Integrated Business Processes With Sap Erp Part 9 Management Accounting Ides v6

Integrated business processes with SAP ERPScript 9: Management accounting in SAP ERP Prof. Dr. Heimo H. Adelsberger Dipl.-Wirt.-Inf. Pouyan Khatami Dipl.-Wirt.-Inf. Taymaz Khatami Integrated business processes with SAP ERP Table of contents Table of contents ........................................................................................................................ 2 Table of figures .......................................................................................................................... 5 Copyright .................................................................................................................................... 7 1 Introduction: Management accounting in SAP ERP .......................................................... 8 1.1 Unit objectives “management accounting in SAP ERP“............................................. 8 1.2 Scenario ....................................................................................................................... 9 2 Management accounting with SAP ERP .......................................................................... 11 2.1 Theory – Overview of management accounting ........................................................ 11 2.1.1 Comparison of financial accounting and management accounting .................... 11 2.1.2 Architecture of management accounting ............................................................ 11 2.1.3 Typical tasks in management accounting ........................................................... 12 2.1.4 Value flow in management accounting .............................................................. 13 2.1.5 Integration with other SAP ERP components .................................................... 14 2.2 Theory – Organizational levels in management accounting ..................................... 16 2.3 Theory – Cost center accounting ............................................................................... 18 2.3.1 G/L accounts and cost types ............................................................................... 18 2.3.2 Standard hierarchy: all cost centers per controlling area ................................... 18 2.3.3 Activity types ..................................................................................................... 19 2.3.4 Relationship between cost center and activity type ........................................... 20 2.3.5 Statistical key figures ......................................................................................... 21 2.3.6 Master data groups ............................................................................................. 22 2.3.7 Cost center planning ........................................................................................... 23 2.3.8 Integrated planning process in the SAP ERP system ......................................... 24 2.3.9 Posting logic ....................................................................................................... 25 2.3.9.1 Real and statistical objects in management accounting .............................. 26 2.3.9.2 Posting from financial accounting to a cost center ..................................... 27 2.3.9.3 Postings from materials management to a cost center ................................ 28 2.3.10 Direct activity allocation .................................................................................... 28 2.3.11 Periodic allocations with sender/receiver relationships ..................................... 29 2.4 Practical application – Cost center accounting .......................................................... 32 2.4.1 Cost centers ........................................................................................................ 32 2.4.1.1 Cost center: Cafeteria .................................................................................. 32 2.4.1.2 Cost center: Maintenance ............................................................................ 33 2.4.1.3 Cost center: Manufacturing......................................................................... 33 2.4.2 Other master data: Statistical key figures ........................................................... 33 2.4.3 Other master data: Secondary cost elements ...................................................... 34 2.4.3.1 Cafeteria assessment ................................................................................... 35 2.4.3.2 Activity allocation of maintenance hours ................................................... 35 2.4.3.3 Activity allocation of manufacturing hours ................................................ 36 2.4.4 Other master data: Create activity types............................................................. 36 2.4.4.1 Maintenance hours ...................................................................................... 36 2.4.4.2 Manufacturing hours ................................................................................... 36 2.4.5 Other master data: Cost center group for cafeteria assessment .......................... 37 2.4.6 Carry out cost center planning ........................................................................... 38 2.4.6.1 Planning the number of employees ............................................................. 39 2.4.6.2 Planning activity output .............................................................................. 39 page 2 Copyright Prof. Dr. Heimo H. Adelsberger/Dipl.-Wirt.-Inf. Pouyan Khatami/ Dipl.-Wirt.-Inf. Taymaz Khatami Integrated business processes with SAP ERP 2.4.6.3 Planning primary cost input ........................................................................ 40 2.4.6.4 Planning activity input ................................................................................ 41 2.4.6.5 Check hitherto planning .............................................................................. 42 2.4.7 Planning cafeteria costs ...................................................................................... 43 2.4.7.1 Create cafeteria assessment ......................................................................... 44 2.4.7.2 Performing assessment for cafeteria costs .................................................. 44 2.4.7.3 Check effects of the assessment .................................................................. 45 2.4.8 Automatic price calculation for the two activity types ...................................... 47 2.4.9 Actual cost entry................................................................................................. 48 2.4.9.1 Plan/actual comparison cost center accounting .......................................... 48 2.4.9.2 Direct activity allocation ............................................................................. 49 2.4.9.3 Post expenses to cafeteria cost center ......................................................... 50 2.4.9.4 Period-end closing ...................................................................................... 53 2.5 Theory – Internal orders ............................................................................................ 56 2.5.1 Planning internal orders ..................................................................................... 56 2.5.2 Posting to an internal order ................................................................................ 57 2.5.3 Commitment ....................................................................................................... 58 2.5.4 Order settlement ................................................................................................. 58 2.6 Practical application – Internal orders ....................................................................... 60 2.6.1 Create internal order ........................................................................................... 60 2.6.2 Commitment management ................................................................................. 61 2.6.3 Goods receipt for an order .................................................................................. 62 2.6.4 Direct activity allocation .................................................................................... 63 2.6.5 Expense posting for manufacturing and maintenance ........................................ 63 2.6.6 Cost reports ........................................................................................................ 64 2.6.7 Excurse ............................................................................................................... 66 2.6.8 Completion of the internal order ........................................................................ 67 2.7 Theory – Profit center accounting ............................................................................. 69 2.7.1 Typical questions in profit center accounting .................................................... 69 2.7.2 An internal perspective of profit center accounting ........................................... 69 2.7.3 Integration planning in profit center accounting ................................................ 70 2.7.4 Advantage of profit center accounting ............................................................... 71 2.8 Practical application – profit center accounting ........................................................ 72 2.8.1 Assignment monitor of profit center accounting ................................................ 72 2.8.2 Profit center report ............................................................................................. 72 2.9 Theory – Profitability analysis .................................................................................. 74 2.9.1 Typical question in profitability analysis ........................................................... 74 2.9.2 Profitability segment .......................................................................................... 74 2.9.3 Profitability analysis per market segment .......................................................... 75 2.10 Practical application – Profitability analysis .......................................................... 77 2.11 Theory – Product cost accounting.......................................................................... 78 2.11.1 Overview of product cost accounting................................................................. 78 2.11.2 Price update ........................................................................................................ 80 2.11.3 Material master: Prices ....................................................................................... 81 2.11.4 Integration: Standard price and plan price ......................................................... 82 2.12 Practical application – Product cost accounting .................................................... 84 2.12.1 Creating a new work center for a cost center ..................................................... 84 2.12.2 Integration of the new work center into the routing ........................................... 84 2.12.3 Carrying out a new product cost estimate .......................................................... 85 3 Completion ....................................................................................................................... 87 4 Reflections ........................................................................................................................ 88 page 3 Copyright Prof. Dr. Heimo H. Adelsberger/Dipl.-Wirt.-Inf. Pouyan Khatami/ Dipl.-Wirt.-Inf. Taymaz Khatami ........... 90 page 4 Copyright Prof.................1 4........................... Dr..............Integrated business processes with SAP ERP 4.....................-Inf. 88 Standard solution ..... Heimo H..-Wirt......2 Questions ........................................... Adelsberger/Dipl................................... Taymaz Khatami ....-Wirt............-Inf..... Pouyan Khatami/ Dipl........................... ..................... Pouyan Khatami/ Dipl.................................................. 48 Figure 40: Plan/actual comparison cost center accounting (1): SAP system screenshot .................................................. Taymaz Khatami ................... 52 Figure 43: Plan/actual comparison cost center accounting (3): SAP system screenshot .................................... 47 Figure 39: Process overview: Cost center accounting: Actual costs ........................... 38 Figure 28: Process overview: Cost center accounting .... 21 Figure 13: Statistical key figures ............................................. 26 Figure 19: Postings from financial accounting to a cost center .....................Planning .................. 31 Figure 24: Process overview: cost center accounting – master data ........................................................................................................ 57 page 5 Copyright Prof............................................................................ Integrations-Fallstudie CO (mySAP ERP ECC 5..............................................................-Wirt.. 26 Figure 18: Real and statistical objects in management accounting .......... Integrations-Fallstudie CO (mySAP ERP ECC 5................................................ Adelsberger/Dipl.................. 19 Figure 11: Activity types ................................. 16 Figure 8: Multiple assignment...... 54 Figure 45: Plan/actual comparison cost center accounting (4): SAP system screenshot .................................................................................. 40 Figure 30: Overview activity input ......... 35 Figure 27: Create cost center group: SAP system screenshot ............. 28 Figure 21: Direct activity allocation.................... 14 Figure 6: Integration with other SAP ERP components ..................................................................................................................................................................................................................................................................... 24 Figure 16: Integrated planning process in the SAP ERP system ........................................................................................................0).......... 56 Figure 47: Plan internal orders ................... 44 Figure 35: Planning overview cost center manufacturing: SAP system screenshot ........................................ 32 Figure 25: Primary cost element.............................................................................................. 46 Figure 38: Overview price calculation for activity types ........................... 42 Figure 32: Planning overview cost center maintenance: SAP system screenshot ...................................... 17 Figure 9: G/L accounts and cost types ....................................... SAP-Hochschulkompetenzzentrum Magdeburg................................ 2006 ............................... 11 Figure 3: Architecture of management accounting ............... 49 Figure 41: Plan/actual comparison cost center accounting (2): SAP system screenshot ................. 20 Figure 12: Relationship between cost center and activity type ........................................................ 38 Figure 29: Overview primary cost input ................................................................................................................... 46 Figure 37: Planning overview cost center cafeteria: SAP system screenshot ................-Inf............. 15 Figure 7: Organizational levels in management accounting ........................ 29 Figure 22: Periodic allocations with sender/receiver relationships .................. 23 Figure 15: Cost center planning ................... 13 Figure 5: Value flow in management accounting ....................... 53 Figure 44: Period-end closing actual assessment: SAP system screenshot ...... Dr.................................................................. 30 Figure 23: Example of a periodic allocation ........................................................................-Inf..... 22 Figure 14: Master data groups ................. 35 Figure 26: Secondary cost element............ 55 Figure 46: Internal orders ............. Heimo H.......... 41 Figure 31: Planning overview cost center cafeteria: SAP system screenshot ............................................ 45 Figure 36: Planning overview cost center maintenance: SAP system screenshot ............ 50 Figure 42: Expenses cost center cafeteria: SAP system screenshot ........................................................... 25 Figure 17: Posting logic ......................................................... 2006 .................................................................................................................................................................... 18 Figure 10: Standard hierarchy: all cost centers per controlling area ........................... 42 Figure 33: Planning overview cost center manufacturing: SAP system screenshot ... 12 Figure 4: Typical tasks in management accounting ...................................................................................................... 27 Figure 20: Postings from materials management to a cost center ............... 10 Figure 2: Comparison of financial accounting and management accounting .......................Integrated business processes with SAP ERP Table of figures Figure 1: Process overview: Management accounting ..........................0)........................................................... 43 Figure 34: Overview cafeteria assessment . SAP-Hochschulkompetenzzentrum Magdeburg........-Wirt... ......................................................................................................................................-Wirt........................................................................................ 70 Figure 57: Integration planning in profit center accounting...... 64 Figure 54: Plan/actual comparison cost center accounting: SAP system screenshot ................................................. 84 Figure 71: New product cost estimate Speedstarlett: SAP system screenshot .......................................... 71 Figure 59: Process overview: Profit center accounting ......... 72 Figure 60: Typical questions in profitability analysis ...................................................................... 57 Figure 49: Commitment ... 80 Figure 67: Price update ..................... Adelsberger/Dipl............................................................................ 77 Figure 64: Overview of product cost accounting (1) ............................................. 