Internal Order in S4 Hana

In S4 Hana the first step is to activate ‘Order Management’ in Controlling Area. In ECC and S4 Hana there
are no changes when creating Internal Orders. Internal orders are created based on the order type.

We use T-code KO01 to create the internal order:

Fill in the required field, and in control data if you want this order to be a statistical order, click on
statistical order checkbox if you do not want this order to be real, which means that this order will not
allocate the cost whch is posted to this internal order to different cost objects.
Next step is to release the order. Only once you release the order you can plan, set up a budget or make
any postings to this internal order.

In S4 Hana goto control tab and release the order and save.

Usually there are few steps in Internal order process:

1. Create the Internal Order

2. You enter theplanned values

3. You can enter the budget values

4. Make the postings to internal orders

5. Finally at the month end or period end you will settle the internal order cost to a cost object. It
maybe Cost Center, WBS elemnt, Asset, Profitability Segment etc.

Now let us plan the Internal order, in planning you have overall plans:

Overall Values T-code (KO12): this is where you specify the overall value for this internal order.
Normally instead of providing the overall value to the internal order we provide the values
according to the cost element. This can be done through T-code KPF6.
Next is to enter budget value to internal order. First, we need to maintain budget profile in the order
type. Before that let us look into the customizing of budgeting profile:

In the budget profile we first maintain the text, then we have Time frame under which we have past,
which means we are in year 2019 and when we want to do the budgetting how many years can we plan
so we are in 2019 but we can plan 1 year in the past which means budgetting can start in 2018 and then
2019 and 3 future years. Therefore we can plan for 5 years at a time including 2019.

We can do budgeting through T-code KO22:

Next in the budgeting profile let us look in total values and annual values:

When maitning the budget we have overal value and annual value as per below screenshot:

If we have Totals value ticked it will ask only overall budget and not annual budget, whereas if Annual
value is ticked then it will not ask for overall value to be maintained, instead it will ask for annual values
to be maintained.

Now the main heading in budget profile is the Availability Control:

Now the whole purpose of budgeting is system should stop the end users to post anything in the
particular internal order if the budget is already exceeded. This is called as availablity control.

Now in the budget profile to activate availability control there is a ‘Activation type’ indicator where you
need to specify whether the availability control can be activated at order level or if it cannot be
activated:
Again when the availabiluty control is activated there are 2 types:

1. Automatic activation: whenever any internal order is created and then the budget is entered for
that particular internal order automatically avaiablitiy control will be activated for that order

2. Background activation: which mean aviaablity control will not be activated automatically and if
required we can activate it seperatly.

Next step after budget profile is setup we need to maitnain number range for Cost Planning and
Budgeting:

When we do budgeting it creates a Controlliing Document

Next step which is ‘Define Tolerance Limits for Availability Control’ this step is the most important step
for budget availbility check:
Suppose you have a budget of Internal order of 50000, now you have posted a document with 10000
another document posted with 20000 and document posted with 10000. Now this mean out of 50000
40000 is already consumed i.e. 80% is consumed. Now if you want the system to issue the warning
message that you already used 80% of your budget then you can specify this tolearnace limit in
Availibility control along with the ation to be performed: