SAP Controlling 10 Comments / SAP Controlling / By ERPSOLUTION Table of Contents A 1. Create Controlling Area 2. Assign Controlling area to Company codes 3. Controlling area Number Range 4. Control 5. Cost Element Accounting 6. Cost Element Categories 6.1. Codification 6.2. List / Display Cost Element 7. Cost Element Group SAP Controlling Controlling module provide information to management for planning, repor ingand monitoring of business operations. Controlling and Finance are independent modules in SAP. Data flows between Finance and Controlling module on real time basis. Cost Element provides the integration point between Controlling and Finance. Acost element can be an expense or revenue item. SAP Controlling will be covered in below tutorials: * Cost Element Accounting * Cost Center Accounting « Internal Orders * Product Costing + Profit Center Accounting * CO-PA (Controlling and Profitability analysis) Cost Center Acost center can be a department like Administration department, Finance Department, Marketing department etc. Acost center collects and redistribute cost to other departments. Each cost center hasa planned cost, Actual cost and their Variance Key benefits of Cost Center Accounting: «Managers can set budget for the cost centers * Cost Planning for the Cost Centers © Cost Centers collect cost and then this cost can be redistributed to other cost* Standard cost is fixed for a period * Standard cost for a product is calculated in transaction CK40N Planned Cost * Aplanned cost is the estimated cost for completion of a job order. A standard cost is for specific unit of product, whereas planned cost is for ajob order. + Planned cost for a production order is calculated inCO01 + Actual cost for completion of Production order is calculated in CO01/CO02 Organization Structure Operating Concern —+| co-ra | i ¥ Controlling Cost Element, Cost Center, Product —| Area | Costing, Internal Order, Profit Center ‘Aceounting \ Le Co. Code 1, Co. Code 2, Co. Code 3 Co. Code 4 Controlling Area 2 Controlling Area The controlling area is an organizational unit in Accounting used to subdivide the business organization froma cost accounting standpoint. Itrecords and analyze cost element, cost center accounting, internal order, manufacturing related activities (Product costing), and internal unit acti Profit center accounting Can assign n number of company codes to a controlling area if below conditions are satisfied Chart of accounts is same between company codes and control Fiscal year between companies’ codes have same number of posting periods (other than special posting periods) Start and end period is same (Jan-Dec, Apr-Mar) for all fiscal years. Start and end dates same forall fiscal years Operating Concern = Can assign one or more controlling area to one operating concern Leading and Non-Leading Ledger + Only leading ledger integrates with controlling area. * Non-Leading ledger does not integrate with controlling area Create Controlling Area Transaction code to set controlling area: OKKS Transaction cade to create Controlling area: OKKPthe highest node In cost center hierarchy 2ootretng Ava Contreling Area Phaze ota arciate component. + GaAcignment of comp P72" Reswonsble Assonment control ee ‘cotd-»€0 Ares 2 Cross conoany cole cos accouning ‘urency Setting ‘urency Tree 39 ‘Group curency ‘curency oR aro (EMU currency a6 of 0. Z}0H. CCode Currency (cur) Val ro. Dactre omer semngs Chart of Acets es ‘AUN TECH US Operate Chart of Accounts Peal YeurVarent HE ‘Glendar yom, 4 spac. pesods com std. Merarchy —__taa_ce Reconcléton Ledger Crecon.eeger Act Document Type Setting fr Authoreation Herachins for Cost Centers DoNot Use stdin.) Ateratie Weary! Aterative Warchy2 Setting fr Authorzation Werachias for Prof Contars DoNat Use Seder.) Aterative Warchyi atematne Wesrchy2 0) Assign Controlling area to Company codes Controling Area Controting Area [Ra Bhotroting area for wikia + Ciasic date Activate below components * Cost center «Select Activity type: This allows