AC410 Cost Center Accounting AC410. Release /11/2006

Transcription

1 AC410 Cost Center Accounting AC410 Release /11/2006

2 AC410 Cost Center Accounting AC410 Cost Center Accounting SAP AG 1999 SAP AG R/3 System Release 4.6C December 2000 Material number

3 Copyright Copyright 2004 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. SAP AG 2003 Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft, Windows, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iseries, pseries, xseries, zseries, z/os, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, and Informix are trademarks or registered trademarks of IBM Corporation in the United States and/or other countries. Oracle is a registered trademark of Oracle Corporation. UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group. Citrix, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, and MultiWin are trademarks or registered trademarks of Citrix Systems, Inc. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. MaxDB is a trademark of MySQL AB, Sweden. SAP, R/3, mysap, mysap.com, xapps, xapp, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. These materials are subject to change without notice. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP

4 Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.

5 Controlling AC040 Level 2 Level 3 5 days Cost Management and Controlling AC410 Cost Center Accounting AC690 Schedule Manager AC505 3 days 4 days Product Cost Planning AC605 5 days Profitability Analysis AC610 Profit Center Accounting 2 days 2 days AC B 2 days Executive Information System (EIS) 1 - Reporting AC412 2 days Cost Center Accounting: Extended Functionality AC415 Overhead Orders AC420 2 days Activity Based Costing AC510 3 days Cost Object Controlling for Products AC650 Transfer Prices 2 days AC515 3 days Cost Object Controlling for Sales Orders AC530 3 days Actual Costing / Material Ledger 2 days AC B 2 days Executive Information System (EIS) - Setting up the System AC B 1 day Executive Information System (EIS) 3 - Business Planning SAP AG 2001

6 Course Prerequisites SAP20 - SAP R/3 Overview (recommended) AC040 - Cost and Revenue Element Accounting (recommended) Basic knowledge and experience in cost accounting Practical experience in a Windows environment User note The training course material is not intended for self-teaching programs. You will only receive all course material in combination with the explanations provided by the instructor. Your material includes space for noting this additional information.

7 Target Group Project team members who are responsible for implementing Overhead Cost Controlling. Accounting staff who are responsible for planing, allocation, and analysis of organizational costs. Duration: Three days User notes The training course material is not intended for self-teaching programs. You will only receive all course material in combination with the explanations provided by the instructor. Your material includes space for noting this additional information. There may not be enough time for all of the exercises during the course. The exercises contain additional examples that are dealt with during the course. The participants can, however, use these examples to improve their skills once the course has ended.

8 Course Overview Content: Course Goals Course Objectives Course Content Course Overview Diagram Main Business Scenario (C) SAP AG AC

9 Course Goals This course will prepare you to: Configure and use Cost Center Accounting Plan, post, analyze, distribute or assess costs (C) SAP AG AC

10 Course Objectives (1) At the conclusion of this course, you will be able to: Identify the organizational units on which Overhead Cost Controlling is based Describe and maintain master data in Cost Center Accounting, and use other functions that apply to all master data Analyze cost center information using reports Determine the origin of postings in Cost Center Accounting, and process business transactions Explain the options available for periodic processing, and the configuration settings on which they are based (C) SAP AG AC

11 Course Objectives (2) At the conclusion of this course, you will be able to: Describe planning configuration, planning processes, and planning tools Create your own reports and report trees, and describe particular functions within reporting (C) SAP AG AC

12 Course Content Preface Unit 1 Course Overview Unit 5 Period-End Closing Unit 2 Organizational Units Unit 6 Planning Unit 3 Master Data Unit 7 Information System Unit 4 Transaction-Based Postings Unit 8 Summary Appendix (C) SAP AG AC

13 Course Overview Diagram Master data Event-based postings Period-end closing Planning Organizational units Information system (C) SAP AG AC

14 Main Business Scenario You belong to the IDES group's cost accounting department. Your organization is implementing SAP R/3, including the Cost Center Accounting module. You want to carry out allocations between cost centers as simply as possible, and with due consideration to the cost and benefits involved. You therefore decide to allocate costs between cost centers and allocate activities only to debit cost objects according to their source, as accurately as possible. You create the prices for these activities manually. Theses are prices that are manually determined in line with the market situation, and which are not determined in costing. As a member of the CO implementation project, it is your job to make all the settings required to represent your company's processes. (C) SAP AG AC

15 Organizational Units Content: Components belonging to the CO module Organizational Units (C) SAP AG AC

16 Organizational Units: Unit Objectives At the conclusion of this unit, you will be able to: Describe the organizational units on which Controlling is based Explain the options available for configuring organizational units in Overhead Cost Controlling (C) SAP AG AC

