SAP Controlling Concept.pdf

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

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

Use of costing sheet:

In the costing sheet, you determine the following: The direct costs to which overhead is applied (calculation base) The conditions under which overhead is applied (dependency) Whether overhead is calculated on a percentage basis or on a quantity basis The amount of the overhead percentage, or the amount of overhead for each unit of measure The validity period for the overhead Which object (cost center or order) is credited, and under which cost element for actual postings (credit key)    

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Overhead cost elements:

IMG à Controlling à Product Cost Controlling à Product Cost Planning à Basic Settings for Material Costing à Overhead à Maintain Overhead Cost Elements

Overhead cost elements used to define overhead to products.

Calculation Base:

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

Product Costing fastfacts Define calculation base Define percentage overhead rates Define costing sheets Define overhead keys Define cost component structure:

Define structure Define cost component Assign cost elements to cost components Product costing  is a tool for planning costs and establishing prices for materials. It

is used to calculate the costs of goods manufactured and the costs of goods sold for each product unit.

If costing is carried out on the basis of data in Production Planning (PP), then the cost estimate is a product cost estimate with a quantity structure  (for example, BOM and routing). If costing is carried out on the basis of data that you enter manually, then the cost estimate is a product cost estimate without a quantity structure.

Product costing belongs to both the Production Planning (PP) Module and the Controlling (CO) Module. Cost Object Controlling is used in the following areas: § Order Related Production. § Repetitive Manufacturing. § Process Manufacturing. § Sales Order Related Production. § Engineer to Order. Controlling area OX06 Controlling area is an organizational unit within a company that represents company for cost accounting purpose. Controlling area can have more then one company code assigned to it, but one company code can have one and only one controlling area. All company codes under same credit control are must have same operative charts of accounts. IMG --> Controlling --> G/L--> organization --> Maintain controlling area OX06

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

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

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

Characteristics & Values in SAP COPA

Cost elements: Primary & Secondary Cost center is a cost element classifies the organization's valuated consumption of production factors within a controlling area. Cost center is an organizational unit within a controlling area that represents a defined location of cost incurred. It can be defi ned based on various criteria such as functional requirements, allocation criteria,physical location etc.

Primary Element -

Primary costs that originate outside the company; relate directly to the income statement in FI and must be included in the FI Chart of Accounts. All Primary cost elements gets linked to Income statement. Secondary Element -

Secondary costs that result from internal allocation activities; NO relation to G/L accounts in FI. These accounts are exclusively for cost accounting and are only maintained in CO.

Business process associated with the SAP CO module:

Subcomponents of the SAP Controlling (SAP CO) Module: 

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CO-OM - Overhead Management - CO-OM-CCA - Cost Center Accounting - CO-OM-OPA - Internal Order Accounting - CO-OM-CEL - Cost Element Accounting - CO-OM-ABC - Activity Based Costing CO-PCA - Profit Center Accounting CO-PA - Profitability Analysis CO-PC - Product Costing