82 Figure 69: Integration: Standard price and plan price ...................... Heimo H............................................................Integrated business processes with SAP ERP Figure 48: Posting to an internal order ............................ 58 Figure 50: Order settlement................................................................................................................................................................................................-Wirt........... Taymaz Khatami ........... 86 page 6 Copyright Prof......................................................................................................................................................... 81 Figure 68: Material master: Prices ......................... 69 Figure 56: An internal perspective of profit center accounting .................................. 75 Figure 62: Profitability analysis per market segment................................................ Pouyan Khatami/ Dipl........ 59 Figure 51: Process overview: Internal orders ............................. 70 Figure 58: Advantages of profit center accounting .................................. 83 Figure 70: Process overview: Product cost accounting ............................... 80 Figure 66: Cost rollup in product cost planning .................................-Inf........ Dr.......... 60 Figure 52: Report for internal order/commitment: SAP system screenshot .................................................................................................. 62 Figure 53: Expense posting maintenance and manufacturing: SAP system screenshot ...........................................................................................................-Inf. 74 Figure 61: Profitability segment ......... 66 Figure 55: Typical questions in profit center accounting ..... 76 Figure 63: Process overview: Profitability analysis .......................... 79 Figure 65: Overview of product cost accounting (2) ................. if not labeled else wise.-Wirt.-Wirt. Pouyan Khatami.-Inf. Adelsberger/Dipl. Taymaz Khatami . Dipl. and Dipl. All figures used within this course are created in the style of TERP10. Pouyan Khatami/ Dipl. Those parts are subject to the copyright of SAP AG. Heimo H. page 7 Copyright Prof.-Wirt. Heimo H. Dr.-Inf. are subject to the copyright of SAP AG. Taymaz Khatami. All screenshots used within this document. Distribution and reproduction of this document or parts of this document in any form is prohibited without the written permission of Prof.Integrated business processes with SAP ERP Copyright - This document is mostly based on publications for the TERP10 course “mySAP ERP – integrated business processes“– those parts are subject to the copyright of SAP AG.-Wirt. Dr. Adelsberger.-Inf.-Inf. even if displayed in extracts. you will be able to: . Thus. Help) to display further information and explanations regarding the particular processes. When you are a bit more experienced using the SAP system. Since we arranged the case studies neatly.-Inf. introduction chapter.1 Unit objectives “management accounting in SAP ERP“ This unit aims at giving you an understanding of management accounting in the SAP ERP system. Pouyan Khatami/ Dipl. Please read the case studies and advises carefully. you should regularly use the F1 and F4 help functions as well as the SAP online library’s help menu (cf. you will quickly understand the structure and logic of SAP ERP. Please unconditionally use the SAP Easy Access Menu instead to the transaction codes. Adelsberger/Dipl. you should try to get a profound knowledge using the F1 and F4 keys regarding the meaning of the particular fields and entries. Your knowledge about help options and further documentation is to enable you to mostly discover the complexity and potential of the system independently – albeit you have to study with given scenarios. Taymaz Khatami . Dr. Heimo H.name the organizational structures and master data used in management accounting .-Inf. At the conclusion of this unit. since careless mistakes causing huge problems happen quite often. Thus. it is advisable to use the transaction codes. not all entries that you need to enter on the different screens can be explained in detail.name other SAP processes whose data is posted in management accounting Note: It is vital for the successful completion of this case study that you are familiar with the navigation basics in SAP ERP systems (cf. Try to clarify at each step what is done and why it is done.-Wirt. This includes that you are able to handle the SAP Easy Access Menu as well as an understanding of the SAP transaction concept.explain the functions of the individual components in management accounting . Therefore. unit Introduction/Navigation).Integrated business processes with SAP ERP 1 Introduction: Management accounting in SAP ERP 1. page 8 Copyright Prof. Note: Please avoid to merely clicking through the described steps of the case studies without thinking carefully about what you are doing to make sure you achieve sustained learning success.-Wirt. you will firstly focus on cost center accounting. Based on this. you will run profit center reports. Dr. carry out planning on these cost centers and subsequently.2 Scenario In the practical application of this unit. and profitability segment reports. Pouyan Khatami/ Dipl.-Wirt. market reports. record actual costs.Integrated business processes with SAP ERP 1. you will create a new work center and blend it in your work center for the production of the Speedstarlett. You will create own cost centers. page 9 Copyright Prof. you will perform a new product cost calculation.-Inf.-Wirt. In product costing. The color-coding shows that there are some integration points with other SAP components that you are already familiar with. In the internal order section. Adelsberger/Dipl. The following figure visualizes the entire process that you will carry out independently using the SAP ERP system in the practical application chapters of this unit. you will create an internal order and use it as cost object in commitment management and for activities of your cost centers.-Inf. Subsequently. Heimo H. Taymaz Khatami . Integrated business processes with SAP ERP Figure 1: Process overview: Management accounting page 10 Copyright Prof.-Wirt.-Inf. Pouyan Khatami/ Dipl. Taymaz Khatami . Dr.-Wirt. Heimo H.-Inf. Adelsberger/Dipl. . costs from overhead cost controlling (CO-OM) and product cost accounting (COPC) can be considered in the profitability analysis (CO-PA).-Inf.Integrated business processes with SAP ERP 2 Management accounting with SAP ERP 2. It covers all aspects of management controlling and provides numerous tools for compiling information for the management.e. similar to legal requirements that are set by relevant financial authorities.1 Comparison of financial accounting and management accounting Management accounting in SAP ERP consist of all functions required for effective controlling of expenses and revenues.1 Theory – Overview of management accounting 2. which are created in financial accounting. working hours) between these components. Figure 2: Comparison of financial accounting and management accounting 2. These costs can be transferred to a production order as an overhead allocation. Dr.g. Likewise. Taymaz Khatami . management accounting consists of several components. Adelsberger/Dipl. The black arrows between the individual components visualize the typical flow of cost and activity quantities (e.. i. External reporting requirements are determined by general accounting standards. Heimo H.-Wirt.2 Architecture of management accounting As you can see from the following figure. Pouyan Khatami/ Dipl.1. such as GAAP (generally accepted accounting principles) or IAS (international accounting standard). personnel costs can be calculated by multiplying the number of hours by a particular hourly rate.-Wirt.1. in which they are used in page 11 Copyright Prof. External reporting requires financial reports such as balance sheets and P&L statements. Costs can also be charged as overhead to the same production order as working hours.-Inf. It is often difficult to determine the cause of overhead costs. Other SAP components such as human capital management or logistics (materials management. . Heimo H. Activity-based costing (ABC) features additional options of cost allocation. Other SAP ERP components can post expenses or revenues to management accounting. raw material costs incurred in the production process are recorded here. There are also cost flows between financial accounting and CO-PC. .Integrated business processes with SAP ERP combination with the revenue data for determining the operating results. Dr.1. Overhead costs include all costs that cannot be assigned directly to a product of service. sales and distribution. Postings to an expense account in financial accounting can for example lead to a posting in CO-OM. Pouyan Khatami/ Dipl. financial accounting can post revenues to CO-PA directly. Figure 3: Architecture of management accounting 2.Classification of costs and reconciliation of data – Costs and revenues posted in management accounting are classified using cost element accounting. if production costs were activated as a finished product or WIP (work in process). you can determine how profitable the various areas are.Evaluation of costs for goods or services – In product cost accounting. the costs of goods manufactured and the costs of a service or for carrying out a project (planned and page 12 Copyright Prof. Likewise. Moreover.3 Typical tasks in management accounting The main components of management accounting are used for different tasks and evaluations: . there is a cost flow back to financial accounting. Taymaz Khatami .-Inf.-Wirt.Controlling overhead costs and allocation of costs – the task of overhead cost controlling is to record the origin of costs in the functional areas of a company.-Inf.-Wirt. Thus. production planning) are linked to management accounting as well. Adelsberger/Dipl. Cost element accounting also allows for cost reconciliation between financial accounting and management accounting. The cost centers can then transfer the costs to other cost centers. Along with direct postings from financial accounting. orders.1. you can analyze company activities and their effects on external markets (not company-internal). Cost objects such as production orders can receive direct postings from financial accounting. Evaluation of individual profit center success – profit center accounting analyzes the success of profit centers in a company. settled costs from internal orders as well as costs transferred from activity-based costing. cost settlements of internal orders. Profitability analysis – using profitability analysis.g.4 Value flow in management accounting Costs incurred in a business area often need to be transferred to a different area.. or other internal orders. page 13 Copyright Prof. Taymaz Khatami . This component determines the company success and the development of the profitability in different market segments (e. Profit center accounting contains statistical cost postings from all other management accounting components. and production variances settled from cost objects. Internal orders can transfer costs to cost centers.Integrated business processes with SAP ERP - - actual) are calculated and valuated. Dr. For example. Heimo H. The components of profitability accounting are also closely linked to overhead cost controlling and product cost controlling.-Inf. Activitybased costing can in turn transfer costs to cost centers and orders. These costs are then in turn transferred to the production process.-Wirt. processes in activity-based costing. overhead costs of administrative cost centers can be transferred to production cost centers. you can represent the internal market of the company. product divisions). There can be central cost flows between overhead cost accounting and product cost controlling. Adelsberger/Dipl. especially if you use multiple valuation methods and transfer prices. or processes in activity-based costing (ABC).-Wirt. costs from cost centers. internal orders. Pouyan Khatami/ Dipl. Within overhead cost controlling. and processes from other SAP ERP components (external costs). costs can be posted to cost centers. Figure 4: Typical tasks in management accounting 2. Thus. profitability analysis can also receive cost assessments from cost centers and activity-based costing processes.-Inf. This component provides tools for and encompassing analysis of value-adding processes in a company. -Wirt. Finally. Moreover.1. page 14 Copyright Prof. a goods issue can trigger a cost posting in management accounting to the stated cost object. or depreciation postings from asset management. Financial accounting (FI) in SAP ERP is the main data source for management accounting. Pouyan Khatami/ Dipl.-Inf. Product cost calculations created in management accounting affect the price fields in material master records directly.Integrated business processes with SAP ERP Figure 5: Value flow in management accounting 2. In materials management (MM). BOMs and routings created in production are used in product cost accounting for material cost calculation. Adelsberger/Dipl.-Wirt. The costs of this cost center can later be transferred to a production cost center as overhead. These expense postings in the general ledger can be journal postings. Most expense postings in the general ledger result in a cost posting in management accounting. For example. planned personnel costs can be transferred and can be used for planning in management accounting. Heimo H. vendor invoices. when a non-stock item is purchased by a cost center. Sales order management (SD) is the main source for posting billing documents to revenue that are reflected in profitability analysis (CO-PA) and profit center accounting (PCA). This expense is then also posted to the cost center that caused the purchase. this results in posting an expense to the general ledger. Human capital management (HCM) can lead to cost postings in management accounting.-Inf. commitment postings can be created in management accounting by the creation of purchase orders in materials management. The manufacturing area (PP) of logistics features an interface with management accounting as well. Taymaz Khatami . HCM allows for transferring labor costs to different controlling objects.5 Integration with other SAP ERP components Transactions carried out in other SAP ERP components can directly affect management accounting. Dr. -Inf.-Inf. Adelsberger/Dipl.Integrated business processes with SAP ERP Figure 6: Integration with other SAP ERP components page 15 Copyright Prof. Pouyan Khatami/ Dipl. Dr. Taymaz Khatami . Heimo H.-Wirt.-Wirt. A controlling area represents a closed entity for cost accounting.Integrated business processes with SAP ERP 2. The currency of a controlling area can be the same as the currency of one company code. To allow for a cross-company code allocation. Heimo H. A sales organization is an organizational unit used in sales order management. you can assign several company codes to a controlling area. In cross-company code controlling. A company code is an independent accounting unit. not suitable for auditing).-Wirt. Using business areas (BA). Taymaz Khatami . page 16 Copyright Prof. A purchasing organization is an organizational unit used in materials management (purchasing). The operating concern controls profitability analysis (CO-PA) and represents the structure of the external market segments of a company.2 Theory – Organizational levels in management accounting A controlling area is the basic organizational unit in management accounting. You can assign several controlling areas to one operating concern and thus allow for a common analysis. A plant is the production unit and represents the central organizational unit of materials management and production planning.-Inf. Costs can only be allocated within a controlling area. Adelsberger/Dipl. balance sheets and P/L statements are created. on its organizational level. However. you can group the strategic business units for balance sheets and P/L statements (only for reporting. A plant is always assigned to a company code. You can assign values in management accounting that affect more than one company code. Figure 7: Organizational levels in management accounting Multiple assignments To allow for a common cost accounting for multiple company codes. You can assign several company codes to a controlling area. Pouyan Khatami/ Dipl. the controlling area and the company codes can use different currencies. which allows for cross-company code allocation.-Inf. Business areas can also be crosscompany code. Objects in other controlling areas cannot be included in this allocation. the controlling area and the company codes must have the same operating chart of accounts and feature the same fiscal year variant (only the number of special periods can vary). This fulfills the legal requirements for accounting.-Wirt. Dr. it can also differ from all company codes. all companies of the controlling area must use the same operating chart of accounting. In case several company codes are assigned to a controlling area.the company code and object currency . In case only one company code was assigned to a controlling area. Adelsberger/Dipl.the transaction currency (for posting a document in management accounting) The default settings in cross-company code controlling displays the company code currency as object currency. Heimo H.-Wirt. Dr.-Wirt.-Inf.. This setting cannot be changed. These accounting can however be linked to country-specific accounts using the account master data record in which the alternative account number is stored to meet country-specific requirements. a cost center) if required. Pouyan Khatami/ Dipl.Integrated business processes with SAP ERP You can use three types of currencies in management accounting: .the controlling area currency . Taymaz Khatami .g.-Inf. Figure 8: Multiple assignment page 17 Copyright Prof. you can assign the object currency to each controlling object (e. Occurring costs are then assigned accordingly to the page 18 Copyright Prof.-Inf. they allow for a differentiated controlling of costs occurring within a company (cost control function). Thereby. Expense accounts to which costs are posted for cost accounting purposes must be created simultaneously in management accounting. The purpose of cost centers is to allow for a differentiated assignment of overhead costs to activities in comparison to usage of the relevant areas (cost determination function). Using cost center accounting (CO-OM-CCA).3. all expense accounts are grouped in a class (class 4) and all revenue accounts are grouped in a different class (class 8).-Inf. and/or responsibility-related characteristics. Thus.g. you can ensure that all postings that are primary costs and are posted to this type of expense account are simultaneously considered in management accounting.