management .
   Controlling  Internal Orders  Commitments and Funds Commitments	Activate Commitments Management .
   Project System  Costs	Activate Project Management in Controlling Area

2. Activate Commitments Management and save your entries.

Activating Commitments Management for Order Types

1. In Customizing, chose  Controlling Internal Orders Define Order Types . 
2. Activate Commitments Management and save your entries.

Activate Commitments Management for Cost Center Types (Default Value for Cost Centers)

1. In Customizing, choose  Controlling Cost Center Accounting Master Data Cost Centers Maintain Cost Center Types  .
2. In the cost center category that you want to activate commitments management for, deselect the commitments-lock indicator. Save your entries.
   You activated commitments management for the selected cost element. The setting is used as a default value for cost centers that are to be created. You can change the setting if required.

Activating Commitments Management for Cost Centers

1. Choose  Financials Controlling Cost Center Accounting Master data Cost center Individual processing Create/Change. 
2. Choose Master data.
3. Choose Control
4. If you require the system to update commitments to the cost center, do not select the Commitments updatelock indicator

Commitments Management Flow

Purpose

The SAP Purchasing component (MM-PUR) is responsible for the external procurement of materials and services. The system displays the different types of business transaction in Purchasing (on the cost side) on the account assignment objects (such as internal order, cost center). It does this using various commitment categories.

Prerequisites

You must activate Commitments Management before you can use it.

For more information, see Activating Commitment Management .

Process flow

1. The system uses purchase requisitions to create purchase requisition commitments.
   For more information, see How Purchase Requisition Commitments Are Created .
2. A purchase order is created from purchase requisitions. This is a result of quotation processing and requests for quotations (RFQs) in purchasing. On the commitment side, purchase order commitments are created from purchase orders. Purchase order commitments reduce each purchase requisition commitment by referencing to a purchase requisition.
   For more information, see How Purchase Order Commitments Are Created .
3. Purchase order commitments are reduced according to the goods / invoice receipt logic .For more information, see Reducing Purchase Order Commitments to Zero

See also: Example: Individual Purchase Order on an Internal Order .

The example shows

• How a purchase order commitment is created by a purchase order

• How the purchase order commitment is reduced

• How the data is displayed on the account assignment object

Commitments Information System

Depending on the account assignment object used, you can display commitments using the information system for Internal Orders, Cost Center Accounting, or for Project Systems.

Further information on the information system	is available in the SAP Library under..
Cost Center Accounting	Financials  Controlling  Cost Center Accounting Information System
Internal Orders	Financials  Controlling  Internal Orders Information System for Internal Orders
Projects	Financials  Project System Project Information System

You can display the commitment values for a specific controlling area at three different levels of detail. You can either call these up directly, or branch to one after the other:

Calling Up Total Cost Reports

Calling Up Cost Element Reports

Calling Up Line Item Reports

Overhead Cost Controlling (CO-OM)

Purpose

Overhead Cost Controlling component enables you to plan, allocate, control, and monitor overhead costs. It is an important preparation for a strong profitability analysis, as well as for a precise product costing.

By planning in the overhead area, you can specify standards that enable you to control costs and evaluate internal activities.

All overhead costs are assigned to the cost centers where they were incurred, or to the jobs that triggered them. The SAP system provides numerous methods for overhead allocation. Using these methods you can allocate the overhead costs true to their origins. Some of the overhead can be assigned to cost objects with minimum effort, and converted to direct costs.

At the end of a posting period, when all allocations have been made, the plan (target) costs are compared with the corresponding actual costs, based on the operating rate. You can make a source-based analysis of the resulting target/actual variances, and use the analyses for further managerial accounting measures within Controlling.

Along with timesaving automatic allocations, the integration of Overhead Cost Controlling in the SAP system environment minimizes entry of actual data and reduces the work involved in planning.

Features

Overhead Cost Controlling is divided into the following areas.

Cost Element Accounting

Cost and Revenue Element Accounting details which costs and revenues have been incurred. Accrual is calculated here for valuation differences and additional costs. Cost Accounting and Financial Accounting are also reconciled in Cost Element Accounting. This means that the tasks of Cost and Revenue Element Accounting stretch beyond the bounds of Overhead Cost Controlling.

