November 2012

SAP Controlling Event Based Posting

For each CO posting, the system creates a document, to which a unique number is assigned. One of the CO project team shows you how he grouped the CO business transactions and then assigned them to document number ranges.To check the FI/CO interface, you post some documents on a preliminary basis.You want to display the data on the cost centers using different reports. Investigate the reports reports contained in the standard system.You explain the various reporting tools to the other members of the CO project, to show their flexibility.

Posting documents from HR and MM are often very extensive. Try to devise as easy ways as possible to correct faulty account assignments in CO.As yu require information on future payment commitments in your cost center, consider the use of commitments.You want to enter all activities, which you provide for a customer, on a cost object. You can use this to create the billing documents.

Document Number Assignment

The various activities that change an object (such as, a cost center, or an order) appear in the R/3 system as business transactions. You need to define number intervals for all business transactions that generate CO documents. It is possible to copy document number intervals from one controlling area to another.There are two steps to issuing number intervals for documents :

- You group more than one transaction together. If you want to assign a different number interval to each transaction, you can create a group for each transaction.
- You assign the group to an internal or external number interval. This enables you to use one group of number intervals for similar transactions.
You define number intervals for CO documents independently of fiscal year. The document numbers can be assigned in ascending order. SAP recommends that you create different number interval groups for actual and plan transactions.This ensures that reorganization programs that run separately for actual and planning data also reset the number intervals separately.

Event-Based Postings: Integration

You can enter primary costs either directly in Financial Accounting (as for an invoice in Accounts Payable) or they can be generated from other applications (as for a goods movement in Materials Management) and then transferred to FI. These business transactions (events) generate FI documents that are required for purposes of external reporting within accounting. These documents are stored in a central document file for external accounting documents. FI documents contain at least two line items and must balance to zero.Line items are also written in Controlling for these business transactions if they are also posted to CO account assignment objects (such as cost centers). The CO posting is often a one-sided entry, as only the income statement postings are posted to CO. The line items record the business transaction from a cost controlling standpoint, and are managed in a CO line item file. In addition, the R/3 System summarizes all line items to form totals records, which in turn are stored in a CO totals record file.

Account Assignment Logic - Posting to Cost Center

Cost and revenue postings in CO can trigger subsequent true and statistical postings:
- True postings can be processed, and can be allocated or settled with other controlling objects. Only true postings (and only one) can be made to CO. This is where the information is, that is used transferred to FI for reconciliation purposes.
- Statistical postings are only used for information purposes. You can make as many statistical postings as you wish.
The account assignment object determines whether a posting is statistical or true, in other words, the account assignment is either a true or statistical object. For example, the master data of an overhead cost order are used to determine whether the order is true or statistical. Only true postings are made for a true order, and likewise, only statistical postings are made for a statistical order. The cost center is the exception to this rule. You can make true and statistical postings for a cost center.

If you want to post CO costs, you need to use the source document to identify the corresponding true CO account assignment object. You can enter additional statistical objects, or the system can derive them. In this simple example, the cost center is entered into the FI document, so that the true CO posting can be made.The system transfers the profit center from the master data for the cost center, for the statistical posting.You always make statistical postings to the profit center.

Account Assignment Logic - Posting to Cost Center and Order

During posting, only a true account assignment object can be transferred. The only exception to this rule is the account assignment to a cost center, and an additional, true account assignment object. In this case, the system always updates the cost center statistically. If you specify a true order and a cost center in the posting row as described in the example above, then the true posting is made for the overhead cost order. Statistical postings are entered for the cost center and the profit center.However, if the order is only statistical, then it is posted to as such, and the cost center receives true postings.

You can analyse statistical postings to cost centers in the Cost centers: Actual/Plan/Variance report (scroll down in the report).You can only assign one object type to each posting row. This means that you cannot post the same transaction row to more than one cost center, or order, and so on.

Account Assignment Logic - Revenue Postings

Revenues can only be posted as true postings to a profitability segment, sales order, sales project, or to a true order that can have revenues. Revenue postings to the profit center are statistical, the same as for cost postings.Revenues can also be recorded as statistical values on cost centers .

Default Account Assignments and Automatic Account Assignments

You can define automatic account assignments or default account assignments for postings to primary cost elements. The R/3 System then automatically includes the specified (additional) account assignment for the primary postings you make. You define automatic and default account assignments for cost elements that you always post to a particular cost center. You can also define the assignment of an overhead order or profit center to a cost element. Whether automatic or default,the account assignments are default values that can be overwritten in the application.