-Wirt. Adelsberger/Dipl.Integrated business processes with SAP ERP 2.3.. Secondary cost types do not have corresponding G/L accounts in financial management.2 Standard hierarchy: all cost centers per controlling area A cost center is an organizational unit within a controlling area that represents a clearly delimited location of cost occurrence. there is one cost center for each lowest-level organizational unit that is in charge of cost management. Usually. This delimitation can follow functional. A cost center is an organizational unit within a controlling area. spatial.-Wirt. Figure 9: G/L accounts and cost types 2. Secondary cost elements are exclusively defined in controlling and used for company-internal transfers (e.1 G/L accounts and cost types The chart of accounts of a company code is created in financial accounting. Dr. Moreover. you can check where costs occur in a company. settlementrelated. There are different ways to set up cost centers. Pouyan Khatami/ Dipl. Taymaz Khatami .3 Theory – Cost center accounting 2. assessments or settlements). Heimo H. Integrated business processes with SAP ERP respective cost center that caused the costs. Activity types are tracing factors for this cost allocation. e. The costs of these resources must be allocated to the activity receiver. Pouyan Khatami/ Dipl. rent and utility cost. For internal activity allocation. for other cost centers. Taymaz Khatami . Adelsberger/Dipl. Setting up cost centers can be based on several criteria. You can enter up to eight allowed cost center typed in the master record of the activity type. This includes amongst others: . Posting costs to cost centers and assigning costs to cost centers does not only allow for management accounting. you must include the allowed cost centers in the master record of the activity type. Dr. or other costs relevant to the cost center.3 Activity types An activity type classifies the activities that are performed in a company by one or multiple cost centers. The corresponding costs are calculated by the system using the activity price and a debit to the receiver and a credit to the sender is created concerning quantity and costs. The internal activity is allocated using secondary cost types.-Wirt. Using an activity type can be restricted to particular cost center types.. If activities are performed by cost center within a company. orders.functional requirements .g.-Inf. Figure 10: Standard hierarchy: all cost centers per controlling area 2. Heimo H. resources of the cost center are consumed. or processes. which are stored in the master data of the activity types as default values. This assignment can page 19 Copyright Prof. Thereby.3.allocation criteria .-Inf. but also provides a vital prerequisite for using the other controlling components.activities or services .-Wirt. These costs include payroll costs.geographical aspects or responsibilities The chosen method should be applied to the entire company consistently. the activity quantity performed by a cost center such as the number of consulting hours is entered either manually or automatically in the system. Pouyan Khatami/ Dipl. Figure 11: Activity types 2.-Wirt. This procedure is applicable if price calculation is structured simply. SAP ERP values the amount of activity allocation using the sender price for the activity type. Either you can enter the planned price manually or it can be calculated automatically by the system within planning. Heimo H. page 20 Copyright Prof.3. To run cost and activity allocation. This setting is carried out in SAP ERP by planning activity output/prices for a cost center. or if a rate depends on prices of external suppliers and not on the costs of a cost center. the SAP system values the price specified by the sender for this activity type. a combination of “cost center/activity type” is used for the calculation of this planned price. In direct activity allocation.4 Relationship between cost center and activity type To run internal activity allocation.Integrated business processes with SAP ERP also be carried out “unrestricted” by entering a star (*) into the respective field of the activity type. you need to determine.-Inf.-Inf. you should use this procedure if prices required for rates are determined within a company and are not depending on internally produced activities. For example. Dr. To allow for cost and activity allocation. Adelsberger/Dipl. Taymaz Khatami . In direct activity allocation. SAP provides you with encompassing features. which cost centers provide which activity type at what price.-Wirt. the activity quantity to allocate is entered manually. profit centers.A total value is not transferred to the subsequent period but needs to be entered for each period.. You only need to post a new statistical key figure when the value changes. Dr. This is realized by linking a key figure from the LIS with a key figure in cost center accounting. This procedure is used for key figures that change from period to period (e.5 Statistical key figures Statistical key figures define measurable values that can be applied to cost centers.-Inf. There are two types of statistical key figures in the SAP ERP system.g. or for analyses purposes (e. number of employees). Taymaz Khatami . Adelsberger/Dipl. Statistical key figures can also be copied from the logistics information system (LIS). internal orders. This includes for example: . . electricity consumption in kilowatt-hours). This procedure is used for statistical key figures that are usually constant over a certain period of time (e. or processes. .Integrated business processes with SAP ERP Figure 12: Relationship between cost center and activity type 2.-Wirt. Pouyan Khatami/ Dipl. Statistical key figures can be considered as allocation basis (“tracing factor” in CO terminology) for periodic transactions such as distribution or assessment..g.g.A fixed value is transferred to all subsequent periods by the period in which it was posted.the total number of employees in a cost center..-Wirt. Statistical key figures can be defined as either fixed values or total values: .-Inf. or . Heimo H. for calculating rent per employee).long-distance calls (measures in minutes).the number of employees that perform vehicle repairs in the transportation cost center Statistical values can be posted both as planned and actual values. page 21 Copyright Prof.3. etc.. each hierarchical level can automatically create the totals for the subsequently lower level. you can group master data (cost center. allocations. The SAP system ensures that a value (cost center. etc. activity type.) of management accounting.3. The standard hierarchy for a cost center is a special type of cost center group. You can create as many different groups as required.) only appears once in a group. Dr. The master data themselves are assigned to the lowest level node in the structure. Thus.-Wirt. If you for example create a cost center group called tools management. Each controlling area must feature a unique standard hierarchy. Heimo H. If master data groups are for example used in reporting. several functions for these objects such as analyses. you cannot use this name for a different group. Pouyan Khatami/ Dipl. Taymaz Khatami . Adelsberger/Dipl. etc. Each name (description) of a master data group can only be used once per client.-Wirt. cost type.-Inf. All cost centers of this controlling area must be assigned to a node of this standard hierarchy.6 Master data groups In master data groups. transfers. page 22 Copyright Prof. can be carried out collectively.Integrated business processes with SAP ERP Figure 13: Statistical key figures 2.g. You can use each value (e. activity type. activity type) in more than one group.-Inf. cost type. page 23 Copyright Prof.-Wirt. or statistical key figures).. Dr. you plan based on absorption costing. Within the framework of distributions and assessments.e. Planned values (such as planned personnel costs or planned depreciations) can be transferred directly from human resources and assets accounting (FI-AA) to the cost centers. The closing of cost center planning concludes thus price determination for the activities of the cost centers. Heimo H. Cost center planning aims at determining planned costs for a later deviation analyses as well as prepare allocation to cost bearers. i. Taymaz Khatami . The advantage of this procedure is that it is easy to manage: the keys as well as sender-receiver relationships are only defined once. you try to further allocate all costs in the overhead costs area using different procedures to the cost bearers in a company. Activity quantities can either be determined manually or copied from other components such as production planning (PP).-Inf. Pouyan Khatami/ Dipl. You can plan both fixed and variable costs for each area of responsibilities. costs planned at a cost center can be allocated according to user-defined keys (e. The price per cost center/activity type is entered with manually or is calculated automatically according to automatic price calculation based on planned costs. Since the activity amount is valued with this price. there is a combined quantity and value flow resulting from activity allocation. Separation allows for debiting cost centers with calculatory costs. percentages. Adelsberger/Dipl.-Wirt. Usually. amounts.3.g.7 Cost center planning Cost center planning can be carried out either manually or by an automatic procedure such as formula planning.e. for each cost center. i.Integrated business processes with SAP ERP Figure 14: Master data groups 2.-Inf. Activity type planning is an important step in cost center planning since planned activity quantities can influence planned costs.. Cost planning is carried out for cost centers and internal order. Scheduled activities are then transferred to cost center planning. which initiates the whole planning process again.3.8 Integrated planning process in the SAP ERP system You can plan sales quantities on product or product group level using the sales information system (SIS). Dr. the sales plan is created. the manufacturing costs of planned products are calculated using BOMs and routings.-Inf. The results of this plan can be used for correcting the original sales plan. Activity requirements can be created in sales and operation planning or in long terms requirements planning. Thereby. Adelsberger/Dipl. In product cost planning. The calculated planned costs are entered in product cost planning. You can create planned activity quantities based on scheduled activities from sales and operations planning in cost center planning. you can plan sales quantities in profitability analysis (CO-PA). planning of additional activities is carried out for overhead cost controlling. Based on these costs (as well as the planned revenue). If not sufficient resources are available. additional resources need to be produced or the sales plan needs to be changed. Planned costs from the human capital management (HCM) and asset accounting (FI-AA) components can be transferred to cost center planning. In sales and operations planning. sales plans are compared with each other and allow thus for transferring a single forecast to sales and operations planning. the costs of manufactured goods are then transferred to profitability analysis. The determination of planned costs closes cost center planning.-Wirt.Integrated business processes with SAP ERP Figure 15: Cost center planning 2. Similarly.-Inf.-Wirt. Taymaz Khatami . Heimo H. Pouyan Khatami/ Dipl. Based on the sales plan. a capacity-based comparison of required and actual resources is carried out. page 24 Copyright Prof. Dr. Pouyan Khatami/ Dipl. There is no corresponding credit posting in the accounting document. Note: All transactions that result in cost movements in financial accounting are balanced postings. Contrastingly.-Wirt. When costs are transferred from one controlling object to another one. Taymaz Khatami .-Inf.Integrated business processes with SAP ERP Figure 16: Integrated planning process in the SAP ERP system 2. they are initially treated as one-sided journal entries.posted amount In the example shown in the figure below. a financial accounting document posted to a P/L account and credited a balance sheet account.accounting object to which was posted .-Wirt.used cost element .3. Adelsberger/Dipl.9 Posting logic When creating a financial accounting document that posts a corresponding cost element to a expense or revenue account. This accounting document contains a unique number as well as the following entries: . in contrast to a conventional balanced financial accounting journal posting. Heimo H. When posting primary costs in financial accounting. page 25 Copyright Prof. a document is creates in management accounting simultaneously. the sender object is credited and the receiving object is debited by the same amount. the accounting document debits the controlling object using the corresponding primary cost element with the same number.-Inf. Taymaz Khatami . real internal orders. Statistical controlling objects include statistical orders.3. Pouyan Khatami/ Dipl.-Inf. and profit centers. Real postings can be settles with other objects of financial management. Figure 18: Real and statistical objects in management accounting page 26 Copyright Prof.Integrated business processes with SAP ERP Figure 17: Posting logic 2. Heimo H.9. networks. Statistical objects cannot allocate costs to other objects. Real objects can be used as sender or receiver object in cost allocation.-Wirt.-Wirt. make-to-order production orders.1 Real and statistical objects in management accounting Posting of costs and revenues in management accounting can lead to real or statistical postings. Adelsberger/Dipl. statistical projects. Statistical account assignments can be carried out on any number of cost accounting objects. or profitability segments. real projects. Dr. Examples of real objects are cost centers.-Inf. Statistical postings are merely used for information purposes and are usually used in analyses. form a cost center to another one. a valid controlling object (such as a cost center) must be determined for the expense line item.the used cost element. Figure 19: Postings from financial accounting to a cost center page 27 Copyright Prof. Primary costs are treated as one-sided journal entries when posting them. the controlling document debits the controlling objects using the respective primary cost element with the same number.the amount In the following example.Integrated business processes with SAP ERP 2. you can access each documents from the other one.-Inf. each with a unique document number. No corresponding credit entry is made in the controlling document. the sender object is credited and the receiving object is debited with the same amount. When costs are transferred from one controlling object to another one. procedures initiating these cost flows are balanced postings.9. Heimo H. This controlling document features an own. Pouyan Khatami/ Dipl. Taymaz Khatami . system-assigned number and contains the following information: . Using the drill down functionality. Note: Since all subsequent cost movements are carried out in CO. In addition. which is posted to an expense or revenue account with a corresponding cost element. Dr. as opposed to traditional balanced financial accounting journal entries. Contrastingly.2 Posting from financial accounting to a cost center When creating a journal posting in financial accounting. and . a cost accounting document in CO is created.-Wirt.-Wirt. if . for example.the FI line item refers to a valid cost center The result is the creation of two separate documents.the controlling object to which posting is carried out. this expense can be posted as costs to management accounting. Along with the accounting document in FI. a controlling document is created.-Inf.3. When creation a financial accounting document. the FI document debits the P&L account and credits a balance sheet account. Adelsberger/Dipl. .a primary cost type was created in controlling that corresponds to the expense account used in the FI journal posting and . you must enter the cost center that provides the activity (sender cost center) and the object that receives the activity (receiver). The corresponding (measurable) tracing factors in the SAP system must be created. The cost center is debited by the amount of the goods issue using a primary cost element. For example. a movement type must be entered to differentiate between the different goods movement types. From a cost center point of view. Pouyan Khatami/ Dipl. project.3 Postings from materials management to a cost center Goods issues that are posted in materials management can be assigned to a cost center. Figure 20: Postings from materials management to a cost center 2. etc. Moreover. to be transferred to a R&D cost center. you refer to these tracing factors as activity types. this procedure is referred to as material consumption. posting. In cost center accounting. To enter a direct activity allocation.g. Heimo H. you can post costs for parts that are used in the R&D department for constructing a prototype.-Inf. page 28 Copyright Prof. A goods issue to a cost center initiates an operation in financial accounting resulting in debiting an expense account with the material consumption and crediting a material stock account. Taymaz Khatami . A movement type is an indentifying key that has an important functionality in inventory management such as updating stock and consumption accounts.-Inf. Dr. Adelsberger/Dipl. You can only assign one cost center as sender in internal activity allocation.3. Any management accounting object can be the receiver (e.-Wirt. When a goods issue is entered in the system.). order.Integrated business processes with SAP ERP 2.. an activity type must have been created. you need to specify which cost centers are supposed to deliver which activity amounts in direct activity allocation. the type (activity type) and the delivered activity quantity.10 Direct activity allocation Direct activity allocation focuses on measuring.9. This is done using the planning activity output function. For direct activity allocation.3.-Wirt. cost center. and allocating an organizational activity. Figure 21: Direct activity allocation 2.receiver cost center “administration“ occupies 40 m² floor space .the total floor space is 400 m² . Crediting and debiting is carried oust using a secondary cost element with category 43. Adelsberger/Dipl.Integrated business processes with SAP ERP In activity allocation.3.