Cost Center Accounting

Cost Center Accounting determines where costs are incurred in the organization. To achieve this aim, costs are assigned to the subareas of the organization where they have the most influence.

By creating and assigning cost elements to cost centers, you not only make cost controlling possible, but also provide data for other application components in Controlling, such as Cost Object Controlling. You can also use a variety of allocation methods for allocating the collected costs of the given cost center/s to other controlling objects.

Internal orders

Overhead Orders are internal orders used either to monitor overhead costs for a limited period, or overhead incurred by executing a job, or for the long-term monitoring of specific parts of the overhead. Independently of the cost center structure, internal orders collect the plan and actual costs incurred, enabling you to control the costs continuously. You can also use internal orders to control a cost center in more detail. You can assign budgets to jobs. These budgets are then monitored automatically by the SAP system to ensure that they are kept to.

Activity-Based Costing

In contrast to the responsibility and function-oriented basis of Cost Center Accounting, Activity-Based Costing provides a transaction-based and cross-functional approach for activity output in which several cost centers are involved. The emphasis is not on cost optimization in individual departments, but the entire organization.

By allocating process quantities based on cost drivers, rather than using overhead calculation, cost allocation along the value chain is more source-based. Activity-Based Costing enables you to cost products more accurately in the overhead areas.

Overhead Costs

Definition

Costs that cannot be assigned directly to cost objects are overhead costs , and are divided into direct and indirect overhead costs. It is possible to assign indirect overhead costs to cost objects, but would be too time-consuming.

Use

The percentage of overhead costs in total costs has risen sharply in recent years. The number of workers employed in overhead cost areas grew from 25-30% in the 1950’s to more than 50% today. Not only have overhead costs increased in service organizations, which treat most of their costs as overhead, but also in manufacturing. A survey in the United States showed that there was approximately 80% overhead costs in the machine and electronics manufacturing industries. In the manufacturing industry, increases in overhead cost often caused by a structural change in the organizational value-added structures, which normally changes the organizational cost matrix. Therefore, the increased use of automation results in a rise in overhead cost, with a negative effect on directly assignable production costs. Overhead cost has increased because organizations cannot assign the cost of administrative and planning activities to products as accurately as the manual activities. Even reducing production depth can change direct costs to overhead costs because of the greater number of external procurements.

Overhead costs from planning, management, quality control, and coordination in such areas as research and development, procurement, and work preparation are increasingly important compared with actual product manufacture. Managers can gain a high degree of cost transparency for activity output using theoretical cost accounting methods, and possibilities for reducing cost are used extensively. However, the connection between overhead cost areas is often unclear and the optimization options unrealized.

Cost Accounting Methods

Use

The Controlling component (CO) supports all standard cost accounting methods. You do not need to implement the different methods individually. Depending on your organization’s requirements, you can use more than one method at a time in cost accounting.

Features

The SAP system provides all the functions necessary for planning and allocation using the different methods. The functions record fixed and proportional costs related to all levels of activity output separately. Implementing the CO component does not limit you to using one cost accounting method. Instead, you can decide which method to use in each area of your organization, depending on the way you plan and the functions you choose to use.

In the Overhead Cost Controlling area, you can use the following, widely used cost accounting methods within the SAP system:

• Cost Assessment Method

Cost assessment is plan/actual cost accounting based on full costs. Costs are not split into fixed and proportional costs. The system uses assessment to "allocate" overhead, based on certain keys, to cost collectors, or to products.

• Overhead Calculation

Overhead calculation is similar to the cost assessment method (standard and actual costing using full costs). Costs are not split into fixed and proportional costs. The system only calculates wage costs using the fixed hourly rates determined in cost center planning. This is to valuate the activity quantity structure of the work plan. The SAP system then applies remaining overhead costs to cost collectors or products, using overhead calculation

• Static Standard Costing

In contrast to the above methods, standard costing divides the cost center structure into tracing factors and activity types, and activity is allocated. Costs are not split into fixed and proportional costs. In the costing, the system uses the (total) cost portions that it calculated to evaluate the activity quantity structure from the work plan.