Automatic of default account assignments are required for primary cost elements used in automatically-generated postings such as prices differences, exchange rate differences, and discounts.

You enter the default account assignment in the cost element master record. Here, you enter the account assignment at controlling area level and at account level.You enter automatic account assignments in Customizing in the activity "Automatic Account Assignment". You can enter the account assignments at different levels:
- Controlling area, account, and company code
- Controlling area, account, company code, business area and/or valuation area

- Profit center

When the system is deriving the information, it determines the most detailed account assignment, so it reads the entries in Customizing first. If the system does not find any data here, then it uses the master data for cost elements. The assignment objects defined for automatic account assignments therefore take priority over the additional account assignments for the default account assignment.

Validation

You can increase the accuracy of the CO data by using valdiation and substitution. In validation and substitution, the R/3 System che cks whether the data entered meets one or more of the conditions that you defined. These checks take place during data entry, thereby ensuring that only valid data is posted.

You create validations and substitutions for the controlling area and for a particular event. An event is a particular point in transaction processing. The following events have been defined for the CO component:
- The "line item" (0001) event uses data from the CO document header (COBK) and the CO coding block (COBL). It controls the posting in both external accounting and in CO.
- The "document header" (0100) event uses data from COBK and affects only manual CO postings such as repostings or activity allocations.
- The “CO internal posting: Sender/Empfänger“ (0002) event is only used for CO internal postings,and is used for checking sender-receiver relationships in periodic allocations.

You use validation to carry out validity checks on objects such as cost elements or cost centers. If the conditions you specified for executing business transactions are not met, the R/3 System displays a user-defined message. This could be a warning, error, or information message, or the system stops your posting with immediate effect.

You can also carry out validation checks when making substitutions. However, if your condition is met for a substitution, the R/3 System substitutes the values with others defined by you, without informing the user of this change.An additional event - the order event (0010) is defined for substitutions. This is used only for
collective processing of order master data.If you have defined a substitution that contradicts a validation condition, the system informs you of this by displaying a message. We can therefore say that validation has priority, or is "stronger" than substitution.

Automatic Commitment

Commitments are payment obligations that are not entered into the accounts, but at a future date lead to actual costs. They are incurred in the purchasing function, in the "Materials Managment" component:
- The internal communication for a purchasing request is known as a purchase requisition (from the ordering party to the purchaser). A purchase requisition is a provisional obligation, that can be changed at any time. You do not need to assign a CO object to a purchase requisition row. If you do not do so, then the commitment is not displayed in CO.
- A purchase order is a contractual agreement specifying that goods or services from a vendor will be taken under certain, agreed conditions Therefore, a purchase order is a binding obligation, as it is based on a contractually fixed agreement. For a purchase row that is assigned to a cost element, you need to specify a CO object, so the commitment is also displayed in CO.

If you create a purchase order with reference to a purchase requisition, the commitment is reclassified (as a purchase order commitment) in CO.The commitment is reduced by processing goods receipts against the purchase order. Actual costs are posted to the CO object. This business transaction is continued until the purchase order is processed, and the commitment amount is zero. You need to activate commitments management in the controlling area in CO. Additionally, the cost center may not be locked for commitments (locking indicator).Commitments are not reduced when you create an outline agreement. These are only incurred when you create the contract release order (contact), or goods release order (scheduling agreements).

SAP Controlling Transfer Control

In Customizing for transfer control, you can specify what cost estimates are used.You can define a strategy in the transfer control for transferring the following cost estimates:
Ÿ Future, current, previous standard cost estimates (costing type 01).
Cost estimates with period-based transfer control (cost estimates with the same key- that is, with the same costing variant, version, and, if applicable, period).You can define such a strategy for the following:
Transfer of cost estimates in the same plant.
ŸCross-plant transfer of cost estimates.

Material Cost Estimate with Qty Structure

When you cost a new product, you can avoid having to recost the entire product structure by transferring automatically existing (such as released) cost estimates for assemblies and raw materials.In Customizing for transfer control, you can specify what cost estimates are used. The key for transfer control is assigned to the costing variant.Requirement: You must use the same cost component structure.

