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AC410Cost accounting by cost center

AC410

Release 46C 12/17/2001

 AC410
Cost accounting by cost center

-SAP AG

- System R/3
- Version4.6C
- December2000

- MaterialNo.5004 3075
 Copyright

Copyright 2001 SAP AG.All rights reserved.

Copying and reproducing this material by any means and for any
purpose,how completely, and partially,as well as translation into
another language without prior permissionSAP AGprohibited.
Information,contained in this material,Maybe be changed or
supplemented without prior notice.

All rights reserved.

-SAP AG 2001

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Controlling

Level2 Level3
AC412 2 days
Cost center accounting:

Extended
functionality
AC410 3 days AC415 2 days
Orders for indirect
Cost center accounting
expenses
AC420 2 days
Cost accounting
AC040 5 days processes
Control AC510 3 days
costs and Accounting by media
Controlling costs for products
AC505 4 days AC515 3 days
Cost planning Accounting by Cost Objects
per product for customer orders
AC605 5 days AC530 3 days
Fact.
Accounting for results costing/register
materials
AC610 2 days AC650 2 days

Profit center accounting Transfer prices

AC615 4.6B2 days AC620 4.6B 2 days AC625 4.6B 1 day

Executive Information Executive Information Executive Information
System (EIS) 1 - System (EIS) - System (EIS) 3 -
reporting setting business planning
-SAP AG 2001
 Course Prerequisites

- SAP20 - SAP R/3Review(recommended)

- AC040 -Accounting by type of expense/revenue(recommended)
- Basic knowledge and experience with cost accounting systems

- Practical experience in the environmentWindows

-SAP AG 2001

- Users Note
The material in this course is not intended for self-study programs. The full scope of
course material can only be obtained in combination with explanations from referents.
Space is provided in the course materials distributed to record such additional
information.
 Participants

- Project team members,responsible for implementation

Controlling indirect costs.
- Accounting and reporting department staff,responsible for
planning,recalculation and analysis of organizational costs.

- Duration: 3day

-SAP AG 2001

Users Note
- The material in this course is not intended for self-study programs. Full the volume of
course material can only be obtained in combination with the explanations of the
referents. Space is provided in the course materials distributed to record such additional
information.
- There may not be enough time within the course to complete all the exercises. These the
exercises contain additional examples discussed throughout the course. However, if
desired, participants can use these examples to improve their skills after completing the
course.
 Course Overview

Content:

- Course Objectives

- Course Objectives

- Course content
- Course overview chart
- Main business-scenario

-SAP AG 2001

© SAP AG AC410 1-1

 Course Objectives

This course will prepare you to:

- Configuring and using Accounting cost centers

- Planning,wiring,analysis, distribution or
allocation of costs

-SAP AG 2001

© SAP AG AC410 1-2

 Course Objectives(1)

After listening to this course,you will learn:

- Define organizational units, forming the

basis of controlling indirect costs.

- Describe and maintain basic Accounting data by

cost center,and also use other functions, related to
all master data.

- Analyze information on cost centers with

using reports.
- Determine the origin of transactions in Accounting
by cost center,and process business transactions.

- Explain the available periodic options processing,

as well as configuration options,on which they
are based.
-SAP AG 2001

© SAP AG AC410 1-3

 Course Objectives(2)

After listening to this course,you will learn:

- Describe the configuration,processes and

planning tools.
- Create your own reports and trees reports,and
also describe individual functions within the
reporting system.

-SAP AG 2001

© SAP AG AC410 1-4

 Course content

Introduction

Chapter1 Course Overview Chapter5 Closing the period

Chapter2 Organizational Chapter6 Planning
units
Chapter7 Information
Chapter3 Basic data system
Chapter4 Transaction transactions Chapter8 Summary

Application

-SAP AG 2001

© SAP AG AC410 1-5

 Course overview chart

Adjustable
events Planiro-
Basic postings
data Closing tion
period

Organizational-
nal units Info-
system

-SAP AG 2001

© SAP AG AC410 1-6

 Main business-scenario

- You are part of the concern's cost accounting department

IDES. Your company is implementing a systemSAP R/3,in
including the module Accounting by Cost Centers.
- Recalculations between cost centers should be extremely
simple and must take into account the timing of relevant
costs and revenues.Thus, a decision is made,that
recalculation of costs and work between cost centers is
carried out only to debit cost objects in accordance with
their
origin with the greatest possible accuracy.Tariffs for
relevant work are created manually.These rates are
determined manually depending on the market
situation and cannot be calculated using costing.