In the Profitability Analysis component (CO-PC), you can use production costs calculated in Product Costing for valuating products sold on the basis of full costs (according to the cost-of-sales accounting method).

• Marginal costing

In contrast to static standard costing, this method splits costs into fixed and proportional costs (based on the cost center structure divided up into activity types). The planned cost rates (determined by price calculation) are included in the costing to valuate the activity quantity structure from the work plan. Analytical cost planning, and the proportional costs it calculates, enable better decision-making. By using marginal costs, for example, you can determine short-term, lower limit prices.

In product cost planning, you can determine whether full or only variable costs are relevant for stock valuation when you specify characteristics for cost elements. You can use the latter to determine the "variable cost of goods manufactured". If you use this method to calculate the standard price, then the system only credits the cost centers with the variable portion of the activity type in Cost Object Controlling when the costs are recorded. The fixed portion of the activity type remains on the cost center. You can transfer it at the end of the period, using assessment in the Profitability Analysis (CO-PA). The advantage is that fixed costs are not proportionalized in the actual data, enabling true contribution margin accounting.

Production costs calculated using product costing can be used in profitability analysis to evaluate the products sold on the basis of marginal or full costs (corresponding to the cost of sales accounting method). Additionally, cost splitting into fixed and proportional costs enables you to display the true contribution margin on the basis of marginal costing, in the Profitability Analysis component.

• Activity-Based Costing

(see: Overhead Cost Controlling )

Multiple Valuation Approaches in Overhead Cost Controlling

You have the option of working with multiple value flows.

For information about the basic business principles for multiple valuation approaches in the system and about portraying multiple valuation approaches in Controlling, see the SAP-Library under  Accounting Enterprise Controlling (EC) Profit Center Accounting Multiple Valuation Approaches/Transfer Prices  or  AccountingFinancial Accounting General Ledger Accounting (New) Business Transactions Multiple Valuation Approaches/Transfer Prices .

You make the required settings for using multiple valuations in Customizing under  Controlling General Controlling Multiple Valuation Approaches/Transfer Prices  or  Financial Accounting (New) General Ledger Accounting (New) Business Transactions Multiple Valuation Approaches/Transfer Prices .

This section explains the aspects of multiple valuation approaches that are relevant for Overhead Cost Controlling.

Features

Value Flow

Distribution, Assessment, and Periodic Reposting

Distribution, assessment, and periodic repostings are executed for actual data and in parallel for all valuations. The costs to be allocated are taken from the relevant valuation. The values of the operational valuation are used as the tracing factor. The allocated values can vary from one another in the different valuations.

The assessment of overheads from cost centers to Profitability Analysis (CO-PA) occurs in two valuation approaches: the legal valuation approach and the profit center valuation approach.

Internal activity allocation

Internal activity allocation are executed in the operational valuation. The plan price used for the allocation is valid for all valuations. During a later phase, it is possible to use different (manual) plan prices for the different valuations, dependent on the receiver.

Actual price calculation and revaluation on orders is possible in all valuation views. The system distributes the actual costs to activity types on the basis of the planning in the operational valuation.

Accrual and Overhead

The operational valuation forms the basis for accrual calculation and overhead rates. The amounts calculated are valid for all valuations.

Settlement

Settlement occurs in parallel in all valuations, with the exception of settlement to fixed assets and profitability segments. For settlement to fixed assets, the system uses the company code currency. For settlement to Profitability Analysis, it uses the operational valuation. Line item settlement to a fixed asset is possible only if you use the company code valuation as your operational valuation.

Reposting

You repost a document (with references) in each valuation for the amount updated when the document was originally posted.

Reposting of values is not possible for multiple valuation approaches.

Documents and Line Items

When you post a document, the system writes separate line items for every valuation. All the line items belong to the same document header.

Analysis and Information System

Variance calculation only takes place in the operational valuation.