Material Cost Est. Without Qty Structure

In material costing without a quantity structure, one of the transfer strategies in the costing variant specifies the following sequence for material items:
The system first searches for a material cost estimate in accordance with transfer control.
ŸIt then proceeds according to the material valuation strategy.
This applies to the following:
ŸManual entry of a material item
ŸWhen making entries using Cut, Copy and Paste
This does not apply to multilevel unit costing when you are transferring with drag-and-drop. In such cases, you can only transfer the cost estimate as the original or as a copy.

Costing Run

Example of application: You want to ensure that all the materials in your plant have a standard cost estimate. To this end, you define a transfer control ID whose sole strategy is to find a current standard cost estimate. After selection (and structure explosion), you receive all the materials that do not have a current standard cost estimate.In the General Data section of the costing run, the transfer control ID is proposed from the costing variant.
Selection: When selecting, the system also checks whether a material cost estimate already exists for the material in accordance with transfer control. If one exists, the material is not included in selection. In the above example, Pump P-100 is not selected.Exception: If you select Always recalculate, the check step with transfer control does not apply. n Structure explosion: The BOMs are exploded for the selected materials. The system then checks whether material cost estimates according to transfer control exist for the components. If cost estimates exist, the components are not included and are not further exploded. In the above example, this applies to Shaft 100-300.

Cross-Plant Costing

Additive Costs

Further uses of additive costing:
Adding known costs to the material cost estimate with quantity structure that are not contained in the quantity structure. In the above example, they are transport or insurance costs.Ÿ When valuating material components, you can include manual costs for each material price, or use manual costs only (as controlled by the valuation variant). Transfer of cost estimates from non-SAP systems.An additive cost estimate is inserted into a cost estimate with quantity structure. You use the unit costing functions to create the additive cost estimate.

The costing variant controls whether the additive cost estimate is included in an automatic cost estimate. The costing type, valuation variant and version of the automatic cost estimate must correspond with those of the manual cost estimate. The quantity structure date of the automatic cost estimate must be within the validity range of the manual cost estimate.To handle additive costs (such as applying overhead), cost elements are required. One cost element is assigned for each cost component (in the settings for the cost component structure). You can also distinguish between cost elements by using origin groups.

Updating Additive Costs

The costs calculated in an additive cost estimate are added to the costs calculated in an automatic cost estimate the next time costing is performed.The costing variant controls whether an additive cost estimate is included in an automatic cost estimate.The costing type, valuation variant, and version of the automatic cost estimate must match those of the additive cost estimate. The quantity structure date of the automatic cost estimate must be within the validity range of the additive cost estimate.When valuating material components, you can include manual costs for each material price, or use manual costs only (as controlled by the valuation variant).Cost elements are required to handle manual costs (such as to apply overhead). One cost element is assigned to each cost component. You can also distinguish between cost elements by using origin groups.

SAP Controlling Costing Run

Material Cost Estimate with Qty Structure

Material Cost Est. Without Qty Structure

Costing Run

Cross-Plant Costing

Additive Costs

Updating Additive Costs

Material Costing with Quantity Strecture Continuied

Enhanced Efficiency

You can save the layout settings for individual users. To do this, choose Save settings. The detail reports are called with the initial variant. Error log: There are two options for analyzing the error messages of a cost estimate:Overall log: Contains the complete list of messages for all the materials costed. The error log contains display variants that enable you to carry out summarized analysis of the error(s). Ÿ If you double click on the material in the header of a cost estimate or in the status display, the messages are displayed.

You can analyze the costing results with standard reports and display variants.You can use different cost component views for the costing results (such as the cost of goods manufactured or the cost of goods sold). Recommendation:Ÿ Define your own display variants and initial variant.Ÿ Use the navigational options to access reports. Navigate via the multilevel BOM to the reports and error logs.

Customizing

Cost components divide the costing results into groups of material costs, machine costs, personnel costs, production costs, overhead, external activities, and so on.Cost elements are assigned to cost components in the cost component structure. For each cost component, you determine the following:

ŸWhether the costs are rolled up (in other words, whether they appear in higher-level assemblies).
ŸWhether costs are included in the standard price or inventory price of the material.
ŸThe views of the cost estimate or information system in which the costs appear.
ŸThe cost component group to which the cost component is assigned.
ŸWhether it is relevant to inventory, cost of goods manufactured, and so on.
ŸWhether it should contain a total amount or whether there should be a fixed/variable split.

A cost component structure is assigned to each costing variant.You can also assign different cost component structures for each company code and plant.For standard cost estimates (costing type 01), one cost component structure only is allowed per company code. Similarly, one complete cost component structure must be used for cross-company code cost estimates.