-Wirt. Heimo H.11 Periodic allocations with sender/receiver relationships The following example of a sender/receiver relationship within an allocation cycle applies also to periodic repostings.material costs = (40/400) * 3000 = 300 .receiver cost center “Production „occupies 360 m² floor space . Pouyan Khatami/ Dipl. Allocation is based on an appropriate tracing factor (a user-defined key for determining cost and quantity allocations for periodic allocations (here: a statistical key figure for the number of m² floor space that each receiver cost center uses). Dr.-Inf. the allocated costs for “administration” amount to: . Crediting and debiting is carried out for performed activities multiplied by the activity price.-Inf.wages costs = (40/400) * 4000 = 400 page 29 Copyright Prof. distributions. Taymaz Khatami . and assessments. the sender cost center is credited and the receiver cost center is debited. In the subsequent example. the sender cost center has costs that are supposed to be allocated to the receiver cost center.-Wirt. The direct activity allocation is posted by line items on the sender and receiver sides. The cost element used for direct activity allocation is derived from the master data of the activity type.thus. you can calculate the costs that are supposed to be allocated to each receiver cost center using this key as follows: . In the allocation cycle. The cost element cannot be changed during allocation. Adelsberger/Dipl. The allocation structure can be stored during segment maintenance. Alternatively. page 30 Copyright Prof. In assessment allocation. or a business process. In the subsequent example.-Inf. For detailed documentation of allocation both sender and receiver sides record line items. a cost bearer. only cost centers or business processes can serve as sender. All costs allocated in an assessment are identifiable on the receiver(s) with these assessment cost elements. The allocation using assessment procedures is useful if a cost breakdown is not necessary for the receiver. Heimo H. The number of allowed receiver types can be restricted in customizing. a WBP element. indirect activity allocation. or cost element intervals to an assessment cost element. the allocation rule uses statistical key figures for calculating each allocating amount for the individual receivers. Dr. An assessment cost element is assigned to each segment of an assessment (secondary cost element category 42). an assessment updates the total amount record of the partner.-Wirt. Pouyan Khatami/ Dipl. an internal order. you can also define an allocation structure regarding which cost elements are supposed to be allocated using which assessment cost elements. Depending on the individual requirements. Similar periodic allocations are distribution. periodic repostings. Similarly. Taymaz Khatami . and template allocation. The original cost elements are not displayed on sender side. The receiver of an assessment can for example be another cost center. An assessment can be repeated and reversed as often as desired. You can assign individual cost elements. to distribution. Primary and secondary costs are allocated at period-end closing according to the rules applicable to the assessment cycle. there are also other rules available.Integrated business processes with SAP ERP Figure 22: Periodic allocations with sender/receiver relationships Example of a periodic allocation An assessment is carried out for allocating primary and secondary costs from a sender cost center to a receiver controlling object. cost element groups.-Inf.-Wirt. -Inf.Integrated business processes with SAP ERP Figure 23: Example of a periodic allocation page 31 Copyright Prof. Taymaz Khatami .-Wirt. Pouyan Khatami/ Dipl.-Inf.-Wirt. Heimo H. Adelsberger/Dipl. Dr. Continue with or Enter. The new work center will also use the services of the maintenance department.-Wirt. The cost center category is service cost center (2). Moreover. Enter a description of your choice into the description field. the tasks derived from the objectives are as follows: . Figure 24: Process overview: cost center accounting – master data In sum. Enter validity period from 01 January of the current fiscal year until 31. 3.4. which costs they have to bear.1 Cost center: Cafeteria Choose the following transaction: Accounting  Controlling  Cost Center Accounting  Master Data  Cost Center  Individual Processing  Create (KS01) 1. 2. enter CC-CA-xyy. but the actual set up was postponed. the individual steps are exemplified using user 999. 2.12. If the system prompts you to enter a controlling area.1.4 Practical application – Cost center accounting The management decided after reviewing the calculation data. please enter CO Europe (1000). you ensure that the cost center does not become invalid during the company’s existence or the duration of this case study. Taymaz Khatami . Assign the cafeteria to your own hierarchical area from the page 32 Copyright Prof.applying internal cost allocation procedures .9999 (with a validity until year 9999. Heimo H. In the subsequent section. respectively).-Wirt. This decision is in place for quite some time now. Enter name cafeteria-xyy. a new department is supposed to be set up that is in charge of technical maintenance of work centers and that is supposed to internally allocate its services with the other work centers. the two new work centers receive an own cafeteria. Enter your name into the name of person responsible field.Integrated business processes with SAP ERP 2. Dr.-Inf.1 Cost centers The cost centers you need to create are the two service cost centers cafeteria (CC-CA-xyy) and maintenance (CC-MT-xyy) as well as production cost center manufacturing (CC-MF-xyy). Please bear in mind to replace the string xyy with your user number when creating the cost centers.4. Confirm with or Enter. Additionally. Pouyan Khatami/ Dipl. final manufacturing is supposed to be carried out at a new work center. Adelsberger/Dipl.carrying out an example cost center planning .maintaining required master data in CO . to increase production efficiency of the Speedstarlett. In the cost center field. Therefore.integration with PP functional area 2.-Inf. -Inf. this is the basis for allocation cafeteria costs (see subsequent explanation). and assign the cost center to your profit center (PROFITxyy). Again.-Inf. Again. The name of the cost center is manufacturing-xyy and the description is an entry of your choice. enter your name into the name of person responsible field.1. Again.1. 2. Again. 2. Save the cost center. Enter cost center CC-MT-xyy.Integrated business processes with SAP ERP HCM case study (Hxyy). 3. Confirm with Enter. the cost center is valid from 01 January of the current year. Confirm with Enter. 2.2 Cost center: Maintenance If you are not already on the create cost center: initial screen. Pouyan Khatami/ Dipl. The costs of the cafeteria are supposed to be allocated to the manufacturing-xyy and maintenance-xyy cost centers. Hierarchical area is Hxyy. At the same time. The cost center is valid from 01 January of the current year.4. 3.4. 2. choose company code IDES AG (1000) and business area corporate/other (9900). create the following statistical key figure: Accounting  Controlling  Cost Center Accounting  Master Data  Statistical Key Figures  Individual Processing  Create (KK01) page 33 Copyright Prof. and assign the cost center to your profit center (PROFITxyy). Adelsberger/Dipl. 2.-Wirt. 4. choose the following transaction again Accounting  Controlling  Cost Center Accounting  Master Data  Cost Center  Individual Processing  Create (KS01) 1. Select cost center category production (1). Enter name maintenance-xyy and enter a description of your choice. Assign the cost center to your profit center (PROFITxyy). Select cost center category service cost center (2) and assign the maintenance cost center to hierarchical area Hxyy. Choose company code IDES AG (1000) and business area corporate/other (9900).4.2 Other master data: Statistical key figures Please create firstly the required statistical key figure EM-xyy. Enter CC-MF-xyy in the cost center field. The number of employees is a reference for cost allocation. choose company code IDES AG (1000) and business area corporate/other (9900). enter your name into the name of person responsible field. the EM-xyy key figure records the number of employees at the maintenance and manufacturing cost centers. call up the subsequent transaction: Accounting  Controlling  Cost Centers  Master Data  Cost Center  Individual Processing  Create (KS01) 1. Dr. In the management accounting case study. Heimo H. Taymaz Khatami . Save the cost center with or CRTL-s. Therefore. Again.-Wirt. Save the cost center.3 Cost center: Manufacturing Again. Secondary costs are costs for internally allocated services. In the new dialog. Pouyan Khatami/ Dipl.-Wirt. you create secondary cost elements. Dr. In contrast to primary cost elements. Please pay attention to the following discussion for further definitions (relevant to the final SAP certification exam!). for example: .assessment.g. page 34 Copyright Prof. secondary cost elements: As you already know. The cost element master record is stored using the same number as for the corresponding P&L account.overhead rates. 4. in overhead-cost management you differ between primary and secondary costs. Allocation of internal costs and activity flows is always carried out using secondary cost elements in SAP ERP. or . Primary vs. you will use the secondary cost elements for the cafeteria allocation (CAFxyy) and for allocating maintenance and manufacturing hours (MNT-xyy and MFT-xyy). If a corresponding screen appears.4.. activities allocated between cost centers. Confirm with or Enter.allocation of activities/processes Primary costs must always correspond to a P&L account in the chart of accounts in financial accounting.-Wirt. For allocating primary and secondary costs. All costs that are supposed to be allocated are posted with reference to a secondary cost element in this case study. Please note that you need to enter the controlling area in each query. Enter EM-xyy into the statistical key figure field. secondary cost elements do not have corresponding cost-relevant chart of account (P&L account with the same number). . Save the statistical key figure. Select key figure category fixed values. 2. enter controlling area CO Europe (1000).-Inf.3 Other master data: Secondary cost elements Note: In the subsequent section.e. . . i.-Inf. Taymaz Khatami . you need to store cost element master records in SAP ERP. 3.Primary costs are costs for services received from (external) third parties (e. It applies to the entire case study. The value-based posting for direct allocations of individual activity quantities between cost centers is also carried out with reference to a secondary cost element. Heimo H. enter name number of employees and enter the statistical key figure unit piece. vendors). They differ in their cost element categories. In this case study..internal settlement. Adelsberger/Dipl. 2.Integrated business processes with SAP ERP 1. A cost element classifies the purpose-related and valued consumption of production factors within a controlling area. . -Inf. 2006 Secondary cost elements concern internal allocations. Figure 26: Secondary cost element.4.-xyy and assign cost element category allocation of activities/processes (43). It is also valid from 01 January of the current fiscal year. They must not have a correspondent in financial accounting.Integrated business processes with SAP ERP Figure 25: Primary cost element. enter cost element MNT-xyy.3. It is valid from 01 January of this fiscal year. 2.3. Pouyan Khatami/ Dipl. SAP-Hochschulkompetenzzentrum Magdeburg. Dr. Enter name maintenance-all. Taymaz Khatami . Enter cost element CAF-xyy. 2006 2.2 Activity allocation of maintenance hours You are still on the create cost elements: initial screen (transaction code: KA06). Enter name assessment CC-CA-xyy and enter a description of your choice.-Wirt. 3. Using the help key F1. Please assign the cost element category assessment (42). 1.-Wirt. Confirm with Enter. you can display the meaning of the individual cost element categories in the SAP ERP system and what the categories are used for. Save the cost element. 2. page 35 Copyright Prof. SAP-Hochschulkompetenzzentrum Magdeburg. Adelsberger/Dipl.1 Cafeteria assessment Choose the following transaction: Accounting  Controlling  Cost Center Accounting  Master Data  Cost Elements  Individual Processing  Create Secondary (KA06) 1.0). Integrations-Fallstudie CO (mySAP ERP ECC 5. Heimo H. Confirm with Enter. Save your entries. Integrations-Fallstudie CO (mySAP ERP ECC 5. 2.4.-Inf.0). This time. 3. 4. Example: The cost center “energy” measures the actual output in KWh and charges this amount to the receiver cost centers. 2. This applies to all cost center types (select *or F4 and * all cost center types). manual allocation (1) and assign the recently created cost element MNT-xyy as allocation cost element..4.4. 2. 1.4 Other master data: Create activity types Your next task includes the creation of activity types (cf. Pouyan Khatami/ Dipl.MF-xyy: to allocate manufacturing hours provided by the manufacturing cost center. Enter name manufacturing-xyy and cost element category allocation of activities/processes (43).4. energy. Taymaz Khatami . Heimo H. Choose Enter. enter your data on the create cost elements: initial screen (transaction code: KA06).Integrated business processes with SAP ERP 2.2 Manufacturing hours To create the activity type: Accounting  Controlling  Cost Center Accounting  Master Data  Activity Type  Individual Processing  Create (KL01)) page 36 Copyright Prof. These are posted using the secondary cost element MF-xyy.-Wirt. It is valid from 01 January of this fiscal year.4. respectively. Save the cost element. 2.3 Activity allocation of manufacturing hours Again. choose the following transaction: Accounting  Controlling  Cost Center Accounting  Master Data  Activity Type  Individual Processing  Create (KL01) 1. Confirm with Enter. Adelsberger/Dipl.1 Maintenance hours To create the activity type.4. Dr. manufacturing hours. 2. The activity unit is hours (HR). Enter cost element MFT-xyy.).3.-Wirt. This activity type is supposed to be provided by cost center CC-MT-xyy or CC-MF-xyy. Definition: activity type An activity type refers to a particular activity provided by a cost center (e. . Enter name maintenance_hour-xyy.-Inf. There are two activity types used in this case study: . 2. Enter MT-xyy into the activity time field. These are posted using the secondary cost element MT-xyy. 3.-Inf. Choose activity type category manual entry. The validity period starts on January 01 of the current year.MT-xyy: to allocate maintenance hours provided by the maintenance cost center. subsequent definition). 3. reviewing hours etc.g. Activity types are always used if provided activities are entered on a quantitative basis and if they are supposed to be allocated individually. Save your activity type. g.5 Other master data: Cost center group for cafeteria assessment The last task in this section is to create the cost center group (see subsequent explanation). This group is the receiver object for the cafeteria assessment.-Wirt. 2. Taymaz Khatami .. 2. enter the cost centers CC-MT-xyy and CC-MF-xyy. e. choose the following transaction: Accounting  Controlling  Cost Center Accounting  Master Data  Cost Center Group  Create (KSH1) 1. and to combine receivers of an allocation. hierarchy. you need to combine the cost centers for manufacturing (CC-MF-xyy) and for maintenance (CC-MT-xyy) to a group. Enter receiver of cafeteria costs into the description field of the node Group-xyy. Cost center group: A cost center group is an organizational unit to combine several cost centers according to specific criteria. manual allocation (1) and assign the recently created cost element MFT-xyy as allocation cost element. page 37 Copyright Prof. Therefore. Enter MF-xyy into the activity time field. Click the symbol (insert cost center). Dr. The cost centers maintenance and manufacturing are combined in the cost center group Groupxyy within this case study. are charged against the cost elements MNT-xyy und MFT-xyy.4. The activity unit is hours. 2. Choose Enter.-Inf. Enter name manufactur_hour-xyy. In the left column. Name the group Group-xyy and confirm with Enter. Save with or CRTL-s. For comparison: Compare your entries with the following figure. You thus determined that the activity types maintenance hours and manufacturing hours. Choose activity type category manual entry.-Wirt. etc. The grouping of master data is frequently used in CO to facilitate mass-maintenance of master data. 3. for generating grouping stages in documents. This applies to all cost center types (select *or F4 and * all cost center types). Pouyan Khatami/ Dipl. type. Heimo H.-Inf. Save your activity type. The validity period starts on January 01 of the current year.Integrated business processes with SAP ERP 1. 3. To carry out assessment of cafeteria costs. to which you will later assign the cost centers maintenance and manufacturing and which will be later used to allocate the provided activities of the corresponding cost center. Cost center groups are thus a combination of several individual cost centers. Adelsberger/Dipl. Integrated business processes with SAP ERP Figure 27: Create cost center group: SAP system screenshot You now created the structure for assessing the cafeteria costs later. This task consists of several steps that are visualized in the following figure. . . but the receiver is entered for the entire group.-Wirt. In the previous sections.6 Carry out cost center planning Next. you will carry out cost center planning. which is the cost receiver for the cafeteria costs and which contains the corresponding cost centers maintenance and manufacturing.Planning You created: . Figure 28: Process overview: Cost center accounting . In the following sections.-Inf.-Wirt.The cost center group Group-xyy.The secondary cost elements MFT-xyy and MNT-xyy that are used to allocate your activity types as well as the cost element CAF-xyy to assess cafeteria costs.The statistical key figure number of employees (EM-xyy) that you can use to assign the number of employees to the respective cost centers (manufacturing and maintenance) so that you can use this number as basis for cafeteria cost assessment.The activity types MF-xyy and MT-xyy that are used to describe the provided activities of the two corresponding cost centers. page 38 Copyright Prof. . it is no longer required to enter individual cost receivers. Taymaz Khatami .4. you will merge these components and fill the result with concrete numbers. Dr. Pouyan Khatami/ Dipl. 2. you created the basis for your cost allocation. At the time of cafeteria cost assessment. Adelsberger/Dipl. The allocation base is the number of employees of the corresponding cost centers. Heimo H.