The information system for Overhead Cost Controlling (CO-OM) can call up every valuation. The system only displays a field that is ready for input in the selection screen for the valuation if you have activated the update of multiple valuation approaches in at least one of the controlling areas of the current client. For more information, see Accounting Controlling Cost Center Accounting Information System for Cost Center Accounting Report Definition Report Painter . In reporting, you can make target/actual comparisons between plan values in the operational valuation and the actual values in other valuations.

Availability Control

Commitments are only executed with the operational valuation.

Active availability control compares the actual values of the operational valuation with the released budget. Therefore, availability control takes place in the operational valuation.

Reconciliation with Financial Accounting

You can use multiple valuation approaches either in classic Profit Center Accounting (EC-PCA) or in New General Ledger Accounting, which incorporates Profit Center Accounting as an integral part. This has the following consequences for Financial Accounting:

If you use classic Profit Center Accounting, all valuations are updated in the reconciliation ledger. When you enter reconciliation postings, the system reports the values to Financial Accounting in all valuations. However, it does not include valuations that are not made in Financial Accounting. For more information, see the SAP Libraryunder  Accounting Controlling Cost Element Accounting Transfer Prices in the Reconciliation Ledger .

If you use Profit Center Accounting within the framework of New General Ledger Accounting, the values from Controlling are transferred directly to General Ledger Accounting via real-time integration. For more information, see the documentation in the SAP Library under  Accounting Financial Accounting General Ledger Accounting (New) Configuration Real-Time Integration of Controlling with Financial Accounting .

By default, reconciliation reports and cost flow reports display the values in the company code valuation.

CO External Data Transfer

Use

You need to transfer external data if you previously stored your data in non-SAP systems or in an SAP R/2 system, and now want to transfer it to the ERP system (such as to Cost Center Accounting ). For example, you can transfer your planned primary costs to SAP-internal structures. The ERP system performs the same checks on the data as for the corresponding dialog functions.

You have two options for transferring data to the ERP system:

• External Data Transfer with Function Modules
• External Data Transfer with BAPIs

External data is subdivided as follows:

• Master data
• Planning data
• Actual data

External Data Transfer with Function Modules

Use

SAP provides function modules for transferring plan and actual data from external or legacy systems. You call up these function modules in a program that you have to create yourself.

 Note

With effect from Release 4.6A, SAP also provides Business Application Programming Interfaces (BAPIs) for transferring external data. SAP recommends using BAPIs so that you can transfer external data into the SAP System without the need for programming.

Prerequisites

Since you need to create your own program (containing all the necessary steps for data transfer) for transferring external data using function modules, you should have previous experience in ABAP programming.

To simplify the external data transfer process, SAP demonstration programs are available. These programs contain sample calls of the function modules, which control the data transfer.

Features

You can transfer plan and actual data from external or legacy systems into the SAP System using function modules.

You can carry out Plan Data Transfer by calling up the appropriate function module directly in the program. The SAP System carries out all the checks on the data to be transferred in a plan data transfer using function modules.

You can carry out an actual data transfer in the background, or by using immediate update. The function modules transfer the data directly to the corresponding screens . The SAP System performs checks on the screen, and not while the function module is being processed. This enables you to analyze any errors that occur. There are three SAP demonstration programs for actual data transfer, which include important steps for the transfer of actual data.

When you transfer external data to the SAP System (for example, from a sequential file with a specific structure), you need to change the data structure to conform with the existing SAP structure. This means that you assign the external data to the fields in the SAP structure.

The program for the external data transfer must contain the following steps:

1. Read the data records to be transferred
2. Transfer the data to an internal table with an SAP-defined structure
3. Transfer actual or plan data using demonstration programs.

External Data Transfer with BAPIs

Use

SAP provides Business Application Programming Interfaces (BAPIs) for transferring plan, actual, and master data from external or legacy systems as part of the system implementation. BAPIs enable you to transfer external data without the need for programming.

See also: Data Transfer Methods

 Note

You can only transfer actual data from internal orders using the following transactions:

• The KAFD transaction, which transfers costs on orders/projects and networks.
• The KAFL transaction, which deletes transferred costs on orders/projects and networks.