Primary Cost Split

The requirements for creating primary cost component splits are as follows:

ŸYou have assigned a cost component structure in the CO version in cost center and process cost
planning.ŸYou have determined the prices through planned price iteration. You have defined a cost component structure for the primary cost component split of Product Cost Planning.

Ÿ You have defined a transfer structure for the transfer of the cost components in the cost centers and Activity-Based Costing to the cost components of the primary cost component split in Product Cost Planning.

Example: There are three cost components in Cost Center Accounting for wage groups X, Y and Z.In Product Cost Planning, only the cost component for the wages is required. The transfer structure enables you to transfer cost components X, Y and Z into wages.When you create a material cost estimate, you can decide whether the system should create only a cost component split for the cost of goods manufactured, only a primary cost component split, or whether both splits should be created simultaneously. You make this choice when you assign the costing variants and enter the cost component structures for the main and auxiliary cost component splits.

Explanation fecility

The explanation facilities enable the cost planner to do the following:
ŸQuickly access data and information in the costing environment.
ŸRemain in the cost estimate or the analysis thereof while accessing the above data.

You can access the explanation facilities in various ways. The facilities available depend on the
object to be costed.You can access the facilities by choosing the Info icon in the cost estimate header.You can branch from the itemization, costed multilevel BOM and unit cost estimate list screen to the master data of the selected object(s).You also have the option of double -clicking to, for example, the costing variant in Customizing (in material costing).

Cost parts

Material costing with quantity structure can allocate cost parts that are not contained in the BOM or routing.
n The two main areas are as follows:
Identifying overhead blocks and their costs.
ŸIdentifying causal, origin-based relationships with products that use these overhead blocks.

Business process

The business process is one of the master data objects used in Activity-Based Costing.It is a measurement for output. Like cost centers, business process can be planned on cost accounting lines.The system can calculate a price for the output quantity of a business process. To determine the price, the system uses an allocation cost element that is stored in the business process master.

Templet

Templates are centrally-maintained tabular frameworks which are highly flexible and, through their use of formulas, dynamic.
What is to be allocated? The Object column can contain business processes, cost centers/activity types, templates, or object formulas.
Template in template: This function can be used to gain an overall view and to reuse the rules. How many should be allocated? The Quantity column is again divided into plan and actual quantities. The reason for this is that the planned and actual quantities to be allocated have different sources. (For example, the planned quantity could be the lot size, while the actual quantity could be the true quantity.)Under what conditions is the allocation to take place? The Activation column is divided into plan and actual.
Ÿ

Assignment

You make the settings to assign the costing sheet/overhead key to the template in Customizing. The overhead key is always assigned through the master data:

Material master -> Overhead group -> Overhead key
ŸBase planning object, master record -> overhead key

You can use the overhead key to specify whether the system finds one or various templates. Explanation facilities: When you execute a material cost estimate, you can display the system's interpretation of the template "rules" for the material, together with the values with which the formulas were called or returned.
When you are in the display mode, you can only go to one of the templates found.

Standard Price and Std Cost Estimate

Price control plays a crucial role in material valuation. When the price control indicator is set to S, the inventory is valuated at standard price. In addition, goods movements are valuated directly in the R/3 System using a price selected in accordance with the price control indicator.If the standard price was updated by a standard cost estimate, it can be used in Cost Object Controlling.

The system can use the itemization of standard cost estimates to determine the target costs for manufacturing orders. The difference between target cost and actual cost can be analyzed at the level of variance categories, such as quantity or price variances. The saved itemization provides the basis for the variance calculation.

In Profitability Analysis , you can use standard cost estimates (or other material cost estimates) to compare the revenues of the billed quantity with the cost component split of the product.A standard price is also required in the Material Ledger to determine the actual price.

Updating price in material master

You can analyze the different cost estimates and write the results to price fields in the material master depending on the purpose of costing.You can update the following:
Ÿ The result of the standard cost estimate as the standard price.
Ÿ The results of the modified standard cost estimate or the current cost estimate as planned prices 1, 2 and 3.
Ÿ The results of the inventory cost estimate as commercial prices 1, 2 and 3 or tax-based prices 1, 2 and 3.

In the valuation strategy, you can refer to different prices in the material master so that you can use these prices in other cost estimates.The standard price is updated in the material master in two steps: Ÿ Marking a standard cost estimate Ÿ Releasing a standard cost estimate.

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