17 Course Overview Master data Eventbased postings Period-end closing Planning Organizational units Information system (C) SAP AG AC

18 Organizational Units: Enterprise Scenario You invite the FI project team to a meeting on the organizational structure of accounting within the IDES group. Although your focus is Overhead Cost Controlling, you need to discuss accounting as a whole in order to understand the way in which the different application components are linked. You also need to discuss the configuration options available for Overhead Cost Controlling, and the specific settings that are recommended to determine the optimum structure for your enterprise. (C) SAP AG AC

19 FI and CO: Standard Requirements Versus Flexibility EC- PCA CO Controlling Management accounting Cost accounting Various valuations Flexibility Profit Center Accounting FI Financial Accounting IAS GAAP GOB Tax audit External accounting Closing Legal requirements Standards The R/3 application component Controlling (CO) provides all the accounting functions required for effective Controlling. If an enterprise divides their accounting operations into internal and external accounting, then CO represents internal accounting since it provides those responsible for managing and checking an enterprise's operations with the information they require. CO comprises Cost and Revenue ElementAccounting, and, together with Enterprise Controlling (EC) - the application components Profit Center Accounting (EC-PCA) and Executive Information System (EC-EIS). It provides all the Controlling options that you require, not just those that enable you to meet legal requirements. In Financial Accounting (FI) you generate your financial reports like the balance sheet and the profit and loss statement. This is external reporting which must meet certain standards and conform with legal requirements. (C) SAP AG AC

20 Organizational Units Topic: Components belonging to the CO module (C) SAP AG AC

21 CO Components and Value Flows CO PA Profitability Analysis Profitability segment EC- PCA CO OM CO CEL Overhead Cost Controlling Cost centers Activity types Internal orders Processes Cost Element Accounting Sales orders Projects CO PC Warehouse production Product Cost Controlling Material valuation Profit Center Accounting FI Financial Financial Accounting Accounting Asset Expense Revenues HR Human Materials MM PP Resources Production SD Management S&D Controlling provides you with information for management decision-making. It facilitates coordination, monitoring and optimization of all processes in an organization. This involves recording both the consumption of production factors and the services provided by an organization. All data relevant to costs flows automatically from Financial Accounting to Controlling. As part of this process, the system assigns the costs and revenues to different CO account assignment objects like cost centers, business processes, projects, or orders. The relevant accounts in Financial Accounting are managed in Controlling as cost elements or revenue elements as appropriate. You use Cost Center Accounting for controlling purposes within your organization. It serves as a tool for monitoring overhead costs and assigning them to the location at which they occurred in line with their source. Product Cost Controlling calculates the costs arising from the manufacture of a product or the provision of a service. It enables you to calculate the minimum price at which a product can be profitably marketed. Profitability Analysis analyzes the profit or loss of an organization according to individual market segments. For each market segment, the system allocates the corresponding costs to the revenues. Profitability Analysis provides a basis for decision-making, price determination, customer selection, conditioning, and for choosing the distribution channel. (C) SAP AG AC

22 Overhead Cost Controlling CO PA Profitability Analysis EC- PCA CO OM CO CEL Overhead Cost Controlling Cost Element Accounting Internal orders Processes CO PC Product Cost Controlling Transaction-based postings - internal cost allocations - activity allocations - planning of costs - plan/actual comparisons - actual/actual comparisons Profit Center Accounting Overhead costs are those that cannot be directly assigned to the manufacture of a product, or the provision of a particular service. You assign all overhead costs to the locations at which they were incurred, or to the activities from which they arose. Cost centers are separate areas (within a controlling area) at which costs are incurred. You can create cost centers according to a number of criteria including functional considerations, allocation criteria, activities provided, or according to their physical location and/or management area. Activity types define the type of activity that can be provided by a cost center. Activity outputs supplied by one cost center (the sending cost center) to other cost centers, orders, or processes, represent the utilization of resources for this sending cost center. You valuate activities using a price calculated on the basis of certain business or management information. Business processes combine activity flows within an organization over and above individual cost centers. They can be used to control organizational processes in line with particular functions. Internal orders are used to plan, collect, and analyze the costs arising from internal activities. There are different methods for allocating values and quantities, depending on the type of CO object in question. In an enterprise scenario in which only costs are allocated, you can use plan/actual comparisons at period end to analyze costs. When allocating quantities, you can use extended analysis tools at period end which take operating rate into account. (C) SAP AG AC