- Your task as a member of the implementation project

teamCO is that,to set all parameters settings,required for
presentation in the system company processes.
-SAP AG 2001

© SAP AG AC410 1-7

 Organizational units

Content:

- Components,belonging to the Controlling module

- Organizational units

-SAP AG 2001

© SAP AG AC410 2-1

 Organizational units:chapter objectives

After listening to this chapter of the course,you will learn:

- Describe organizational units,on which

Controlling is based on
- Explain options,available for configurations of
organizational units in Overhead Cost
Controlling

-SAP AG 2001

© SAP AG AC410 2-2

 Course Overview

Adjustable
events
Basic Planiro-
postings
data Closing tion
period

Organizational-
nal units Info-
system

-SAP AG 2001

© SAP AG AC410 2-3

 Organizational units:scenario

- You invite a project teamFIon meeting,dedicated

to organizational accounting and reporting
structure of the concernIDES.
- Despite,what should you pay attention to Focus
on Overhead Cost Controlling,to understand the
relationships between various application
components, it is necessary to discuss the
structure of accounting and reporting as a whole.

- It is also necessary to discuss available

Configuration options for Overhead Cost
Controlling,as well as specific Settings options,
recommended for setting the optimal structure of
the enterprise.

-SAP AG 2001

© SAP AG AC410 2-4

 FIAndCO:standard requirements or flexibility

EC-
PCA

CO Controlling Int..accounting and reporting

Cost accounting
Razl.estimates

Profit center accounting

Flexibility

I
GA AS
FI External.accounting and reporting
Tax.
GO AP Closing the period
F s
FAndAndnnAAnnWithWiths B
examination
Legislative requirements.
Standards

-SAP AG 2001

- Application component of the systemR/3 Controlling (CO) provides all accounting functions and
reporting necessary for effective controlling. If an enterprise divides its accounting and
reporting operations into internal and external accounting and reporting, then Controlling
represents internal accounting and reporting in the system, since this module provides the
required information to those responsible for managing and controlling the operations of the
enterprise. ModuleCO includes Cost/Revenue Element Accounting as well as, along with the
Enterprise Activity Controlling (EC) module, application components Profit Center Accounting
(EC-RSA) and Management Information System (EC-EIS). This module provides all the necessary
controlling capabilities, not just those that allow you to comply with legal requirements.

- In the Finance module (FI) financial statements such as balance sheet and income
statement are created and losses. This is an external reporting system that must follow
certain standards and comply with legal requirements.

© SAP AG AC410 2-5

 Organizational units

Subject:

- Components,belonging to the Controlling module

-SAP AG 2001

© SAP AG AC410 2-6

 ComponentsCOand value streams

CO Accounting object EC-

results PCA
PA
UcheeTt reehhatulTTAATcomrade

CO

Profit center accounting

OM ConTtrollinGGTocoWithSt...hhAATtrAATT
Orders
CO ConTtrollinGG hhAATtrA
client PC ATtnAand cont.atatToToTT
Domestic Projects
Cost center
orders

Production Grade
Types of jobs
stock.stock materials
Processes

CO
CEL UcheeTt by appearanceAamhhAATtrAATT

Main.
Revenue
FI Finance
means Expenses
Finance

Control Control
HR MM financially.. PP Production-- SD Sales
staff quality
streams
-SAP AG 2001

- Controlling provides the information necessary to make management decisions.

decisions. It simplifies the coordination, optimization and monitoring of all processes in
the enterprise. This includes recording both the consumption of inputs and the services
provided by the enterprise.

- All information related to costs is automatically transferred to Controlling from Finance. As part of
this process, the system assigns costs and revenues to various controlling account assignment
objects, such as cost centers, business processes, projects or orders. The corresponding Financial
Accounting accounts are processed in Controlling as cost elements or revenue elements.