-Inf. will get five new employees. The overall period reaches from period 1 until period 12 of the current fiscal year. Repeat operation step 1 and 2 for cost center CC-MT-xyy. i. Choose Version planned/actual (0).6. 3. Adelsberger/Dipl. Post this planning as well.-Wirt. Enter the current planned value 20 and post with or CRTL-s. The employees work 2000 hours a year each.4.1 Planning the number of employees The management and the marketing department predict sales of 15000 units of the Speedstarlett for the first fiscal year of its launch. Heimo H. Cafeteria services are provided externally. the required employees are not considered in cost calculation and therefore not created in the system. 2.6. Choose the following transaction: Accounting  Controlling  Cost Center Accounting  Planning  Set Planner Profile (KP04) Select profile SAPALL and click save user master record and confirm with the green checkmark. Call up the following transaction: Accounting  Controlling  Cost Center Accounting  Planning  Activity Output/ Prices  Change (KP26) page 39 Copyright Prof. 20 new employees are hired for the manufacturing cost center.-Inf. Note: Pay attention to entering the correct combinations of activity type and cost centers in the following sections. Thus.Integrated business processes with SAP ERP 2. which is not only in charge of maintaining manufacturing machines but is also supposed to support other business areas. please make sure that the planner profile SAPALL was selected. Taymaz Khatami .e. Then. You can see the statistical key figures standard screen (1-301). the overall performance is 10000 hours (maintenance) and 40000 hours (manufacturing)." 4.4.-Inf. Since cafeteria services are procured externally. via external procurement.-Wirt. Ensure that all other fields are empty. Carefully read the instructions since careless mistakes happen quite often. The system issues the confirmation "changed data posted. To fulfill the management’s demand. 2. Pouyan Khatami/ Dipl.e. i. Note: Before you continue. there is no activity output planned. click the symbol (overview) or press F5. Enter cost center CC-MF-xyy and statistical key figure number of employees (EM-xyy). The maintenance cost center. Enter the current planned value 5.2 Planning activity output In this section. Dr. Select form-based entry from the bottom of the screen. you will plan the total output of maintenance and manufacturing. Call up the following transaction to enter the employee numbers: Accounting  Controlling  Cost Center Accounting  Planning  Statistical Key Figures  Change (KP46) 1. Pouyan Khatami/ Dipl. You can now see the cost elements activity dependent/ activity independent screen (1-101). and fiscal year do not contain the entries of the previous task.-Inf. Again.4.-Wirt. Call up the following transaction: Accounting  Controlling  Cost Centers  Planning  Costs/Activity Inputs  Change (KP06) 1. i. 3.-Inf. and fiscal year do not contain the entries of the previous task.e. This time. 4. with a fixed and a variable price.-Wirt. and the manufacturing wages amount to 600000 EURO. 2. Correspondingly. On the overview screen (F5). page 40 Copyright Prof. Repeat the procedure for cost center CC-MF-xyy with activity type MF-xyy. Figure 29: Overview primary cost input Note: Pay attention to entering the correct combinations of activity type. cost element. In case the fields version. 2.Integrated business processes with SAP ERP 1. Adelsberger/Dipl. Dr. the planned costs are variable. In case the fields version. please make sure that all other fields are empty (first and foremost the activity type field) and select formula-based entry.symbol (overview) or press F5. enter 40000 hours in the plan activity field. Carefully read the instructions since careless mistakes happen quite often. Click the . period. and cost centers in the following sections. Enter cost center CC-MT-xyy and activity type MT-xyy. the costs for salaries in maintenance amount to 150000 EURO. This is done since the production cost center manufacturing features production salaries that are allocated with activity output. Enter 10000 hours in the plan activity field. Post the planning. Enter cost center CC-CA-xyy and cost element purchased services (417000). Click the symbol (overview) or press F5. 4.6. primary cost input can be planned activity dependently in the following. enter the corresponding data. Post your entries. You have to plan these costs now. enter 150000 into the planned fixed costs field and post. The primary costs for the externally procured cafeteria services amount to 150000 EURO. Note: By adding an activity type.. You can see the activity output/prices standard screen (1-201). Post the planning. 3. period. Enter 150000 into the fixed planned costs column. Again. please make sure that all other fields are empty. 2. enter the corresponding data. Taymaz Khatami . Heimo H.3 Planning primary cost input All three cost centers cause primary costs. Repeat step 1 and 2 for cost center CC-MT-xyy and the corresponding cost element salaries (430000). 6. go to the next screen. Since this layout applies only to cost elements. Figure 30: Overview activity input Note: Pay attention to entering the correct combinations of activity type. Heimo H. Click the and post. and cost centers in the following sections. page 41 Copyright Prof. Carefully read the instructions since careless mistakes happen quite often. Pouyan Khatami/ Dipl.-Wirt. call up the following transaction: Accounting  Controlling  Cost Centers  Planning  Costs/Activity Inputs  Change (KP06) 1. Again.-Inf. activity type MF-xyy. The fields version. The hourly price has not been determined. Taymaz Khatami . and cost element direct labor costs (420000). You are now on the activity input activity dependent/ activity independent screen (1-102). yet – this will be carried out later. period. Enter a fixed plan consumption of 1000 hours. To plan this scenario. You can now see the cost elements activity dependent/ activity independent screen (1-101). If not.4. enter the data from the previous task. symbol (overview) or press F5. sender cost center CC-MT-xyy and sender activity type MT-xyy. Enter planned variable costs of 600000 2. Click therefore the symbol or press CRTL-F8. Enter cost center CC-MF-xyy.-Wirt. Adelsberger/Dipl. Dr.4 Planning activity input The manufacturing department (manufacturing cost center) plans to let the internal maintenance team (maintenance cost center) regularly check their appliances in the current fiscal year. 3. Post your entries. On the KP06 screen.-Inf. please make sure that all other fields are empty. Go to the overview screen ( ). You calculate 1000 working hours. and fiscal year are already filled in. All other fields must be empty!!! 2. 6. cost element.Integrated business processes with SAP ERP 5. enter cost center CC-MF-xyy. Adelsberger/Dipl. Heimo H.6. Figure 31: Planning overview cost center cafeteria: SAP system screenshot Figure 32: Planning overview cost center maintenance: SAP system screenshot page 42 Copyright Prof.5 Check hitherto planning Call up the following transaction: Accounting  Controlling  Cost Center Accounting  Information System  Reports for Cost Center Accounting  Planning Reports  Cost Centers: Planning Overview (KSBL) Check the three cost centers (CC-CA-xyy.4. and CC-MF-xyy) by clicking the symbol or by pressing F8. Leave each report with end (Shift+F3).-Inf.Integrated business processes with SAP ERP 2. Pouyan Khatami/ Dipl.-Wirt. Taymaz Khatami . CC-MT-xyy. Dr.-Inf.-Wirt. -Inf. page 43 Copyright Prof.-Wirt. The cafeteria costs must be allocated to two cost centers at a ratio of five (maintenance) to 20 (manufacturing) since the allocation key is the number of employees per cost center. Heimo H.-Inf. you will allocate the cafeteria costs to the individual cost centers according to their number of employees (since they use the cafeteria service).7 Planning cafeteria costs Next. Dr.4.-Wirt. contact your tutor immediately and do not carry out the following steps.Integrated business processes with SAP ERP Figure 33: Planning overview cost center manufacturing: SAP system screenshot Note: If your cost center overviews differ from the figures above. Pouyan Khatami/ Dipl. Adelsberger/Dipl. since it might cause errors for further processing the case studies! 2. Taymaz Khatami . Integrated business processes with SAP ERP Figure 34: Overview cafeteria assessment 2. Click the button or press F8. Leave the transaction. Dr. 1. Confirm the following request with Enter. 5. Enter in the first line in the cycle field the cycle CY-xyy and deselect test run. For the receiver. Pouyan Khatami/ Dipl. 2. The number of senders should be one and the number of receivers should be two.7. call up transaction KSUB again. enter Assessment CEle CAF-xyy. In this case. Select Extras  Cycle  Create from the upper menu bar.1 Create cafeteria assessment Call up the following transaction: Accounting  Controlling  Cost Center Accounting  Planning  Allocations  Assessment (KSUB) 1. Continue Enter. Select the period from 01 to 12. try the operation again later. Enter version planned/actual (0) and in the statistical key figure row and the column From EM-xyy.2 Performing assessment for cafeteria costs In case you already left the previous screen. 6.4.-Inf. You can now see the Execute Plan Assessment: Initial screen. 4. Adelsberger/Dipl. key figures from the variable portion type field.-Wirt.7. Go to the sender/receiver tab. Select plan stat. Save your entries (segment and cycle).4. The system notifies you that the operation was completed without errors. page 44 Copyright Prof. enter in the cost center row and in the group column the created Group-xyy.-Wirt. Enter the current year as fiscal year. 2. an error notification might occur due to system capacity. The system executes the assessment. Enter text assessment-cycle-CC-CA-xyy and click the symbol. Taymaz Khatami . Note: At this point. Enter cycle CY-xyy and enter January 1 of the current year as start date. 2. In the segment header tab. Enter segment name SEGM-xyy. enter in the cost center row and in the from column the value CC-CAxyy.-Inf. 3. For the sender. Select the receiver tracing factor tab. Heimo H. Heimo H. Contrastingly.Integrated business processes with SAP ERP 2.3 Check effects of the assessment Next. enter version planned/actual (0).-Wirt. the cafeteria cost center was balanced. Each time.-Inf.4. Dr. CC-MT-xyy and KS-KA-xyy. Adelsberger/Dipl.-Inf. this might be due to a wrong period selection! Figure 35: Planning overview cost center manufacturing: SAP system screenshot page 45 Copyright Prof. In case you received other maintenance and manufacturing costs. Taymaz Khatami .-Wirt. check the effects of the assessments on the three cost centers in the following transaction that you are already familiar with: Accounting  Controlling  Cost Center Accounting  Information System  Reports for Cost Center Accounting  Planning Reports  Cost Centers: Planning Overview (KSBL) Carry out the report for the three cost centers CC-MF-xyy. You can see that the maintenance cost center was debited with 30000 EUR and the manufacturing cost center was debited with 120000 EUR by the cafeteria assessment. Pouyan Khatami/ Dipl.7. -Wirt.-Wirt. since it might cause errors for further processing the case studies! page 46 Copyright Prof. The reason for this is that prices for the corresponding activity types have not been planned yet. Heimo H. Pouyan Khatami/ Dipl. contact your tutor immediately and do not carry out the following steps. Note: If your entries differ from the figures above.Integrated business processes with SAP ERP Figure 36: Planning overview cost center maintenance: SAP system screenshot Figure 37: Planning overview cost center cafeteria: SAP system screenshot You will note that activity inputs and activity allocations are still valued with zero € although quantities were specified.-Inf. Dr. Taymaz Khatami .-Inf. This is the next step. Adelsberger/Dipl. Please pay attention to the correct development of prices in your company. call up the following transaction: Accounting  Controlling  Cost Center Accounting  Planning  Allocations  Price calculation (KSPI) 1.-Wirt. Adelsberger/Dipl. select no business processes. Moreover.Integrated business processes with SAP ERP 2. for example. Choose execute ( button or press F8). Figure 38: Overview price calculation for activity types To let the system execute automatic price calculation. resulting page 47 Copyright Prof.-Inf. The automatically calculated prices are transferred to the planning data of the cost center. Deselect test run. the request concerning successful completion appears. In the fixed price and variable price columns. A basic list with prices is displayed. overall price for CC-MF-xyy and activity type MF-xyy: ______________________ overall price for CC-MT-xyy and activity type MT-xyy: ______________________ 3. cost center CC-MF-xyy and activity type MF-xyy and choose execute. Dr. Select the cost center group entry from the dialog and enter Group-xyy into the field. In the price unit column. then the system calculated the priced based on ten units. 00001 means that a unit was calculated at a price of 18. Confirm it with Enter. 00010. The system now posts the price calculation. Enter. Version is planned/actual(0) and enter period 01 to 12 with the current year as fiscal year. 2.-Wirt. After successful calculation.45 €. You can display the effects using transaction KSBL. You can check this by calling up transaction KP27. Taymaz Khatami . If your entry is. Heimo H. for example. Pouyan Khatami/ Dipl. List the prices determined by the system for the activity types. you can find the unit that the price refers to.8 Automatic price calculation for the two activity types Automatic price calculation is next.4.-Inf. you can see the components of the calculated price. 9.50 € etc. since it only results in marginal rounding errors. Fiscal year current fiscal year c.-Wirt.4. Therefore. Enter the following data: a.-Inf. Heimo H. To period 12 e. choose Accounting  Controlling  Cost Center Accounting  Information System  Reports for Cost Center Accounting Plan/Actual Comparisons  Cost Centers: Actual/Plan/Variance (S_ALR_87013611) 1.9 Actual cost entry After you successfully completed cost center planning for the current year. Choose execute. 2. Pouyan Khatami/ Dipl. Dr. Plan version 0 f.1 Plan/actual comparison cost center accounting Firstly. carry out a cost report to recall the planning data for your cost center group. Adelsberger/Dipl.4.-Wirt. The planned costs at both cost centers that are part of cost center group-xyy are displayed. Figure 39: Process overview: Cost center accounting: Actual costs 2. Controlling area 1000 b. Taymaz Khatami . no actual costs incurred. page 48 Copyright Prof. enter now the actually occurred costs at the cost centers. Cost center group Group-xyy 2. Until now.-Inf.Integrated business processes with SAP ERP in an overall price 184. The amount of the price unit is not crucial. From period 1 d. Input type list entry f. SendCstCtr CC-MT-xyy g. Version 0 d. List the document number on your data sheet. Therefore.Integrated business processes with SAP ERP Figure 40: Plan/actual comparison cost center accounting (1): SAP system screenshot 3. Document date today b. enter controlling area 1000. ActTyp MT-xyy h. Total Quantity 200 3. 4. In case you are prompted to do so. Dr. Taymaz Khatami . Activity allocation (maintenance): ________________________________________ page 49 Copyright Prof. Enter the following data: a. RecCstDtr CC-MF-xyy i. Screen variant (Scrn var.2 Direct activity allocation Some tasks occurred already in the current period.9. Heimo H.-Inf.-Inf. choose Accounting  Controlling  Cost Centers  Actual Postings  Activity Allocation  Enter (KB21N) 1. Confirm with enter and save your document. Post the 200 hours that the maintenance cost center worked for the manufacturing cost center using direct activity allocation. 2. Adelsberger/Dipl. Pouyan Khatami/ Dipl.) cost center e.-Wirt. Posting date today c. 2.-Wirt. Leave the cost report.4. The maintenance center worked 200 hours for maintaining machines of the manufacturing cost center. Integrated business processes with SAP ERP Create another cost report for the current period to display the planning data for your cost center group again. Therefore, choose Accounting  Controlling  Cost Center Accounting  Information System  Reports for Cost Center Accounting  Plan/Actual Comparisons  Cost Centers: Actual/Plan/Variance (S_ALR_87013611) 1. Enter the following data: a. Controlling area b. Fiscal year c. From period d. To period e. Plan version f. Cost center group 2. Choose execute. 1000 current fiscal year current period current period 0 Group-xyy You can see that the actually incurred costs were posted to the corresponding cost center using cost element (MNT-xyy). Moreover, activities are documented in the lower table. The actual values refer in both tables to the monthly average regarding the costs (or activity output) expected (planned) for the year. For example, an overall activity output of 1000 hours was planned concerning the maintenance activities for the manufacturing cost center. Breaking this down, you can calculate a monthly average of 83.33 hours activity. Multiplied by the automatically calculated price of 18 Euro, this means a monthly cost of 1500 Euro for the manufacturing cost center. These planned costs were exceeded 140 % (3600 € or 200 hrs.) in the current period. The last column of the table shows the deviation from the planned value in percent. Figure 41: Plan/actual comparison cost center accounting (2): SAP system screenshot 2.4.9.3 Post expenses to cafeteria cost center Next, you will enter the costs at the cafeteria cost center (cost element 417000). Please bear in mind that in an actual business environment, many different cost elements occur at a cost page 50 Copyright Prof. Dr. Heimo H. Adelsberger/Dipl.-Wirt.-Inf. Pouyan Khatami/ Dipl.-Wirt.