23 Organizational Units Topic: Organizational Units (C) SAP AG AC

24 Organizational Units CO PA Profitability Analysis Operating concern Profitability segment EC- PCA CO OM CO CEL Overhead Cost Controlling Cost Element Accounting CO PC Controlling area Product Cost Controlling Profit Center Accounting FI Financial Financial Accounting Accounting Company Code HR Human Resources Materials Production Management S&D Plant MM PP SD The operating concern is the highest reporting level for profitability and sales and marketing controlling, and the central organizational unit in Profitability Analysis (CO-PA) used to segment and structure the market. Controlling areas structure the internal accounting operations of an organization within Controlling. They represent closed units that are used to calculate costs. All internal allocations relate solely to objects that belong to the same controlling area. Company codes are independent accounting units within FI. They represent the smallest organizational units for which an account group can be set up for the purposes of external reporting. External reporting covers the entry of all relevant business transactions and the generation of every document required for financial reports like the balance sheet and the profit and loss statement. The business area is an organizational unit within Financial Accounting that represents a particular level of operations and managerial area within a company. You can assign Financial Accounting transactions to a partiuclar business area. In Financial Accounting (FI) you can generate internal balance sheets and profit and loss statements on the basis of business areas. The plant is an organizational unit within Logistics. It is used to break an organization down according to production, procurement, plant maintenance, and material planning considerations. Plants are used in Materials Management, in Logistics, and in Production Planning and Control. In a plant either materials or goods are manufactured, or services are provided. (C) SAP AG AC

25 Controlling Area Customizing Table View Edit Goto Selection Utilities System Help Change Basic Data : Detail view Controlling area Basic Data 1000 Description CO Europe Activate component Person responsible Posting assignment Assignment Control CoCd COAr - Cross-company code cost accounting Currency Settings Currency type 30 Group currency Currency UNI Universal currency Currency & valuation profile Var. CoCd currency Active Further Settings Chart of accounts Fiscal year variant CCtr standard hierarchy INT International chart of accounts K4 Calendar year, 4 special periods H1 **Standard hierarchy CO area 1000 Reconciliation Ledger Reconciliation ledger activated Document type SA G/L account document The controlling area is the organizational unit in an enterprise that represents a closed system used for cost accounting purposes. It is not possible to make allocations between controlling areas. In the SAP Standard System, controlling area "0001" has been created, which you can use as a template. You make the settings for the controlling area to show the structure of your organization from the Controlling aspect. A controlling area may contain one or more company codes, which can operate in different currencies, if required. The assigned company codes must all use the same operational chart of accounts. You can use the control indicator to activate or deactivate certain components and functions in Controlling, depending on the fiscal year. (C) SAP AG AC

26 Assignments of Organizational Units Operating concern 0,1 1,n Controlling area 1 1,n Company code 1 0,1,n Plant Business area: Independent of Organizational units Since R/3 is a fully intergrated system, you need to assign organizational units to each other across the different application components. You therefore need to define the internal and external organizational units concurrently and assign them to each other. Having created the controlling area and the operating concern you then define their assignment. You can assign more than one controlling area to a given operating concern, enabling you to analyze these controlling areas together within the operating concern. You can link company codes and controlling areas to each other in different ways in accordance with the way your enterprise is structured. - If Financial Accounting and Controlling perspectives are identical, you can assign one company code to one controlling area. - If you assign more than one company code to a given controlling area, you are then able to carry out controlling on a cross-company code basis. You assign a plant to a company code (and therefore also to a controlling area) based on the valuation level. You can assign one plant, multiple plants, or no plant at all to a company code. Changes to assignments are not a problem provided you have not created any master data or transaction data. (C) SAP AG AC

27 1 : 1 Assignment Controlling area Currency UNI - Chart of accounts INT - Fiscal year variant K2 (12 posting periods) Company code Currency UNI - Chart of accounts INT - Fiscal year variant K2 (12 posting periods) This is a structure that contains identical views for Financial Accounting and Cost Accounting. The controlling area corresponds to the company code. You can use the following three currencies in Controlling for analysis purposes in the information system: Controlling area currency If the assignment is 1:1, you can only use the company code currency as the controlling area currency. The controlling area is managed using the controlling area currency. Object currency An object currency is defined for each account assignment object in CO. If the assigment is 1:1, you can define an object currency for the account assignment object other than that used for the controlling area or company code. Transaction currency This is used for posting a CO document. You need to use the same chart of accounts in Controlling and in the assigned company code. The fiscal year variants for the company code and the controlling area can have a different number of special periods, but must have the same number of posting periods. The period limits for the fiscal year variants must also match up. In FI, special periods are used for adjustment postings at year-end closing, or for revaluation. If FI has been set up with four special periods, but CO with only one, then the postings for the second, third, and fourth special periods in FI are posted to the first special period in CO. If there is no special period in CO, the FI postings in the special period are posted to the last posting period in CO. (C) SAP AG AC