  External Data Transfer of Master Data for Internal Orders, with Transaction

  Use

  Instead of using batch input, you can transfer internal orders automatically from external systems to the ERP system. The system transfers data from the external files into the data fields of the new ERP internal orders. The easier way of transferring external data from master data is to use a BAPI. For more information on external data transfer of master data for internal orders using a BAPI, see Information Sheet: Transferring Master Data for Internal Orders . Legacy data and external data is normally transferred to the SAP system as part of the implementation project in the IT department.

  

  To transfer actual data from internal orders, use the following transactions:

  KAFD, which transfers costs on orders/projects and networks

  KAFL, which deletes transferred costs on orders/projects and networks

  Prerequisites

  You are in transaction KO09 Sender Structure Maintenance for Orders: Master Data .

  Features

  The system transfers the data from the external files to the data fields of the internal orders that you want to create. The procedure for is the same as for creating orders from the application. To transfer data, you can use the receiver structure OREXT (external order) in the SAP system. This receiver structure (for transferring data from the external system) consists of the fields in the order master data, and up to three distribution rules. A corresponding sender structure must exist in the external system. All orders you want to create in the SAP system must exist in an external file with the same format as the sender structure. The external file must contain exactly one complete sender structure for each order (including up to three distribution rules).

  See also:

  Example of a Completed Sender Structure

  Order Settlement

  The field KONTY_n determines the settlement receiver (n = 1, 2, or 3). You can settle to the following receivers if you fill KONTY_n as follows:

  Settlement Receivers

  Receiver	KONTY_n	Conversion Exit
  Asset	AN	ALPHA
  Cost center	KS
  Cost object	HP	ALPHA
  Network	NP	ALPHA
  Order	OR	ALPHA
  Sales order	VB	ALPHA
  Project/WBS element	PR	KONPR
  G/L account	SK	ALPHA

  If you want to use fewer than three distribution rules, leave the KONTY_n fields blank that you do not need.

  The (BUKRS) field in the distribution rule is needed for future releases, and is currently not included. Therefore you need to leave it blank.

  The SCOPE field (object class) is two characters long in the OREXT. Entries there are not language dependent (for example, OC for overhead costs). For the purposes of the screen display, the system determines the language-dependent field content from the domain table for the SCOPE data element. The content is displayed with five characters (such as GKOST for overhead costs).

  For order types whose old order status management is active, you can use the ASTNR field to set the initial status. Otherwise, the system uses the default status.

  The same consistency checks are made for the automatic creation of internal orders as those made when you create or maintain internal orders in the transactions. This means you must fill the same fields. The field names in the sender structure must be the same as the screen field names.

  

  Name on the screen:	Plant
  Screen field name:	WERKS
  Field name in sender structure:	WERKS

  You can display used field names on a screen by positioning the cursor on that field, then choosing F1 andTechnical information . In the data element field, you can see the technical name of the corresponding field.

  Maintaining Order Types and Dependent Objects

  Many of the attributes of the order to be created are derived from the order type (for example, whether revenue postings are allowed or not). You need to specify the order type in the appropriate field in the sender structure. The data you transfer using the sender structure must fit the definitions of the corresponding order type in the system.

  If you require a settlement rule, you need to enter a settlement profile in the order type. If you want to transfer a source assignment, you must maintain the source structure.

  The SAP system must be able to recognize all the organizational units, settlement receivers, and so on. To settle one of the orders you want to create to a different order, you cannot create this in the same run as the order you want to settle, as it must already exist in the system.

  

  In contrast to the creation of orders in the application, you cannot use reference orders or model orders in the process of transferring old, or external data from external systems.

  Activities

  If the sender and receiver structures are the same, proceed as follows:

  Define the Sender Structure

  Choose New Entries.

  Enter the sender structure name (such as ORSEND) and an explanatory short text.

  Enter a 1 under Item .

  Enter OREXT as a DDIC structure.

  Save the sender structure.

  Edit the Transfer Rules

  Choose Environment Transfer Rules. The sender structure that you just generated is already defaulted.