-Inf. Taymaz Khatami Integrated business processes with SAP ERP center. In our example however, you will only learn about the basic principle and therefore, complexity was simplified. Excurse: We will do without cost entry at the other cost centers (manufacturing and maintenance) at this point. Generally, it would also not be logical to do so, especially for the manufacturing cost center, since its costs (wages) are allocated via wages. Employees at the manufacturing cost center are paid via wages, i.e., if they work, they generate activity that is then allocated directly to, for example, a production order. Thereby, the SAP ERP system uses the automatically calculated prices in combination with the provided activities (activity types) and calculated then the costs for the credit rows. After that, a posting (FB50) must be entered on the corresponding account (420000) of the general ledger. These costs are then displayed in the debit rows. Contrastingly, the employees of the maintenance center receive activity-independent salary, i.e. they would not have to work in principle. You already carried out activity allocation for maintenance in the previous section. For manufacturing, you would need a production order (or different posting assignment) as posting assignment (to remain in the logic of the case study scenario) to allocate (credit) the activities provided by the manufacturing center (the cost center is supposed to produce bicycles). However, you do not want to produce anything in this case study (reduction of complexity) and thus, we will do without this at this point. In the next section (internal orders), you will focus on the principle in more detail. Summary of the principle: 1. The manufacturing department provides activities for a production order that are entered using activity type MF-xyy. 2. The costs of this activity are calculated using the price (automatically calculated), and the activity type and the provided working units (x hours). 3. The costs are allocated to the production order or to the customer order and are thus considered in cost calculation of the order (how expensive is the production of a bicycle?). These costs are then transferred to the customer with the sales price. 4. Since the costs were “assumed” by the order, the cost center is credited. 5. On the other hand, the employees at the manufacturing work center want to be paid. The costs (salary) of the employees are entered with a posting in the general ledger (FB50). These costs appear in the cost report in the debit row. 6. In an optimal cost- and activity accounting, credit and debit balance each other so that the balance is zero in the end at this internal cost center. 7. This balance is independent of any profits. The profit achieved by a company is the difference of costs (e.g., form a sales order/production order) and the revenue (price * quantity sold) for this order. This balance should be positive. Since cost element 417000 is a primary cost element, i.e., the company receives activities externally, a posting in FI is required. Choose Accounting  Financial Accounting  General Ledger  Posting  Enter G/L Account Document (FB50) page 51 Copyright Prof. Dr. Heimo H. Adelsberger/Dipl.-Wirt.-Inf. Pouyan Khatami/ Dipl.-Wirt.-Inf. Taymaz Khatami Integrated business processes with SAP ERP 1. In case you are prompted to do so, enter controlling area 1000. 2. Enter the following data: a. Document date current date b. Posting date current date c. G/L account 417000 d. Debit/credit debit e. Amount document currency 12500 f. Tax key V0 g. Cost center CC-CA-xyy h. G/L account (second row) 113100 (bank account from which the liability is paid) i. Debit/credit credit j. Amount document currency 12500 Figure 42: Expenses cost center cafeteria: SAP system screenshot 3. Confirm with Enter and save the document. Note: In case the system displays a message, select the second line and choose lower part of the screen. Enter the current date in the due on field. Then, choose the document again. from the and save 4. List the document number on your data sheet. Cafeteria expense: _______________________________________________ Call up the cost report again for the current period and your hierarchy area Hxyy to display the planned and actual data for all cost centers within your hierarchy again. Choose Accounting  Controlling  Cost Center Accounting  Information System  Reports for Cost Center Accounting Plan/Actual Comparisons  Cost Centers: Actual/Plan/Variance (S_ALR_87013611) page 52 Copyright Prof. Dr. Heimo H. Adelsberger/Dipl.-Wirt.-Inf. Pouyan Khatami/ Dipl.-Wirt.-Inf. Taymaz Khatami Adelsberger/Dipl. Plan version f. Fiscal year c. enter the first day of the current fiscal year. Enter the following data: a.-Inf. Pouyan Khatami/ Dipl. Figure 43: Plan/actual comparison cost center accounting (3): SAP system screenshot The 10. Choose execute.-Wirt. Enter the name PUxyy in the cycle field. From period d. 2.4 Period-end closing Create an allocation cycle for period-end closing.000 € with cost element 470000 refer to the rent entered in the FI case study. you need to create an allocation cycle in the period-end closing in the next step of this case study. 1000 current fiscal year current period current period 0 Hxyy You can see that the corresponding expenses were posted to the cafeteria. Choose Accounting  Controlling  Cost Center Accounting  Period-End Closing  Single Functions  Allocations  Assessment (KSU5) 1. Only cost element CAF-xyy does not show an actual posting. Dr. Taymaz Khatami . page 53 Copyright Prof.-Inf. In the start date field.4. Heimo H. To actually cause the allocation of the cafeteria expenses. 2.Integrated business processes with SAP ERP 1.-Wirt.9. Choose Extras Cycle  Create from the menu. this was only applicable to planning. To period e. Controlling area b. Although you defined an allocation cycle. 3. Cost center group 2. Integrated business processes with SAP ERP 4. Choose Enter to skip the next screen. 5. In the text field, enter assessment xyy. 6. You have to assign your cycle to a cycle run group so that the cycles created in the course can be carried out simultaneously. Choose GoTo  cycle run group and then choose . 7. Enter run group Gxyy and enter the text group xyy in behind. 8. Confirm with enter twice. 9. Choose . Enter Seg-xyy into the segment name field and Segment xyy in the txt field in behind. 10. In the segment tab, enter your cost element CAF-xyy in the assessment cost element (Assessment CEle) field. 11. Go to the sender/receiver tab. 12. Enter sending cost center CC-CA-xyy and receiving cost center group Group-xyy. 13. Go to the receiver tracing factor tab. 14. Choose plan statistical key figures from the drop down field type of variable portion. Enter version 0 and statistical key figure EM-xyy. 15. Save the cycle and return to the initial screen of transaction KSU5. 16. Again, enter your cycle PUxyy. Enter the current period into the period field and in the until field the current period as well. 17. Deselect test run and choose execute. 18. If the assessment cycle is completed successfully, the following screen appears: Figure 44: Period-end closing actual assessment: SAP system screenshot Run the cost report one last time for the current period and your cost center group groupxyy. Choose Accounting  Controlling  Cost Center Accounting  Information System  Reports for Cost Center Accounting  Plan/Actual Comparisons  Cost Centers: Actual/Plan/Variance (S_ALR_87013611) You can see that cost element CAF-xyy was now updated with the corresponding amount. You can display the itemization of the individual cost centers by clicking a cost center twice in the left window. page 54 Copyright Prof. Dr. Heimo H. Adelsberger/Dipl.-Wirt.-Inf. Pouyan Khatami/ Dipl.-Wirt.-Inf. Taymaz Khatami Integrated business processes with SAP ERP Figure 45: Plan/actual comparison cost center accounting (4): SAP system screenshot page 55 Copyright Prof. Dr. Heimo H. Adelsberger/Dipl.-Wirt.-Inf. Pouyan Khatami/ Dipl.-Wirt.-Inf. Taymaz Khatami Integrated business processes with SAP ERP 2.5 Theory – Internal orders An internal order is a flexible tool in controlling. It can be used in many ways for documentation of costs and sometimes of revenue as well within a controlling area. Internal orders are used for planning, monitoring, and allocation of costs. Internal orders can be used for many different purposes. They can be grouped in four categories: - Overhead orders are used to monitor overhead costs incurred for a particular purpose, for example, performing a trade fair, or documenting costs such as maintenance and repair work. - Investment orders are used to monitor the costs occurred for the production of a fixed asset, for example, of a warehouse. - Accrual orders are used for offset postings of accrued costs (calculated costs in CO) to cost centers. - Orders with revenue replace the cost accounting part of the sales orders in the SD component if SD is not used. Both costs and revenue can be monitored. They can also be used for monitoring revenue that is not part of the core business of the company (e.g., miscellaneous revenues). Figure 46: Internal orders 2.5.1 Planning internal orders Cost planning for orders is usually carried out with a long life cycle. Orders with a short life cycle such as unexpected, small repair works are usually not planned. There are three cost planning levels for planning internal orders: - Overall planning is the simplest form for planning order costs. You can plan overall and annual values independent of cost elements. - Primary/secondary and revenue planning can be used in case you have detailed information regarding an order. For automatic planning purposes, primary/secondary page 56 Copyright Prof. Dr. Heimo H. Adelsberger/Dipl.-Wirt.-Inf. Pouyan Khatami/ Dipl.-Wirt.-Inf. Taymaz Khatami activity inputs. Figure 48: Posting to an internal order page 57 Copyright Prof. Figure 47: Plan internal orders 2.-Wirt.-Inf. Dr. Heimo H.Integrated business processes with SAP ERP - cost and revenue planning features planning primary costs.. you can carry out a more detailed planning in comparison to the cost elements. Adelsberger/Dipl. Using unit costing. and revenues. Pouyan Khatami/ Dipl.e. Taymaz Khatami .-Inf. A statistical posting would link the real posting occur at the cost object that the internal order is linked with.2 Posting to an internal order You can get a better overview of costs that cannot be itemized at a cost center using an internal order. only for information purpose). An order can be real or statistical (i.-Wirt.5. The possible receivers of a settlement are defined in customizing. Commitment management must be activated for each controlling area in management accounting. Order settlements can be carried out to different types of receivers. asset. and report.-Inf.-Wirt. Adelsberger/Dipl. This rule can contain that all costs of the order are allocated to an individual receivers or to multiple receivers. You have to define a settlement rule for each order. By recording commitments. When an order is completed.3 Commitment A commitment contains cost incurring later for orders or requested materials or services. Settlement can be structured flexibly using numerous available settlement options. A commitment is created automatically when an overhead order is assigned to a purchase requisition or to a purchase order line item. other orders. assigned funds can be compared with the planned or budgeted costs to determine availability of funds. you have to check that no restrictions are in place (e.5. This process is carried out as long as the order was closed and the commitment was reduced to zero. fixed assets.). and G/L accounts. the costs must be posted to their final destination (cost center. Figure 49: Commitment 2.-Inf. internal orders serve as interim cost collector and as an aid to plan. The settlement rule is defined in the order master record. monitor.-Wirt. Heimo H. Taymaz Khatami .. It is another form of periodic cost allocation. analogously to actual costs. projects. This operation is called “settlement”. period lock) that might prevent settlement.Integrated business processes with SAP ERP 2. Commitments for future cots are created in the purchasing function of the materials management component. The commitment is reduced by posting a goods receipt against a purchase order. Pouyan Khatami/ Dipl. profitability segments. page 58 Copyright Prof. The actual costs are posted to the internal order.4 Order settlement Usually. Possible settlement receivers are for example other cost centers. Settlements can be carried out according to order type and its purpose in the company either at the end of a period or at the end of the order’s life cycle. Dr.5.g. profitability segment. Moreover. etc. Pouyan Khatami/ Dipl.-Inf. Adelsberger/Dipl.-Wirt.-Inf.-Wirt. Dr. Heimo H.Integrated business processes with SAP ERP Figure 50: Order settlement page 59 Copyright Prof. Taymaz Khatami . -Wirt. Settlement receiver 4500 d. choose Accounting  Controlling  Internal Orders  Master Data  Order Manager (KO04) 1. On the assignments tab. The costs are posted per posting period to cost center 4500 (R&D). 6.-Inf.Integrated business processes with SAP ERP 2. The system status should change to released (REL). Choose create . Responsible CCtr. Taymaz Khatami . 2. b.1 Create internal order Use the Order Manager to create the internal order. Dr. Category (Cat) CTR c. Heimo H. Enter order type 0100 (internal order . enter controlling area 1000. If requested. Go to the control data tab page.development) and choose Enter.-Wirt. Create an overhead order to enter the costs incurred in product development. Settlement type PER 7. Profit center PROFITxyy c. Therefore. Confirm with Enter and go back to the previous step. 4. a. Business area 9900 b.6 Practical application – Internal orders The R&D department of your company improves the Speedstarlett. Internal order: ________________________________________________________ page 60 Copyright Prof. Figure 51: Process overview: Internal orders 2. Adelsberger/Dipl. enter the following data: a. Define a settlement rule for periodic settlement to allocate 100% of the actual costs to the R&D cost center. Enter the Description text product development costs group xyy. Release the order ( ). Pouyan Khatami/ Dipl. % 100 e. List the order number on your data sheet.-Inf. Save the order.6. Choose settlement rule ( ). Your manufacturing cost center will produce the prototype in this context and will be the responsible cost center. 8. CC-MF-xyy 5. 3. Pouyan Khatami/ Dipl. In the order field. 8. vendor your vendor number b. Material gearing-xyy c. Heimo H. Fiscal year current fiscal year c. Skip possible notifications with save. To period current period e. the department wants to purchase some gearings (gearing-xyy). Choose execute. Confirm the next two messages regarding the quantity discount and the delivery date with Enter and save the delivery order. Standard purchase order: _______________________________________________ Check. 4. enter the subsequent data: a. Taymaz Khatami . whether the commitment for your internal order was posted. Choose Enter. purchasing group 000 2.6. Dr. plant (Plnt) 1000 3. In the first field or value(s). PO quantity 100 d. page 61 Copyright Prof.2 Commitment management Personnel working in product development focus especially on improving the gearing. Choose Logistics  Materials Management  Purchasing  Purchase Order  Create  Vendor/Supplying Plant Known (ME21N) 1. 6. enter your internal order number. To determine whether improvements are possible. The system issues a warning: “Account 410000 requires account assignment that is relevant to cost accounting“ and goes automatically to the account assignment tab. In the item overview area. In the order header. 5. Create an internal order and check the posted commitment. List the number of the standard purchase order. enter the following information: a. The system receives the net price for the gearing form the conditions that you maintained for the vendor in the procurement process case study. Account asset category (A) F b.-Inf. Therefore.-Inf. Controlling area 1000 b.-Wirt. Enter the following information: a. enter your internal order number and choose Enter. 7. From period current period d. purchasing organization 1000 c. you will get a quantity discount at 500 order units. Plan version 0 f. Correspondingly. Adelsberger/Dipl.-Wirt. Delivery date current date e.Integrated business processes with SAP ERP 2. call up the following transaction Accounting  Controlling  Internal Orders  Information System  Reports for Internal Orders  Plan/Actual Comparisons  Additional Key Figures  Orders: Actual/Plan/Commitment (S_ALR_87012999) 1. -Wirt. Pouyan Khatami/ Dipl. 2. Post the goods receipt for the order. Enter the order number for your gearings and choose Enter. 4. Material document gearing: _________________________________________ page 62 Copyright Prof. 6. Select the operation goods receipt and the purchase order reference from the corresponding drop-down fields.3 Goods receipt for an order The vendor was very quick and delivered the gearings.-Wirt. Click the post button. Taymaz Khatami .6. 3. You can see that the corresponding order value is listed for your order in the commitment column for cost element 410000 (the consumption account for OEM products).-Inf. 5.Integrated business processes with SAP ERP 2. Figure 52: Report for internal order/commitment: SAP system screenshot 2.-Inf. List the material document number. Adelsberger/Dipl. Dr. Heimo H. Select position OK and enter * into the delivery note field. Choose Logistics  Materials Management  Inventory Management  Goods Movement  Goods Receipt  For Purchase Order  PO Number Known (MIGO) 1. Make sure that movement type 101 was selected. you have to post the corresponding expense for an activity output to the cost centers. If necessary. Document date current date b.9.4 Direct activity allocation The manufacturing department worked 100 hours for the construction order. The automatically determined price from planning is 18. This expense is supposed to be allocated to the internal order as cost bearer like the material order before. Choose Accounting  Financial Accounting  General Ledger  Posting  Enter G/L Document (FB50) 1. Select screen variant (Scrn var.) pay for their food. Version 0 d.) order.-Wirt. Entry type list entry e. At this point. this price considered the allocation of cafeteria costs as well. choose Accounting  Controlling  Cost Center Accounting  Actual Postings  Activity Allocation  Enter (KB21N) 1. Activity allocation manufacturing: ________________________________________ 2. List the document number on your data sheet.-Inf. 5. page 63 Copyright Prof. Dr. enter controlling area 1000. Taymaz Khatami . you will post the 100 hours (manufacturing) as well as the 200 hours (maintenance) from the direct activity allocation in a document.-Inf. Confirm with Enter and save the document. Enter controlling area 1000. 2. Rec. Total quantity 100 4. Cost Ctr.45 € for manufacturing. 3. production orders.order your order number h. the employees let their orderers (account assignment objects: sales orders. Pouyan Khatami/ Dipl.4.000 € for 20 employees that work 2000 hours each). Heimo H.Integrated business processes with SAP ERP 2. Enter the following data: a. Adelsberger/Dipl.3. The employees of both departments receive an hourly rate of 15 € (manufacturing: 600. Posting date current date c. To carry out a direct activity allocation. SAtyTyp MF-xyy g. CC-MF-xyy f. if you have to.6. etc.-Wirt.6. however.5 Expense posting for manufacturing and maintenance As described in the note in chapter 2. Thus. Enter the current date into the due on field. Posting date c. Cost center k.