28 (C) SAP AG AC

29 1:n Assignment Controlling area Currency UNI - Chart of accounts (operative) INT - Fiscal year variant K2 (12 posting periods) Company code 1000 Company code Currency UNI -Chart of Accounts: Operative INT - FY variant K2 (12 posting periods) -Currency $ -Chart of Accounts: Operative INT Local CAUS - FY variant K2 (12 posting periods) If you assign more than one company code to one controlling area, then your cost accounting can be cross-company code. You can make allocations in CO that are related to more than one company code. Reconciliation postings may be necessary, and can be made using the reconciliation ledger. Three currencies are provided for your valuation - Controlling area currency The controlling area and the company codes may differ for cost accounting that is cross-company code. For a controlling area, you candefine a currency that is the same as the currency for a company code, but you can also use an additional currency in CO. - Company code currency In cost accounting that is cross-company code, you can only choose any object currency if all (!) of the assigned company codes have the same currency, which must be the same as the the controlling area currency. Otherwise, the system automatically assigns the compay code currency to the account assignment object as an object currency. - Transaction currency Documents are posted to CO in the transaction currency. The operational chart of accounts is used by Financial Accounting and Cost and Revenue Element Accounting As well as the operative chart of accounts you can also have a chart of accounts that is country-specific (different account numbers), and is structured according to the legal requirements of its country. (C) SAP AG AC

30 The fiscal year variants in the controlling area and the company codes can have a different number of special periods. The number of posting periods must be the same. (C) SAP AG AC

31 1:1 or 1:n Assignment? When is a 1:n assignment advisable/necessary? If you require cross-company code reporting If you require cross-company code postings such as activity allocations or assessments, for example Where logistical considerations make it necessary (production in an associate plant) Where a calculation is to be spread over more than one company code If profit centers cover more than individual company codes When should I create a controlling area for more than one company code? If your company logistics make it necessary to implement cross-company code processes (production in an associate plant); if you require group costing; if you require multi-level production cost management; if you require cross-company code postings, for example, to allocate activities, activate internal activities, or for assessments. Profit Center Accounting and transfer prices stop at controlling area level. What restrictions do I need to take into account if I set up one controlling area only? In addition to the restrictions (mentioned above) for the chart of accounts, currency, and the fiscal year variant, you also need to note that you cannot carry out CO closing before final FI closing has taken place. From an organizational point of view, there must be one CO manager only for the company codes that are combined. The volume of data for one controlling area can be very considerable, meaning that performance may suffer as a result. If you use one controlling area, only one operating concern is possible, meaning that characteristics and value fields must be sufficient for all company codes. Automatic reconciliation postings are possible for cross-company code allocations only minus tax. It follows that to be able to use the function, the company codes must belong to a taxable entity. Changes to the assignment should not be a problem provided you have not created any master data or transaction data. In a productive system, combining company codes that were previously separate in a controlling area, or splitting a controlling area (1:n) into several new controlling areas necessitates conversion of data. (C) SAP AG AC

32 Organizational Structures in Controlling: IDES IDES Operating concern IDEA (UNI) Controlling area 1000 Europe (UNI) 2200 France ( FRF ) 2000 N.America/ Australia (USD) 6000 Mexico (USD) 5000 IDES Asia ( JPY ) CoCd 1000 IDES AG (UNI) CoCd 2100 IDES Portugal (PTE) CoCd 2200 IDES France (FRF) CoCd 3000 IDES US Inc. (USD) CoCd 4000 IDES Canada (CAD) CoCd 6000 IDES Mexico (local crcy MXN) (hard crcy USD) CoCd 5000 Japan (JPY) CoCd 2000 IDES U.K. (GBP) CoCd 2300 IDES Spain (ESP) CoCd 4100 SAP Australia (AUD) SAP created the operating concern IDEA for the IDES group. The SAP R/3 System collects results from across the globe, which can be evaluated in the Profitability Analysis application component according to different criteria. The internal accounting requirements of the IDES group are met through the use of different controlling areas. These include both scenarios for cross-company code controlling areas and scenarios in which one company code is assigned to one controlling area. Internal accounting for most European companies is carried out in controlling area 1000, enabling cross-company code controlling for the companies assigned to this controlling area. This is possible because all the assigned companys use the same chart of accounts and have the same number of posting periods. Within the French subsidiary, the decision was made to use the country-specific chart of accounts as the operative chart of accounts. For this reason, the French subsidiary requires its own controlling area. (C) SAP AG AC

33 Organizational Units: Unit Summary You are now able to: Describe the organizational units on which Controlling is based Explain the options available for configuring organizational units in Overhead Cost Controlling (C) SAP AG AC

