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Internal Orders can be created for various jobs within a Controlling

Area for example


Overhead Cost Orders: To analyze the details of events which are
settled on cost centers, profitability segments, or another order.
Investment Orders: to monitor investments like creation of a fixed
assets, can be settled on a G/L account, project or asset
Accrual Orders: To monitor accrued costs calculated in Controlling
like input interest, or Costing depreciation.
Orders with Revenue: Gives an excellent object to analyze costs
and revenue of a particular event in an enterprise. These revenue
generally do not mean the regular revenue of the business, these
may be other revenues.

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You see here different scope and techniques for Planning Cost
on an Order
You can do overall planning separately from the cost elements.
You can use primary and secondary cost and revenue planning.
This type covers the planning of primary costs, activity inputs,
and revenues in manual planning or automatic planning.
You can do unit planning on the orders
You can also plan statistical key figures on the order and use
that as a base for allocation of costs.

Internal Orders in the SAP System describe individual jobs within a


Controlling Area. Orders support action-oriented planning,
monitoring, and allocation of costs. The expense or revenue
posted in FI will create two documents one in Financial Accounting
and another in CO. If expense is posted in FI the Income statement
account will be debited and balance sheet account will be credited,
simultaneously in CO the internal order will be debited. The CO
document contains controlling object, cost element amount, and
so on.
An order can be real or statistical. You use the real order to collect
costs and allocate them later to different recipients. You use the
statistical order to evaluate costs which cannot be itemized in
detail in Cost Element or Cost Center Accounting. If it is a
statistical posting, the cost object that the internal order is
attached to would receive the real posting.

Commitments are payment obligations that are not entered into the
accounts, but that lead to actual costs at a later date. They are
incurred in the purchasing function, in the Materials Management
component. A purchase requisition is mere request and therefore there
is no need for any commitment item recording in Controlling. A
purchase order is a contractual agreement specifying that goods or
services from a vendor will be taken under certain, agreed conditions
and therefore it is a commitment and needs to be displayed in
Controlling.
A commitment amount of 500 is entered that of purchase order. Please
note that placing a purchase order will not trigger any FI documents.
When you receive the goods which means the purchase order
obligation is met and hence the commitment is reduced by processing
goods receipts against the purchase order. Actual costs are posted to
the CO object. This business transaction is continued until the
purchase order is processed, and the commitment amount is zero.
Here you can see that once the goods receipt is posted, the
commitment has become zero.

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The Order is used as an interim cost collector, settlement may


occur at the end of each point, or at the end of the orders life,
depending on the type of order and its business purpose. Once all
the costs are collected; it is transferred within Controlling to any
of the cost object like Cost Center, another order, Project, a
profitability segment or to a sales order. It can also be transferred
to an Asset or a G/L account in FI. This process is called
settlement. Settlement within controlling is called internal
settlement while settlement to Assets or G/L as it is FI component
it is called external settlement. You can allocate the costs in
settlement to one or more objects. Note that settlement of order
is not mandatory.

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