-Wirt. Taymaz Khatami .-Wirt. Enter the following data: a. D/C m.Integrated business processes with SAP ERP 2.6 Cost reports Next. Save the document and list its number. Adelsberger/Dipl. Pouyan Khatami/ Dipl. f. G/L account d. Save the document again. check the effects of the commitment posting (goods receipt) and of the direct activity allocation on your internal order. G/L account (third row) l. 3. Document number (Expense posting): _________________________________________ Figure 53: Expense posting maintenance and manufacturing: SAP system screenshot 2. Document date b. D/C e. G/L account (second row) h.6. Amount in document currency current date current date 420000 debit 1500 CC-MF-xyy 430000 debit 3000 CC-MT-xyy 113100 credit 4500 Note: In case you receive a message. Heimo H.-Inf. curr.-Inf. select the third row and choose from the bottom of the screen. Amount in document currency j. Choose Accounting  Controlling  Internal Orders  Information System  Reports for Internal Orders  Plan/Actual Comparisons  Additional Key Figures  Orders: Actual/Plan/Commitment (S_ALR_87012999) page 64 Copyright Prof. Choose . Cost center g. Dr. Amount in doc. D/C i. Moreover. Cost center group 2. From period d. page 65 Copyright Prof. Choose Accounting  Controlling  Cost Center Accounting  Information System  Reports for Cost Center Accounting  Plan/Actual Comparisons  Cost Centers: Actual/Plan/Variance (S_ALR_87013611) 1. Take a look at the planned/actual cost comparison of your cost center group Group-xyy again. Controlling area 1000 b.-Wirt.33 hours. Fiscal year c. From period current period d. respectively (see figure below). You can see that for your order. 1000 current fiscal year current period current period 0 Group-xyy You can see that additional 4500 € were debited to the cost center and 5445€ were credited. To period e. Enter the following data: a. Dr. there is a zero listed in the commitment column and the corresponding costs were posted to the actual column. Enter the following data: a. there is a new row in which the costs from the manufacturing department were posted. Plan version f.33 and 833. Choose execute. they would really deserve the food (allocation KS-KA-xyy). If both cost center manage to perform the planned activities of 3333. Pouyan Khatami/ Dipl. Plan version 0 Enter your internal order number into the or value(s) field.-Wirt. To period current period e. Taymaz Khatami . Fiscal year current fiscal year c. Choose execute. Adelsberger/Dipl.Integrated business processes with SAP ERP 1.-Inf. Heimo H. Controlling area b.-Inf. Note: During settlement. costs incurred under the primary and secondary cost elements by a sender are allocated to one or more receivers. Pouyan Khatami/ Dipl.-Inf. Select the line with the entry 025 (allocation) and double-click on the source folder in the left window. An assignment shows which costs (origin: cost element groups from debit cost elements) are to be settled to which receiver type (for example.-Wirt.-Wirt.6. Allocation structure A1 will be relevant later in this case study. An allocation structure comprises one or several settlement assignments.-Inf. Go back to the SAP easy access menu and call up SAP menu  Accounting  Controlling  Cost Element Accounting  Master Data  Cost Element Group  Change (KAH2) page 66 Copyright Prof.7 Excurse At this point. and so on). Taymaz Khatami . Dr. order. Adelsberger/Dipl. You can see that the cost element group OAS_ORDERS is listed for the allocation structure A1 and the assignment 025. cost center. you can find another brief customizing excurse.Integrated business processes with SAP ERP Figure 54: Plan/actual comparison cost center accounting: SAP system screenshot 2. Heimo H. since allocation cost element MFT-xyy will take a special role in settling the internal. Go to: IMG  Controlling  Product Cost Controlling  Cost Object Accounting  Product Cost by Order  Period-End Closing  Settlement  Create Allocation Structure Select allocation structure A1 and double-click the assignments folder in the left window. Firstly. Choose execute. Select and enter your cost element MFT-xyy into the first row. fiscal year current fiscal year e. Save your entries. you can see your order number. processing type automatical f. check whether your controlling area (1000) is set (Extras  Set Controlling Area). test run deselect 2. Taymaz Khatami . Choose the receiver button to display details regarding cost allocation. 2. Choose Accounting  Controlling  Internal Orders  Period-End Closing  Single Functions  Settlement  Individual Processing (KO88) 1. 2. the R&D cost center is listed (4500).-Wirt.6. settlement period current period c. 5. you direct the system to post the allocation cost type MFT-xyy to the accounts that were assigned to cost element group OAS_ORDERS in customizing when later allocating the internal order.-Inf. allocate the costs to the R&D cost center. Choose the detail lists ( ) button. Enter the determined cost element group OAS_ORDERS into the cost element group field and confirm with Enter.Integrated business processes with SAP ERP 1. Next. Enter the following information: a. Dr.-Inf. 3. order number of your internal order b. Carry out an actual costs settlement for your internal order. 4. you enter your cost element into the cost element group OAS_ORDERS and as a consequence.8 Completion of the internal order You completed the actual postings for your internal order. Use the current period as both: settlement and posting period. This step is required to make sure that the costs of the internal order can be transferred to the account assignment object (cost center R/D) in the sense of object accounting. In the sender column. Pouyan Khatami/ Dipl. 4. Heimo H. Choose Accounting  Controlling  Internal Orders  Information System  Reports for Internal Orders  Plan/Actual Comparisons  Additional Key Figures  Orders: Actual/Plan/Commitment (S_ALR_87012999) page 67 Copyright Prof. posting period current period d.-Wirt. in the receiver column. Adelsberger/Dipl. 3. Check one last time the effects on your internal order. Thus. which is responsible for their incurrence. the internal order was allocated completely. Dr.-Inf. Pouyan Khatami/ Dipl. Heimo H. Fiscal year current fiscal year h. Adelsberger/Dipl. Plan version 0 Enter your internal order number into the or value(s) field.-Wirt. Thus. Taymaz Khatami . page 68 Copyright Prof. From period current period i. The R&D cost center bears now the costs. 2. To period current period j.Integrated business processes with SAP ERP 1. Controlling area 1000 g. Enter the following data: f.-Inf. You can see that the balance is zero in all tables.-Wirt. Choose execute. page 69 Copyright Prof. Figure 55: Typical questions in profit center accounting 2. production orders. Dr. Heimo H. This assignment makes the system generate a statistical (additional) posting in EC-PCA to the corresponding profit center for each debit or credit posting. or production sites). When a company is structured in profit centers. profit centers represent practically individual companies within a company. Please note that profit centers are not real account assignment objects. Adelsberger/Dipl. you specify where in CO revenue or expenses are resided.Integrated business processes with SAP ERP 2. or event objects. This internal view on profitability represents the extent to which a particular profit center meets the profitability goal for which it is responsible.7 Theory – Profit center accounting 2.If controlling is active. Thus. internal orders. Thus. geographical factors (regions.-Inf.-Wirt. When profit center accounting is active.7. sales).7.-Inf. offices. Account assignment logic in management accounting: . Examples of real account assignment objects are cost centers.-Wirt.There is a profit center field in the master records of the controlling objects. divisions). each posting to a revenue or expense account that was created as cost element in CO requires an account assignment object.1 Typical questions in profit center accounting A profit center is a management-oriented organizational unit used in management accounting. Taymaz Khatami . the areas of responsibility can be evaluated and the responsibilities can be transferred to distributed units. Pouyan Khatami/ Dipl. . the different controlling objects are assigned to the entered profit center. Profit center accounting (EC-PCA) allows for creating profit centers according to products (product lines. or functions (production.2 An internal perspective of profit center accounting Using profit center accounting. you can determine the internal measurements of profitability for the entire company or parts of it. In profit center planning. Different plan versions can be used to consider changes during the planning process or to use different planning scenarios for a particular period. profitability analysis. Pouyan Khatami/ Dipl. because planned data are created by other applications and then completed or modified in profit centers.3 Integration planning in profit center accounting Profit center planning is an integral component of the entire business planning. In the second step. the individual planning areas are combined in an integrated planning network. planning data is firstly transferred from cost centers. Profit center planning belongs to the short-term planning covering one fiscal year. internal orders. During the planning process.7.Integrated business processes with SAP ERP Figure 56: An internal perspective of profit center accounting 2. and product cost planning to a profit center. Figure 57: Integration planning in profit center accounting page 70 Copyright Prof. the planning data are modified directly in the profit centers. Adelsberger/Dipl.-Inf. Taymaz Khatami . Heimo H. The integration of business planning is well illustrated by profit centers. Dr.-Wirt.-Wirt.-Inf. Dr. There are also many standard reports available. Figure 58: Advantages of profit center accounting page 71 Copyright Prof. Adelsberger/Dipl.-Inf. Reports can be used for individual profit centers or for profit center groups.4 Advantage of profit center accounting The information system is used for the evaluation of actual and planned data. you can also create user-specific reports.7. Heimo H. Taymaz Khatami .-Inf.Integrated business processes with SAP ERP 2.-Wirt. Pouyan Khatami/ Dipl.-Wirt. Heimo H. Create the report profit center list: plan/actual for the current period and plan version 0. You can see that several cost centers are not assigned to profit centers.1 Assignment monitor of profit center accounting Firstly. Taymaz Khatami . Execute the report for the profit center group 8A-ALL-PRCTR. Enter the following data: a. you have to ensure that all production cost centers are assigned to profit centers. Enter 1(production) into the cost center category field. Select Assignment Monitor  Cost Centers  Non-Assigned 2. From period d.8. 5.8 Practical application – profit center accounting 2. Choose execute. 4. Controlling area b.-Wirt.-Inf. Adelsberger/Dipl. Plan version f. Figure 59: Process overview: Profit center accounting Choose Accounting  Controlling  Profit Center Accounting  Master Data  Assignment Monitor (1KE4) 1. Execute the assignment monitor for cost center category 1 (production).GLPTC. Accept the default value in the date field. Fiscal year c. Pouyan Khatami/ Dipl. 6. enter controlling area 1000. Moreover.8.GLPTC page 72 Copyright Prof. Choose Accounting  Controlling  Profit Center Accounting  Information System  Reports for Profit Center Accounting  List-Oriented Reports  Profit Center List: Plan/Actual (S_ALR_87009712) 1. 2. Your cost center should not be amongst these. Dr.-Wirt. you want to display these data quarterly for your profit center PROFITxyy.2 Profit center report You want to check all plan and actual costs posted to the profit centers of your company in controlling area 1000. Deselect display assigned Cost Centers also. 3. If required. To period e.Integrated business processes with SAP ERP 2. Profit center group 1000 current year current period current period 0 8A-ALL-PRCTR.-Inf. Heimo H.Integrated business processes with SAP ERP 2. Choose execute.-Wirt. Dr. actual with a double. 3. Taymaz Khatami . Select the quarterly report PrCtr Grp: Quarter comp. Which costs incurred in this quarter at your profit center and what are the total costs? List the answer on your data.-Inf. Double-click your profit center PROFITxyy.-Inf.-Wirt. Adelsberger/Dipl. 4. page 73 Copyright Prof. 5. Pouyan Khatami/ Dipl. the region. the system automatically creates the affected market segment called profitability segment during a posting. The value fields answer the question: “Which statistical key figures do I want to monitor and analyze?” Examples of value fields are gross sales.9. Taymaz Khatami . or customers. regions. products. e. Pouyan Khatami/ Dipl. Characteristics answer the question: “Which aspect do I want to evaluate?” Examples of characteristics are division.-Wirt.Integrated business processes with SAP ERP 2.-Inf. or other characteristics as well as according to internal organizational units. Profitability analysis aims at providing market-oriented decision support for the board of directors.-Wirt. Dr. These segments can be defined according to the product.-Inf.2 Profitability segment Based on the combination of characteristic values. planning. company code or business area. and cost of sales. Figure 60: Typical questions in profitability analysis 2. Adelsberger/Dipl. the customer.1 Typical question in profitability analysis Profitability analysis (CO-PA) allows for evaluating the profitability of segments in companyexternal markets.9. page 74 Copyright Prof. surcharges.g.. Heimo H. discounts. marketing.9 Theory – Profitability analysis 2. Characteristic values answer the question: “For which values can I have characteristics?” Examples of characteristic values are “region south” and “region north”. and for other departments of a company. sales and distribution. -Wirt. Profitability analysis allows you to choose corresponding values for different users of a company. different key figures for the trade margin can be set according to the requirements. Pouyan Khatami/ Dipl. Heimo H. which values affecting profitability are supposed to be evaluated for this object.. Profitability analysis includes a multi-dimensional tool for the creation of reports that can evaluate data for each market segment and each profitability measure. you have to determine.g. When different users define the trade margin differently. selling product A to customer Y) defines a profitability segment.9. Dr.-Inf.3 Profitability analysis per market segment The profitability of a particular product group sold to a particular customer can be evaluated using profitability analysis.-Inf. You can for example determine which revenue types and expense/cost categories are used according to the company requirements for the calculation of a value for the trade margin. Adelsberger/Dipl.Integrated business processes with SAP ERP Figure 61: Profitability segment 2.-Wirt. Each specific combination of characteristic values (e. The profitability analyses can be configured in a way that allows you to use particular characteristics that apply to defining market segments in a company. These values are referred to as key figures. Taymaz Khatami . page 75 Copyright Prof. Moreover. -Inf.-Wirt. Heimo H. Adelsberger/Dipl. Pouyan Khatami/ Dipl.-Inf. Taymaz Khatami .-Wirt.Integrated business processes with SAP ERP Figure 62: Profitability analysis per market segment page 76 Copyright Prof. Dr. Choose Enter. Mexico City. Expand the report to display the results for the Mexico City plant (6000). For differentiated and specialized analyses. Adelsberger/Dipl. Figure 63: Process overview: Profitability analysis Choose Accounting  Controlling  Profitability Analysis  Information System  Execute report (KE30) 1. Enter 1 into the from period field and enter 12 into the to period field. Pouyan Khatami/ Dipl. 2. Carry out a report for operating concern IDEA in profitability analysis.-Inf. SAP offers the product SAP Business Intelligence. Note: In the educational system (IDES). Which division has the highest gross revenue? 3. enter IDEA into the operating concern field and select the costing-based button. 7. you can display revenue. only sales planning data are available for this plant. You can see the revenue for division 15. Dr. you can display the available tools suing the arrows or the magnifier.Integrated business processes with SAP ERP 2. Select report AC040. Select classic drilldown. 8. When the screen “documentation for hotpots” appears. Taymaz Khatami . 2. is displayed. 4. 4. Using this procedure. 1.10 Practical application – Profitability analysis Evaluate the results of your company. Make sure that plant 6000. Enter fiscal year 2003 into the fiscal year field. Heimo H. Enter version 110. contribution margins. Choose division from the navigation area.-Wirt. and so on. 9. 6. Carry out the contribution margin report AC040 for the current fiscal year and plan version 110 to display the results in the different market segments. choose continue. If required. On the “setting operating concern” screen.-Wirt.-Inf. Choose execute. Choose execute. Break down plant 6000 to display the sales and revenue figures according to divisions. 3. 5. page 77 Copyright Prof. Product cost accounting consists of the following components: . These costs are allocated to cost objects such as production orders in cost object controlling. the costing item can be either entered manually using the unit costing tool or they can be transferred automatically from an external system using batch input. The actual production costs are cumulated together with the raw material consumption during work processing. . Materials and material movements are valued with a standard price during the period.-Inf. In period-end closing. In case of variance from this standard price. Taymaz Khatami . page 78 Copyright Prof. Adelsberger/Dipl. they are collected in the material ledger at the time of invoice receipt or order settlement. such as profitability analysis and financial accounting.Cost object controlling collects costs incurring for the production of a product or for the provision of a service using cost objects such as production orders. If there is not quantity structure available in the SAP system. you can provide actual costs for each material at the end of a period.11 Theory – Product cost accounting Product cost accounting carries out cost planning for the production of products or the provision of services as well as monitoring and analyzing actual costs. At the time of period-end closing. Pouyan Khatami/ Dipl. Depending on your requirements. the system can automatically create a cost estimate using these data. Using actual costing with the material ledger.1 Overview of product cost accounting When processing product cost planning.