34 Exercise Data AC410 Explanation of the symbols in the exercises and solutions Exercises Solutions Topic objectives Business scenario Tips & tricks Warning or caution Exercise data Type of data Data in the training system Controlling area 1000 Company Code 1000 Standard hierarchy H1 Business areas 8000 (external services) IS## (internal services consulting ##)* Profit center 1400 (internal services) 1402 (administration) 1600 (external services) Cost center category 8 consulting * Cost elements (training costs) * (salaries) (telephone costs) (vehicle costs) (office supplies) (C) SAP AG AC

35 Statistical key figures Internal orders Condition types *Need to be created (IT supplies) 9100 (employees) Co. A cons. (Company A consulting)* Co. B cons. (Company B consulting)* Resource prices must be defined* (C) SAP AG AC

36 Exercises Unit: Organizational Units Topic: Organizational Units At the conclusion of these exercises, you will be able to: Display the company codes assigned to controlling area Check which control indicators are activated in the controlling area Explain different settings in the controlling area A new department was formed in the IDES subsidiary in Germany. This department deals with enterprise consulting for installation and implementation of software. 1-1 Your consulting department is assigned to controlling area 1000-CO Europe, where there are settings already in use that you wish to check Which assignment control (controlling area : Company code 1:1, or 1:n) has been set in the basic data? Use the F1 key to call up more information on the fiscal year variant. Do the number of special periods in company codes and the controlling area have to be the same? Check whether Cost Center Accounting, Profit Center Accounting, and commitments management are activated in controlling area How many company codes are assigned to controlling area 1000? (C) SAP AG AC

37 1-2 Another enterprise would like to install the R/3 CO module. There is currently only one company code, meaning that the enterprise would be displayed using a controlling area:company code 1:1 assignment. However, it can be seen that the enterprise will expand significantly, including abroad. You would therefore need to integrate new company codes into the controlling area. Which settings for assignment control and currency (type) would you have to make to enable new company codes to be added to the controlling area later on? In the following exercises, you will be working in Customizing, and in various applications. To facilitate this, it is recommended that you open several windows (sessions) (System Create session). You can switch from one session to another at any time. You can optimize user-friendliness by adding frequently-used menu paths to your favorites. (C) SAP AG AC

38 Solutions Unit: Organizational Units Topic: Organizational Units The following menu path abbreviations are used in the solution: Customizing path: IMG: Tools Accelerated SAP Customizing Edit Project Display Icon SAP Reference IMG Cost Center Accounting path: CCA: SAP Menu Accounting Controlling Cost Center Accounting 1-1 IMG: Controlling General Controlling Organization Maintain Controlling Area Maintain Controlling Area Select controlling area 1000, and display the detail screen. Cross-company code cost accounting has been selected for this controlling area It is possible to have a different number of special periods. The number of posting periods must be the same. The period limits for the fiscal year variants must match up In controlling area 1000, go to the Activate components/control indicators screen. Cost Center Accounting, Profit Center Accounting, and commitments management are activated Switch to the Assignment of Company Code(s) view for controlling area Four company codes (1000, 2000, 2100, 2300, and more company codes for the exercises) are assigned to controlling area (C) SAP AG AC

39 1-2 The assignment control in the controlling area must be set to Cross-company code cost accounting, although you initially only assigned one company code. The currency type controls how the currency is determined for the controlling area. To enable other company codes that are to be assigned to the controlling area to have different (local) currencies, select currency type 30 (group currency). This must be set up as the first local or parallel currency in the company codes. This guarantees data transfer for FI/CO, and future additions can be made without any problems. To enable all currencies in the controlling area to be updated, you need to set the All currencies control indicator. (C) SAP AG AC

40 Master data Content: Cost centers Cost Elements Activity types Statistical key figures Functions for all master data (C) SAP AG AC

41 Master Data: Unit Objectives At the conclusion of this unit, you will be able to: Describe how best to structure the standard hierarchy Create cost centers Distinguish between G/L accounts and cost elements Create cost elements in Controlling, and explain alternative methods for creating them Create activity types and plan manual prices for them on different cost centers Create statistical key figures Update master data using collective processing Explain the time dependencies of master data Create master data groups and explain how they are created (C) SAP AG AC

42 Course Overview Master data Eventbased postings Period-end closing Planning Information system Organizational units (C) SAP AG AC

43 Master Data: Enterprise Scenario The manager of the Controlling department outlines the cost center structure of the organization, together with the respective management areas. You are to portray this structure in the system as a standard hierarchy. You need to assign each cost center to this structure to portray all of your enterprise. Financial Accounting informs you that the company codes are set up. In Controlling you can now start creating corresponding cost elements. The consultants that work for your company need to be able to settle the services that they provide to customers directly to a cost object (internal order). You want to allocate the services of junior and senior consultants separately. You want to use statistical key figures as the tracing factor for repostings and allocations at period end. Although master data remains relatively constant for long periods of time, some maintenance will be required as the enterprise grows and changes. You familiarize yourself with the variety of tools that exist for this purpose. (C) SAP AG AC