  To edit the transfer rules, choose Maintain.

  Choose Create Default Rule. The system inserts the field names of the sender structure into the sender fields.

  Save the default rule.

  If the sender and receiver structures are not the same, see the implementation guide (IMG) for information on settings that you can make, under Enterprise Controlling → Executive Information System and Business Planning → Data Transfer.

  Example for a Data Transfer

  The report RKOFILET is available as an example of data transfer from an external system. You can use this report to create sender records on the hard drive of your presentation server for testing purposes.

  Proceed as follows:

  Generate the sender structure ORSEND as described above.

  Start the report RKOFILET and make entries in some of the fields provided. The data is not checked, as this is a test.

  Start the transfer of legacy data.

  Set the following indicators for the test:

  File system: Presentation server

  File type: CSV format

  Number format: Decimal point

  For an overview of the written sender records, and the messages for each record, choose Logs.

  To be able to see this overview later on, start the report RKCDLMON.

  Activities

  Transferring Legacy Data and External Data

  You can also:

  See files using the transaction KO08.

  For more information on data transfer, see the SAP Library , under Financials → Enterprise Controlling →Executive Information System and Business Planning → Data Collection → Data Transfer Methods .

Interfaces to Other SAP System Components

Use

To transfer cost-accounting relevant postings in real-time from other SAP components, you can use a central interface (AC interface), which controls the updating of actual data within the SAP system.

You can also use the AC interface (RWIN)

• To integrate user-defined functions into the business transaction flow

You can make additional checks that are not provided for by SAP.

 Note

You should modify the FI/CO interface only in cooperation with the SAP consulting services, because incorrect settings can lead to inconsistencies in the updated data..

• To collect data from other SAP components when using distributed systems ( Application Link Enabling ).
• To collect data from external systems

For more information, see the SAP Library under  AC - Financials AC - Accounting General  AC - Interfaces to Accounting IDoc Interfaces for Data Transfer to the AC Interface . 

Features

The RW interface default settings enable all Controlling-relevant postings to be transferred, in real-time, to Controlling. The system makes checks and updates data in the interface.

 Note

If you would like to remove certain components from this integration, then you need to make settings for each particular case in the corresponding program control tables.

Communication between the FI and CO application components is controlled by the AC interface.

The data issued from an application component is transferred to the AC interface. The AC interface transfers the data to the receiver component. This then receives the incoming data via one of the following collection interfaces:

• The GL interface for Financial Accounting (FI)
• The AM interface for Asset Management (FI-AA)
• The CO interface for Controlling (CO)

Standard Interface Settings

In the TRWCA table, you can activate or deactivate components according to fiscal year. This can be useful for performance if the components are only to be used (productively) at a later date.

Components in Table TRWCA

Component	Description
COFC	Availability control
COOI	Commitments Management
COPA	Profitability Analysis
COPC	Profit Center Accounting
CORL	Reconciliation ledger
ECCS	Consolidation
EXTX	Tax Interface
FDIS	Cash Management and Forecast
FI	Financial Accounting
FIFM	Cash Budget Management
FMRE	Funds Reservation
FILC	Business Area Consolidation
FMCO	Cash Budget Management, Controlling
GL	General Ledger
ISRE	Real Estate Management
JVA	Joint Venture Accounting
MM-1	Logistics Material Ledger
MMML	Material Ledger Update
PS	Project System
RAIN	Asset accounting
RK-1	Controlling: Actual Postings
RWEX	IDoc Output, External Accounting
SD	Sales
VV	Financial Assets Management

Fiscal Year Dependent Entries in Table TRWCA

Component	To Year	Active
RK-1	1990
RK-1	1999	X

The first entry deactivates the RK-1 component until fiscal year 1990. The second entry activates it until fiscal year 1999.

These entries ensure that all postings as of fiscal year 1991 are transferred to Controlling.

 Note

If you wish to deactivate specific components, you need to use the TRWCA table. The system does not delete the component entries that you wish to deactivate, but inactivates them in this table. The table can thus be retained in its complete state, as delivered by SAP in the standard.