-Inf. Heimo H.11. Costs incur for the production of a product or for the provision of services. and product cost collectors. Thereby. If a quantity structure (BOM and routing) is available for a good in production planning. . you have the possibility to compare plan and actual costs for each phase of the production process.Product cost accounting is used to calculate costs for the production of goods or for the provision of services. different types of cost objects are available.Integrated business processes with SAP ERP 2. These variances are allocated to other components. 2. the value of the goods still in production (work in process) and the variances of cost estimate and actual costs are determined.-Wirt.Actual costing and material ledger issues the actual costs for each material at the end of the period. an actual price for the material in the closed period is calculated using these variances. production orders. Dr.-Wirt. These cost objects include sales orders. the costs for producing goods and services are calculated. Simultaneous costing and period-end closing are the main focus of cost object controlling. When costing a multilevel structure. The cost elements are determined using account determination for materials.-Inf. the cost component split is rolled up so that the original identity of costs is maintained in the analysis. the material. The cost component split groups cost elements into cost components. For example. Taymaz Khatami . The cost element itemization groups the costing items to cost elements. or cost component splits.Integrated business processes with SAP ERP Figure 64: Overview of product cost accounting (1) When processing a cost estimate with quantity structure.the selection date for the BOM and routing (quantity structure) .the validity period of the cost estimate (costing date from/to) .-Inf. The itemization includes detailed information concerning the cost origin.the price data for all material components and activities (valuation date) Costing results can be displayed according to items. the costing variant. Pouyan Khatami/ Dipl. quantities and prices of used materials and internal activities can be displayed. The order in which cost elements are grouped corresponds with their incurrence. or using activity type planning for activities and using the process master record for processes. and the lot size must be entered. cost elements.-Wirt. the plant. Adelsberger/Dipl. page 79 Copyright Prof. Dr. activity type master record. The dates are proposed by the costing variant and specify the following: . Heimo H.-Wirt. Heimo H. in which the standard cost estimate can be marked with a particular valuation variant. Therefore. Adelsberger/Dipl. When a cost estimate is done for a multi-level BOM. The company code and the period.-Inf.2 Price update The standard price originally entered in the material master is updated in price update with the price calculated in a standard cost estimate. To mark and release a standard cost estimate. This results in a price update. are set in the operation authorization. material costs. Figure 66: Cost rollup in product cost planning 2. costs are assigned to cost components in costing.The standard cost estimate must be free of errors (stats KA.-Inf. the following prerequisites must be met: . and production costs of all materials in a multi-level BOM are considered in the cost estimate of a higher-level material.Marking and releasing must be allowed. The responsible employee should enter the authorization once page 80 Copyright Prof. Dr. the standard cost estimate must be marked and released. free of errors).11. This means that cost components for the cost component split are passed upwards in the hierarchy to the cost estimate of the material on a higher level. the costs are rolled up. . Pouyan Khatami/ Dipl.Integrated business processes with SAP ERP Figure 65: Overview of product cost accounting (2) Cost rollup in product cost planning Cost rollup ensures that manufacturing costs.-Wirt. Taymaz Khatami . Therefore.-Wirt. When marking a standard cost estimate. Therefore. the information system features special reports. Pouyan Khatami/ Dipl. to calculate lowest values.g. you can valuate goods movements within SAP ERP and valuate inventories.Moving average price Using these prices. However.-Inf. It is possible to delete a standard cost estimate from a database (using a particular program. In the accounting and costing views. Taymaz Khatami . Dr. the standard cost estimate should always be checked for correctness before releasing it for a product. 2. Tax-based and commercial prices are used for purchased parts when processing inventory costing. page 81 Copyright Prof.3 Material master: Prices The planned prices 1.-Wirt. Figure 67: Price update 2. transaction CKR1). the results are updated in the material master as future standard price. When the standard cost estimate is released.11. e. you can branch directly into results of the standard cost estimates. Heimo H. Based on these results.Integrated business processes with SAP ERP in a period. An inventory costing can use prices for valuation and then update the costing results for finished and semi-finished products in these fields. the future prices are updated as current standard prices. You have the following options: . The standard cost estimate can be used to update the standard price.Standard price .-Inf. the standard price is updated. Adelsberger/Dipl.-Wirt. and 3 can be used for raw materials and purchased parts as well as for material valuation in cost estimate. A standard cost estimate can only be release once a period. Price control is an indicator controlling the price used for the valuation of the inventory of a material. In profitability analysis. Taymaz Khatami . Pouyan Khatami/ Dipl. a price according to price control is used. The difference between target costs and actual costs can be analyzed according to variance categories (e.-Inf.g.-Wirt.Integrated business processes with SAP ERP Figure 68: Material master: Prices 2. When the standard prices are updated by a standard cost estimate.-Inf. page 82 Copyright Prof.. standard cost estimates (or other material cost estimates) can be used to compare the revenues of the billed quantity with the cost component split of the product. The system can use the itemization of standard cost estimates for determining the target costs for production orders. this price can be used in cost object controlling. Moreover.-Wirt. goods movements are valuated in the system directly. Heimo H. Adelsberger/Dipl. The S price control represents the standard price for inventory valuation.11.4 Integration: Standard price and plan price The decisive function for material valuation is price control. The basis of the variance determination is the saved itemization. Therefore. Dr. The standard price is also a prerequisite for using the material ledger to determine an actual price. quantity or price variances). Dr.-Wirt. Adelsberger/Dipl. Heimo H. Pouyan Khatami/ Dipl.-Inf.-Wirt. Taymaz Khatami .-Inf.Integrated business processes with SAP ERP Figure 69: Integration: Standard price and plan price page 83 Copyright Prof. 2.-Wirt. Skip a possible error message with Enter. Figure 70: Process overview: Product cost accounting 2. 5. person.12 Practical application – Product cost accounting The integration of cost center accounting to production planning results from the assignment of work centers to cost centers. enter the formula key Prod.12. Only your activity type MF-xyy should be displayed. select the button for the match code help (F4) for the setup field. Select it.Integrated business processes with SAP ERP 2. machine. Pouyan Khatami/ Dipl. Choose Logistics  Production  Master Data  Work Centers  Work Center  Create (CR01) 1. the prices you just calculated become effective. 2. In the activity type field. Dr. Save your entries. Setup time (SAP001).-Wirt. Into the template fields. Go to the costing tab. field.12. Enter the current date as start date. Enter the new cost center CC-MF-xyy. Create a work center for plant Hamburg (1000). Press Enter. Enter the name PL-xyy into the work center field and enter person (0003) into the basic data work center cat. You will note that working at the new work center is more effective.button (copy) or press Enter. This is realized in the following.) determines where an operation is carried out and who carry out an operation. based on the PP case study. The tasks performed at that work center are valuated with allocation rates that are set by cost centers and activity types. Heimo H. Work center: The organizational unit work center (e.2 Integration of the new work center into the routing Next. Thus. In the window choose to copy all areas but costing. Call up the following transaction: Logistics  Production  Master Data  Work Centers  Routings  Routing  Standard Routings  Change (CA02) page 84 Copyright Prof. Adelsberger/Dipl. 3. enter plant Hamburg (1000) again and enter work center template manufacturing IV (1420). In the setup time row.1 Creating a new work center for a cost center Create a new work center to a cost center. Click the . 4. The work center features a particular capacity.-Inf. etc.-Inf. add your new work center that is valuated with your activity type to the manufacturing routing of the Speedstarlett.g. Taymaz Khatami .. the change of the activity type regarding the setup time was not recognized. and personnel time (1421). Save your entries.3 Carrying out a new product cost estimate In the PP case study.-Wirt. In addition. and in the bottom part of the screen. enter in the costing data tab the costing variant standard cost estimates (Mat) (PPC1).-Wirt. we were “successful” and the Speedstarlett can overall be produced cheaper. because production would not have been possible due to the high standard of integration of the SAP ERP system.-Inf. Double-click the description of operation 0010. you already received a comprehensive introduction in product cost estimate. Save the cost estimate ( or CRTL+S). which was previously responsible for the production of the Speedstarlett. As you can see. 2. Pouyan Khatami/ Dipl. In the setup time row of the activity type field. Choose your material Speedstarlett-xyy in plant 1000. Overwrite in the fields of the operation the field work center 1420 with your new work center PL-xyy. Taymaz Khatami . In upper part. 3. Leave the dialog with or SHIFT-F3. we brought a step of controlling forward. The new work center can produce for at least three Euros less than work center 1420. Overwrite the default value with 15 again and the activity type default value with MF-xyy. the itemization is displayed. Heimo H. you might have to delete the activity type for machine time and personnel time again. Accept the entries in the dates tab with Enter. delete the three activity types setup (1422). 4. enter MF-xyy and adjust the default value to 15 minutes. select itemization and protocol and confirm with Enter. If this is not the case. Moreover. the valuated BOM is displayed. 3. Accounting  Controlling  Product Cost Accounting  Product Cost Planning  Material Costing  Cost Estimate with Quantity Structure  Create (CK11N) 1. Confirm with Enter. 2. Enter material Speedstarlett-xyy in plant Hamburg (1000) and enter the current date as key date. Note: If the error message appears that activity type 1420 was not created for cost center 1000 CCMF-xyy. The material cost is calculated. Dr. 2.-Inf. you get the following product cost estimate at the end of the controlling case study. page 85 Copyright Prof. To complete this case study. Additionally. machine (1420). Press Enter. Solution: As a result. Adelsberger/Dipl. the costing version 01 and costing lot size 1.12. choose costs  itemization from the menu or choose F6. At that time. On the next screen. carry out a new product cost estimate and check the improvement resulting from the integration of the new work center.Integrated business processes with SAP ERP 1. Taymaz Khatami .-Wirt.-Wirt. Pouyan Khatami/ Dipl.Integrated business processes with SAP ERP Figure 71: New product cost estimate Speedstarlett: SAP system screenshot page 86 Copyright Prof.-Inf. Heimo H. Adelsberger/Dipl.-Inf. Dr. Adelsberger/Dipl.doc Thereby.-Inf. The subsequent case studies are based on the results of this case study. rename the document that you downloaded from this course’s download area as follows: 09-ManagementAccounting-xyy-zzz-surname. Then. you learned about the functional area management accounting. Heimo H.Integrated business processes with SAP ERP 3 Completion Congratulations! You completed the management accounting case study. name the document as follows: 09-ManagementAccounting-999-901-Mustermann. and your user number is WIP9-99. Finally. please contact your tutor prior to processing another case study. In the case study management accounting in SAP ERP. you need to replace xyy with your user number without the “WIP“ and without the hyphen (WIPx-yy) and replace zzz with the number of the client you are working on.-Wirt.e. Dr. please submit the carefully completed data sheet to your tutor (use support email address) for the case study management accounting. you are working on client 901. Taymaz Khatami . Pouyan Khatami/ Dipl.doc page 87 Copyright Prof. Example: Your name is Max Mustermann. Non-compliant data sheets will not be accepted. In case your data differs from the description in the script.-Wirt. i.-Inf. Please comply with the naming rules. List the two organizational units defined in controlling.-Inf. Dr. Pouyan Khatami/ Dipl.Integrated business processes with SAP ERP 4 Reflections 4.-Inf.1 Questions 1. True or false: When allocating cost centers using assessments. Adelsberger/Dipl. List the true cost objects. __________________________ __________________________ 2. Taymaz Khatami . What are four typical uses of internal orders? ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ________________________________________________________________________ 6.-Wirt. ____________________________________________________________________________ ____________________________________________________________________________ _________________________________________________________________________ 5. Describe the goal of profit center accounting. the original cost elements are used to track the movement from ender to receiver. ____________________________________________________________________________ ____________________________________________________________________________ _________________________________________________________________________ page 88 Copyright Prof.-Wirt. Heimo H. ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ _______________________________________________________________________ 4. What is the difference between marking a standard cost estimate and releasing a standard cost estimate? ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ _______________________________________________________________________ 3. -Inf. Adelsberger/Dipl. What are the requirements for assigning multiple company codes to a controlling area? ____________________________________________________________________________ ____________________________________________________________________________ _________________________________________________________________________ page 89 Copyright Prof. Pouyan Khatami/ Dipl. True or false: A secondary cost element is linked to a G/L account to ensure that expense postings pass to CO.-Wirt. Taymaz Khatami .-Wirt. Describe the goal of profitability analysis. Dr. ____________________________________________________________________________ ____________________________________________________________________________ _________________________________________________________________________ 9. The FI module is the only source of expense and revenue postings in CO. ____________________________________________________________________________ __________________________________________________________________________ 8.Integrated business processes with SAP ERP 7.-Inf. ___________________________________________________________________________ 10. True or false. Heimo H. Wrong! Periodic repostings and distributions used the original cost elements while assessments use secondary cost elements. Cost centers Real internal orders Real projects Networks Cost objects and profitability segments True or false: When allocating cost centers using assessments. - 4. Operating concern Controlling area What is the difference between marking a standard cost estimate and releasing a standard cost estimate? Marking enables the results of the standard cost estimate to be updated as the future standard price in the material master. Adelsberger/Dipl. - 6. - 2. Overhead orders (used to monitor costs incurred for a particular purpose such as conducting trade fairs or tracking maintenance repair work) Investment orders (used to monitor costs incurring during the construction of assets such as building a storage facility) Accrual orders (used to offset postings of accrued costs in CO) Orders with revenue (used to replace the cost accounting parts of SD customer orders if SD is not being used) Describe the goal of profit center accounting. List the true cost objects. List the two organizational units defined in controlling. Releasing a standard cost estimate enables the future standard price to be updated as the current standard price and the current planned price in the material master.-Inf.2 Standard solution 1. What are four typical uses of internal orders.-Wirt. the original cost elements are used to track the movement from ender to receiver. Dr. 3. 5. Pouyan Khatami/ Dipl. Taymaz Khatami . Heimo H.-Inf.Integrated business processes with SAP ERP 4. The goal of profit center accounting is to measure the profitability of areas of responsibility within the organization.-Wirt. page 90 Copyright Prof. True. page 91 Copyright Prof. Taymaz Khatami .-Inf. and Human Capital Management can also transfer expense and revenue postings to CO.Integrated business processes with SAP ERP 7. 8.-Wirt. Dr. Describe the goal of profitability analysis. Heimo H. True or false: A secondary cost element is linked to a G/L account to ensure that expense postings pass to CO.-Inf. 10. The FI module is the only source of expense and revenue postings in CO. What are the requirements for assigning multiple company codes to a controlling area? The company codes must have the same operating chart of accounts and the same fiscal year variant. Materials Management.-Wirt. True or false. 9. Adelsberger/Dipl. The goal of profitability analysis is to determine the profitability of market segments. Pouyan Khatami/ Dipl. False! Sales and Distribution.