44 Master Data and Transaction Data Master data Transaction data Cost Elements Cost centers Activity types Statistical key figures Line items Totals records E V A L U A T I O N In Overhead Cost Controlling, there is a difference between master data and transaction data. Master data is information that remains unchanged over a long period of time. Transaction data are used in the short-term and are assigned to master data. Cost elements describe the origin of costs. Cost elements are defined as either primary or secondary. Pimary cost elements arise through the consumption of production factors that are sourced externally. Secondary cost elements arise through the consumption of production factors that are provided internally (that is, by the enterprise itself). Cost centers represent areas of responsibility/management areas that generate and influence costs. Activity types categorize production and service activities provided by a cost center to the organization and used for allocating costs of internal activities to the originators of the costs. Statistical key figures (values that describe a cost center) are used as the basis (tracing factor) on which to make allocations (assessments, distributions) and to analyze statistical key figures. (C) SAP AG AC

45 Master data Topic: Cost centers (C) SAP AG AC

46 The Organizational Structure as Standard Hierarchy H1 IDES Europe H1000 CoCd 1000 Germany H2000 CoCd 2000 GB H2100 CoCd 2100 Portugal H2300 CoCd 2300 Spain H1010 H1200 H1300 H1400 Internal Finances & Administration S&D Technical Department H1110 Executive Board H1120 Internal Services H1210 Admin. H1220 Human Resources H1230 Purchasing Before you can create cost centers, you need to define a standard hierarchy, the name of which you enter when creating the controlling area. The standard hierarchy is a classification structure to which all cost centers within a controlling area must be assigned. You can structure/classify your cost centers to meet your requirements. However, it is useful to structure them in the same way as your company is structured (decision-making, controlling and management areas). These separate areas usually correspond to the functional areas represented in the Enterprise Organizational Diagram. (C) SAP AG AC

47 Cost Centers and The Standard Hierarchy H1: IDES Europe H1000: CoCd 1000 H1010: Internal Processing cost centers 1110 Executive Board 1110 Executive Board H1120: Internal Services 1000 Internal services 1200 Cafeteria H1200: Finance & Administration H1210: Administration H1200: Finance & Administration H1000: CoCd 2000 Cost centers are where costs are incurred. You can set up cost centers based on functional requirements, distribution criteria, activities provided, geographical factors, and/or areas of responsibility. For overhead cost controlling, you combine cost centers of similar types, according to whether they have decision-making, supervisory (checking), or managerial functions. You create a cost center standard hierarchy to represent these different types of cost center in a structured form. Each level or node of this standard hierarchy represents a cost center group. As of 4.6, you can assign cost centers and nodes on one hierarchy level. You can create or change cost centers either by using the appropriate function from the menu, or when maintaining the standard hierarchy. Cost centers that you created or changed in the standard hierarchy have an inactive status, meaning that they are not regarded as CO account assignment objects. Assignments are checked and the cost center is released as a transaction object, during activation but not before. Activation can be started in collective processing. If you want to assign a cost center to another part of the hiearchy, you can do so when maintaining the standard hierarchy area by simply reassigning the cost center. In other words, you do not need to make changes to your cost center master data. You can change the assignments of the organizational units company code, business area, or profit center during the course of a fiscal year under only if the following conditions hold: - The currency of the new company code is the same as that of the old company code. (C) SAP AG AC

48 - You post plan data only in the given fiscal year. - The cost center is not assigned to a fixed asset, a work center or a HR master record. (C) SAP AG AC

49 Standard Hierarchy and Enterprise Organization H1 Controlling Area 1000 Inc. Company Code 1000 H1000 Inc. America Controlling H1010 Accounting Legend HR Organizational unit Attribute Cost center group Controlling Cost center The enterprise organization portrays the organizational structure of the enterprise across all the applications. This enables you to use a central maintenance and analysis interface for different organizational units. In the enterprise organization, you can portray the HR organization structure, the standard hierarchy for cost centers, and the standard hierarchy for profit centers. You do not need to implement HR. In this case, the enterprise organization can be generated from the standard hierarchy. Advantages of the enterprise organization Clarity Time-dependent Inheritance principle (C) SAP AG AC