analyze of labor activity + Order management; Production order, Process order, Service order + Commitment Management * Pronttability analysis is implemented when CO-PA is activated * Profit Center accounting: Required to activate for classic GL. Not required for new GL as part of finance + Projects * Cost Objects * Variance * Allcurrencies ‘= Company code validation: Applies only to cross-company-code cost controlling and to postings from external accounting. Eg. A procurement ‘order made for a cost center In another company code Is possible only if the indicator is inactive. | controling Area [ML] Controling Area for NKi4 Fiscal Year fz0is)co _{a995| + GActivate component + DAssignment of comp:Controlling area Number Range Transaction Code: KANK In Finance Document types are assigned to number ranges Incontrolling CO document are saved are Business transaction types Eg. of Business Transaction types are * KAUS: Calculate Scrap * KAMV: Manual cost allocation CO number range is assigned to business transaction type Procedure: Click the create button, Now create the Group say Primary posting and create number range for this group say 1 to 199999. Now come back to the previous, screen. Select the unassigned business transaction. Click button Element, select the group created earlier. This business transaction get assigned to the group and get's the number range of the group Group Number Range Primary 100000-200000 Secondary 200001-400000 Planning 400001-600000 (eters) (7 intervas A __nstatus | Group [Premary iid Object fa_peTES Subobjec: HE Ranges Fromno. To Number e900100000 ‘ccoo2co00d 0 Group Maintenance: Number Range RK_BELEG, Subobject MK14 70 [Herevc] @ 293 @ Bes B Plan split costs o a ecg Sor] A _[pranning MicaDefault version is zero. Version zero is used for both actual and planning. Other versions are used only for planning IMG Path: SPRO-Controlling - General controlling - Organization - Maintain versions Select General version - Select version 0 - Controlling area settings - Select year to be activated - Settings for each fiscal year akg Structure Controling Area, {MELA} Controling Area for M14 + Ciseneral verson Detiniton ‘Version [e) PlonAct Version + Gisettinas in operating Concern + Gasetina orate cetet Accounting + Glcostetn Aes Seas ‘ation Settings for Exch Fecal Yen ~ hsartng for Each cl Yer ‘Yor Vein Lach ImteytedPbonng —_|Copyieg owed + tdeta Ventre bun Tanexctore for) 7 a FA + Casetsns orSrogres Ane reset Sy n0 a ; - a1 al o 2g 2 Oo ia a 9 } oO a Click Price calculation * Plan Method: Average Price * Actual Method: Period Price Daleg Stucture 00 Area [Hea] controling Area for MK + (General Version Defintion = > Bo Gisettings n opereting Concern Settings for Proft Center Accounting |Controling Area Settings + Gsettings for Each Fiscal Year Fecal Year 2016| Cost Comp. Str. Clee spit m Object Curr Cost Element Accounting Cost elements are cost carrier between cost objects. A cost element can be represented either as cost or revenue. There are two types of cost elements, Primary and Secondary + Primary Cost Element * Main integration between Fl and CO. Values flow from FI to CO through primary CE ‘= Allincome and expense accounts can becreated as a primary CE + GLaccounts for WIP and production variance are not created as primary CE, These are calculated in CO. They flow from CO toFl * Secondary Cost Element * These are not represented by GL accounts «They exist only in controll + They are used for below purpose « Transfer cost between cost objects + Apply direct / Indirect OH to product cost » Transfer values from cost center to CO-PApost to a cost element directly or indirectly: * Direct posting: You post a fixed amount to an account by specifying the account number. You can post directly to all primary cost elements. + Indirect posting: The account is determined automatically at the time of posting. indirect posting is only possible for secondary cost elements. CE Categories ‘Seconcary CE 21 Teveralsestlement 31 : WIPE 0: RACE 41: Tedieot