SAP Controlling (SAP CO)

The purpose of the Controlling (CO) module in SAP is to provide organizations with a
method of slicing and dicing data to view costs from an internal management
perspective and provide a view of profitability beyond that of basic financial
reporting. This allows the organization to create information in a manner that is
tailored to their specific business measurements needs. Controlling allows an
organization to:
Plan and track overhead costs within the company's specific organizational
structure.
Track costs related to specific projects or events and either capitalize those
costs or charge them to appropriate departments upon completion.
Perform "Activity Based Costing".
Perform Product Costing, measuring production cost and variances.
Report profitability by product line, division, or other internal measurement.
Report sales and gross profitability by external measures such as market
segments or customer groups.
Controlling consists of all master data, configuration, and reporting required to
analyze both spend and revenues, both within and across organizations. This
includes the following master data:
Cost Elements - cost and/or revenue accounts
Cost Centers - departmental units
Profit Centers - business lines, product lines or divisions
Internal Orders - projects or events
Functional Area - Cost of Sales Accounting
Statistical Key Figures - non financial statistics for allocating or measuring
financial costs
Activity Types - Labor or other activity costs






























Costing sheet
Source: http://sap-controlling.blogspot.com/


Use of costing sheet:
In the costing sheet, you determine the following:
The direct costs to which overhead is applied (calculation base)
The conditions under which overhead is applied (dependency)
Whether overhead is calculated on a percentage basis or on a quantity basis
The amount of the overhead percentage, or the amount of overhead for each
unit of measure
The validity period for the overhead
Which object (cost center or order) is credited, and under which cost element
for actual postings (credit key)
Overhead cost elements:
IMG Controlling Product Cost Controlling Product Cost Planning Basic
Settings for Material Costing Overhead Maintain Overhead Cost Elements

Overhead cost elements used to define overhead to products.




Calculation Base:
IMG Controlling Product Cost Controlling Product Cost Planning Basic
Settings for Material Costing Overhead Costing Sheet: Components Define
Calculation Bases
The calculation base determines to which cost elements overhead is applied
together.
We will define 2 bases on which overheads will be calculated:-
1) Materials
2) Wages



Product Costing fastfacts
Define calculation base
Define percentage overhead rates
Define costing sheets
Define overhead keys
Define cost component structure:
Define structure
Define cost component
Assign cost elements to cost components
Product costing is a tool for planning costs and establishing prices for materials. It
is used to calculate the costs of goods manufactured and the costs of goods sold for
each product unit.

If costing is carried out on the basis of data in Production Planning (PP), then the
cost estimate is a product cost estimate with a quantity structure (for example,
BOM and routing). If costing is carried out on the basis of data that you enter
manually, then the cost estimate is a product cost estimate without a quantity
structure.
Product costing belongs to both the Production Planning (PP) Module and the
Controlling (CO) Module.
Cost Object Controlling is used in the following areas:
Order Related Production.
Repetitive Manufacturing.
Process Manufacturing.
Sales Order Related Production.
Engineer to Order.

Controlling area OX06
Controlling area is an organizational unit within a company that represents
company for cost accounting purpose.
Controlling area can have more then one company code assigned to it, but one
company code can have one and only one controlling area. All company codes under
same credit control are must have same operative charts of accounts.
IMG --> Controlling --> G/L--> organization --> Maintain controlling area OX06



Use CoCd --> CO area if your company code is same as the controlling area and you
have just one company code in the controlling area otherwise use second option.
Cost element group KAH1

Accounting Controlling Cost Element Accounting (or Cost Center Accounting)
Master data Cost element groups Create/Change/Display.

Cost element group used for collecting similar characteristics in same groups.
Cost element group structure used for row structure for reporting purpose.

Characteristics & Values in SAP COPA


Cost elements: Primary & Secondary
Cost center is a cost element classifies the organization's valuated consumption of
production factors within a controlling area.
Cost center is an organizational unit within a controlling area that represents a
defined location of cost incurred. It can be defined based on various criteria such as
functional requirements, allocation criteria,physical location etc.
Primary Element -
Primary costs that originate outside the company; relate directly to the income
statement in FI and must be
included in the FI Chart of Accounts.
All Primary cost elements gets linked to Income statement.
Secondary Element -
Secondary costs that result from internal allocation activities; NO relation to G/L
accounts in FI. These
accounts are exclusively for cost accounting and are only maintained in CO.


























Business process associated with the SAP CO module:



Subcomponents of the SAP Controlling (SAP CO) Module:
CO-OM - Overhead Management
- CO-OM-CCA - Cost Center Accounting
- CO-OM-OPA - Internal Order Accounting
- CO-OM-CEL - Cost Element Accounting
- CO-OM-ABC - Activity Based Costing
CO-PCA - Profit Center Accounting
CO-PA - Profitability Analysis
CO-PC - Product Costing