50 Cost Center Categories Allowed Allowed value value Lock Lock indicator indicator CCtr cat. Descrip. 1 Production 2 Service CCtr 3 Sales 4 Admin. 9 Clearing CCtr Z... Quantity ActPri ActPri ActRev PlanPri PlanSec PlanRev Commit ments Cost center Default values Indicator Activity type can be output only by the assigned cctr category The cost center category is an indicator in the cost center master data, which specifies the category for the cost center. Examples include administration, production, or sales & distribution. You can use your own cost center categories, or use those supplied by SAP. Cost center categories enable you to assign the same characteristics to similar cost centers. For example, you can allow particular activity types only for particular cost centers. This is useful to prevent production activites from being posted to administrative cost centers by mistake. You can also use the cost center category for cost calculation, where it controls what percentage of the overhead to apply to that cost center category. In Customizing, you can define lock indicators for each cost center category, or specify that the managing of quantities on cost centers is allowed. When you assign a cost center to a particular category (you do this when creating the cost center), the corresponding lock indicators and allowed values for this category are proposed as default values for this cost center. (C) SAP AG AC

51 Exercise Tasks: Structuring the Example Enterprise B## Consulting dept B10## Allocation cost centers B20## Consulting support B30## consulting 101## Telephone 201## Organization 202## IT Service 203## Vehicles 301## Consulting FI/CO 302## Consulting LO (C) SAP AG AC

52 Master data Topic: Cost Elements (C) SAP AG AC

53 The Chart of Accounts Example: International Chart of Accounts Financial Accounting Financial current assets and shortterm capital Nonoperating stock Material expenses Revenues 4 Expense accts Financial Accounting Revenue/ Balance sheet changes/ Active internal activity Finished and halffinished products Current year P & L Primary Second. cost cost elements elements 5 6 Second. cost elements Revenue elements Controlling The chart of accounts contains all the general ledger (G/L) accounts belonging to Financial Accounting. From the cost controlling viewpoint, a circular system exists because the expense and revenue accounts in Financial Accounting correspond to primary cost and revenue elements in Controlling, and because postings in FI are passed on in realtime to Cost and Revenue Element Accounting (CO-OM-CEL). In addition, it is only in Controlling that you can create secondary cost elements. These are used to record internal value flows like activity allocations, assessments and settlements. (C) SAP AG AC

54 The Cost Element CO Primary cost elements Primary cost element Imputed cost element External order settlement P & L accounts G/L accounts Balance sheet accounts FI Secondary cost elements Internal activity allocation Assessment Overheads Internal order settlement Revenue elements Revenue element Sales deduction Expense accounts Revenue account Accounts posted to directly, such as bank accounts Accounts posted to indirectly, such as reconciliation accounts The integrated nature of the R/3 System means that you need to create expense accounts in Financial Accounting with corresponding primary costs elements in Controlling. This ensures that you can reconcile expenses in FI with primary costs in CO. Before you can create primary cost elements in CO, you first need to create them as G/L acccounts in FI. To be able to post to a primary cost element, you require a cost-carrying object (such as a cost center) to identiry the origin of the costs. Examples of primary cost elements are material costs and salary costs. Secondary costs elements are used exclusively in CO to identify internal cost flows such as assessments or settlements. They do not have corresponding general ledger accounts in FI and are defined in CO only. When you analyze revenues in cost controlling, the R/3 System records them as revenue elements. Revenue elements are primary cost elements. When you create a cost element, you must assign a cost element category. This assignment determines the transactions for which you can use the cost element. For example, category 01 (genearal primary cost elements) is used for the standard primary postings from Financial Accounting or Materials Management. (C) SAP AG AC

55 Automatic Creation of Cost Elements Default settings Fr. Account To Account Acc. cat. Description Primary cost element Assess. cost element You can create cost elements automatically by making default settings that are used to specify the cost element, or cost element interval that you wish to create. You also specify categories for the cost elements. You only create primary cost elements if the chart of accounts contains the corresponding G/L account. The R/3 system uses the name from the master data for G/L accounts in FI for the cost element. However, you can change this name in CO. From 4.6, when setting up the processing for the chart of accounts directory in FI Customizing, you can make settings to trigger automatic generation of cost elements when a G/L account is created. You must, however, include the account number in the settings for automatic creation of cost elements. Secondary cost elements are created for all specified cost elements, and the name is taken from the cost element category. Once you have entered the default settings, you create the cost element in the background. (C) SAP AG AC

56 Business scenario Organization Assessment: by % FI/CO Consulting Sen. Jun. Company A Telephone IT Service Direct Activity allocation Periodic reposting: By telephone units Assessment: by % Number of PCs LO Sen. Company B Consulting Jun. Vehicles Direct Activity allocation Assessment: by % of km's traveled The overview above displays the enterprise organization from your exercise activities. Here the portrayal of the method used for crediting cost centers seems to be too early. However, it is useful to provide a preview at this stage. To make an assessment or to allocate activity directly, you need secondary cost elements. As you can see above, some of the cost centers in the exercise scenario will use assessment to make credits, or will allocate activity directly. This overview shows you why (!) you create which secondary cost elements in the exercise. You can take this overhead slide from the folder and use it as a helpful overview thoughout the course. (C) SAP AG AC