OF 43 sTovernal Activity / Direct OH 42: Arcorsment CE 01: Primary CE [a1 Reveme 12: Sales dedeto | 22; Extemalsetlement l Various Cost Element Categories: * 01Primary Cost Element: These are used for expense GL accounts other than sales deductions ‘+ 12Sales deductions: This cost comes from Sales and Distribution (VKOA). This cost flows to CO-PA. Category 01 cannot transfer cost from SD to COPA * 22External Settlement * Move cost from CO toFl «Transfer Internal order cost from CO to Fl + 11 Revenue : These are used for Sales / Revenue GL accounts + 21 Internal settlement: Used tosettle Service order to cost objects (Cost center, Internal order, Production Orders, Sales Order) + 31WIP/RA «Used in Product costing. Required for calculation of WIP (Work In Progress) / RA (Result Analysi «For WIP there are twoaccounts. WIP B/S account and WIP P/Laccount * Period 6 WIP BS account is DR and WIP P/L account is Credited. Period 7 (Next period) beginning WIP P/L account is DR and WIP BS account is CR. + 41 Indirect OH + Fi costs of two types direct cost and indirect cost. Direct cost like material Is traceable to the product. Indirect cost like administrative expenses are not directly traceable to the product. Client can provide a% of material cost, say 10%, which can be assigned as Indirect OH to the product * 42 Assessment CE Category «Used to transfer values from Cost center to CO-PA. Eg. transfer marketing department cost to COPA. ‘= Transfer cost from one cost center to another cost center + 43 Activity Cost Element (Direct OH) ‘* Used to transfer Cost center cost to product based on time spent on Job. Eg Labor activity cost, Assembling cost Codification Primary Cost Element* Create Secondary Cost Element in Controlling: KA06 List / Display Cost Element Transaction code: KA23 Primary Cost Element Udee [Beirption fy [Aceoumt Group [6S [line =| [Recon Sorte s[eree] 700000 _DirectMteral_|PBL [Mat\Consamption 600% Dre Ned | 00100 Salaries Pat [sutfespenses ‘conn | Saves a SORG00" Sees Income —(PL|seesImcorne ‘oe ‘ool Sea Er 0500. Oepreiion [ot |oeprecaion os x Tore Deprecnion | 00800 _Oirseling exp [Pt linerest Expenses Dr sling xp] 12 200101 Soles Conm [PL literest Expenses SesComm. | 12 ~o0n01|cOsM PL_ Manufacturing Expense ‘coc 1 ‘ono? (Coss [PL [Manufacturing Expense ‘cocs 1 Secondary Name CE Category cE 942000 _ canteen assessment cost element 42: Assessment (distribution is based on number of employees) 941000 material indirect overheads cost element 41: OH (depreciation based on % of material cost) 943000 _ production dept depreciation direct overheads cost element (for depreciation based on machine hour rate) 43: activity 942001 employee cost or labor direct OH cost 42: activity element (for salaries & canteen dept's allocation/machine hr. allocation/labor hr. distributed cost of production department costs based on labor hou ir rate) 942001 material assessment OH cost element 42: Assessment (based on revenues ratio) 942002 marketingassessment OH costelement 42: Assessment (based on revenues ratio) (All these are secondary cost elements) Cost Element Numbering rules can be like one shown below: ‘+ 9: Starting Number © 41/42/43: CE Category © 000/002: Sequence number Cost Element Gro up Cost Element Group is an organizational unit storing a group of cost elements. Any number of cost element groups can be defined as part of master data maintenance for valuation, plannii Center Accounting. It Is used for report ing purpose Transaction Code: KAH1/ KAH2/ KAH3 ig and allocation purposes in Cost Element Accounting or Cost Menu Path: Accounting - Controlling - Cost Center Accounting - Master Data - Cost Element Group - KAH1-Create400000 ‘Direct Material [= soa apwce [—& ene pRocE ‘3 iid REVCE RIWESECUENN exis secourary ce fe sae wzece [= wad bom (c® SAP Controlling Video Tutorial : For detailed, step-by-step instructions on SAP. Controlling overview, follow along with my video tutorial below. <— Previous Post. 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