57 Master data Topic: Activity types (C) SAP AG AC

58 Activity Types 1 Create activity type Senior consulting Default values 2 Plan price of activity type on cost center Process Project Cost center: FI/CO consulting Cost center ,000 Order Activity document , hours consulting The activity type classifies the specific activities that are provided by one or more cost centers within a company. If a cost center provides activities for other cost centers, orders, processes, and so on, then this means that its resources are being used. The costs of these resources need to be allocated to the receivers of the activity. Activity types serve as tracing factors for this cost allocation. In an internal activity allocation, the quantity of the activitiy, such as the number of repair hours, is entered into the R/3 System. The system calculates the associated cost based on the activity price and generates a debit to the receiver and a credit to the sender for both the quantity and costs. Internal activity is allocated using secondary cost elements, which are stored in the master data of the activity types as default values. You can restrict the use of the activity type to cretain types of cost centers by entering the allowed cost center categories in the activity type master record. You can enter up to eight allowed cost center categories, or leave the assignments "unrestricted" by entering an asterisk (*). The activity type category is used to determine whether, and how and activity type is entered and allocated. For example, you can allow some activities to be allocated directly, but specify for others that they are either not allocated, or allocated indirectly only. (C) SAP AG AC

59 Cost Center/Activity Type Activity Output/Price Planning Year 2000 Periods 1 to 12 Cost center FI/CO consulting Acty type Acty price Price unit L Sen. consulting To enable internal activity allocation, you need to specify which cost centers provide which activity types at what price. You do this in the R/3 System by planning the activity output/prices for a cost center. Cost center/activity output planning functions here in the same way as an additional master record. For direct activity allocation, you enter the quantity of the activity to be allocated manually. To enable both costs and activity to be allocated, the R/3 System has to valuate the activity quantity allocated at the price specified by the sender for this activity type. For a direct activity allocation, the plan price for the combination "cost center/activity type" is used for this calculation. You can enter the planned price either manually, or have it calculated by the system automatically within planning. If you want to set the price manually, you need to set the price indicator to 3 (manual). You can use this procedure if your price calculation is not complex, for example where the prices required for your rates are determined within your organization and do not depend on internally produced activities, or where the rate depends on the prices of external suppliers and not on the costs of the cost center. Automatic calculation of plan prices is covered in course AC412. (C) SAP AG AC

60 Master data Topic: Statistical Key Figures (C) SAP AG AC

61 Statistical Key Figures Statistical key fig. Months Employee (fixed value) Telephone units (total value) _ (average) (total) Statistical key figures such as number of employees or length of phone calls, are statistical values that describe cost centers, profit centers, and overhead orders. They can also describe a value for a particular activity provided by a cost center, such as the number of employees who make repairs at the transport cost center (an activity-dependent statistical key figure). You can post both plan and actual statisical key figures. You can use statistical key figures as the tracing factor for periodic transactions such as distribution or assessment, and for key figure analysis. You define statistical key figures as a fixed value or as a totals value: The fixed value (such as "employees") is carried over from the period in which it is entered to all subsequent periods of the same fiscal year. You need enter a new posting only if the value changes. The fiscal year total is the average of the period totals. You post the totals value (for example "telephone calls") only to the period in which it was entered. For totals values, the fiscal year total is the total of all period values. You can transfer statistical key figures from the Logistical Information System (LIS) by assigning a key figure from the LIS to a statistical key figure in Cost Center Accounting. (C) SAP AG AC

62 Master data Topic: Functions for all master data (C) SAP AG AC

63 Creating Time-Dependent Master Data CCtr: FI/CO consulting Valid from 01. Jan.... to Period under consideration: 31. Dec... Resp. person Jan Jun Conrad Jul Dec Reece You can store master data fields for cost centers, cost elements, and activity types as time-based. If you change one of these fields for a particular timeframe, the system creates a new master record containing the new master record for this period. This means that several database records are maintained for each individual master record. In the above example, the "Responsible person" field is time-dependent, meaning that you are able to enter the different cost center managers as they change over time. You specify whether individual fields are time-based in Customizing. Certain fields, such as the assignment of a cost center to a company code, a business area, or to a profit center, are defined by SAP as time-dependent and this time cannot be reduced if you have made actual postings to this cost center in the current fiscal year. Since time-dependent data storage can result in large volumes of data, you should define only important fields as time-dependent. The Cost center assignment to the standard hierarchy area is a non-time-dependent field. This means that when you change the assignment due to the current assignment, the system prepares historic and current cost center information. If you want to extend the validity period of a master data record, access master data maintenance and create a master record for the extended period in question. To avoid filling out the same master data fields, you can copy from the existing master record. (C) SAP AG AC