- Accounting by cost centers is used in the enterprise to solve problems controlling. This
component is a tool for monitoring indirect costs and assigning them to the cost
centers where they arose according to origin.

- Product Cost Controlling calculates the costs arising from producing a specific product
or providing a specific service. This allows you to determine the minimum price at which
a product can be sold on the market, making a profit.

- Profitability Accounting analyzes the profits and losses of an enterprise in accordance with
individual market segments. For each market segment, the system assigns the corresponding
costs to revenue. Accounting for results provides the basis for decision making, pricing, customer
selection, terms and distribution channels.

© SAP AG AC410 2-7

 Controlling indirect costs

EC-
CO
PCA
PA
UcheeTt reehhatulTTAATcomrade

Profit center accounting

CO
OM Controlling indirect costs CO
PC
Int.. Processes
orders ConTtrollinGG hhAATtrAA
TtnAand cont.atatToToTT

Transaction-based postings
- intraproduct.cost recalculations
- work recalculations
- cost planning
- comparison plan/fact
CO - comparison fact/fact
CEL UcheeTt by appearanceAamhhAATtrAATT

-SAP AG 2001

- Indirect costs include costs that cannot be directly assigned. producing a specific
product or providing a specific service. All indirect costs are assigned to the cost
center where they arose or to the transactions from which they arose.

- Cost centers are individual units (within a controlling area) in which expenses. Cost
centers can be created based on various criteria, including functional considerations,
ease of allocation, work performed, or depending on the physical location and/or area
of management.
- The activities that can be performed by a specific cost center are determined by the activity
types. Completed work provided by one cost center (the sending cost center) to other cost
centers, orders or processes is considered as a consumption of the resources of that sending
cost center. The work is assessed using a tariff calculated on the basis of certain
organizational, economic or management information.
- Business processes combine work flows within an enterprise, covering several cost
centers. They can be used to control enterprise processes according to specific
functions.
- Internal orders are used to plan, collect and analyze costs incurred in the result of our
own work.
- There are a number of methods for recalculating costs and quantities depending on the
type the controlling object in question. In the case of an enterprise scenario using only
cost allocation, plan/actual comparisons can be used to analyze costs. When performing
period-end closing quantity recalculation, additional analysis tools can be used that take
occupancy levels into account.

© SAP AG AC410 2-8

 Organizational units

Subject:

- Organizational units

-SAP AG 2001

© SAP AG AC410 2-9

 Organizational units

CO EC-
Accounting object
PCA
PA results
UcheeTt reehhatulTTAATcomrade Unity results accounting center

Profit center accounting

COConTtrollinGGTocoWithSt.eennaXXhhAATtrAATT CO ConTtrollinGG hhAATtrAAT
OM PC tnAand cont.atatToToTT

Controlling
unit

CO
CEL UcheeTt by appearanceAamhhAATtrAATT

FI FFAndAndnnAAnnWithWithss Company code

Control Control
HR
staff financially.. PZoiRVA
soundOODSST&VDO
MM streams PP SD
-SAP AG 2001

- The operating unit is the highest level of profitability reporting, Sales and Marketing
Controlling, as well as the central organizational unit in Profitability Analysis (CO-PA),
used to structure the market and break it down into segments.

- Controlling units structure internal accounting and reporting operations organization

from a Controlling point of view. They are closed organizational units used to calculate
costs. All internal production allocations apply exclusively to objects belonging to one
controlling area.

- Company codes are independent accounting units in Finance. They are the smallest
organizational units for which an account group can be defined for external reporting
tasks. External reporting involves entering all relevant business transactions and creating
all necessary documentation for financial statements such as the balance sheet and
income statement.
- Business-A sphere is an organizational unit in Finance that represents in the system a certain
level of operations and management within an enterprise. Financial transactions can be
assigned to a specific business area. In the Finance module (FI) based on business areas,
internal balance sheets and profit and loss statements can be created.
- A plant is an organizational unit used in Logistics. This unit is used to break down an
enterprise based on factors such as production, procurement, equipment maintenance
and repair, and materials planning. Plants are used in Materials Management, Logistics,
Production Planning and Management. A factory produces materials or goods and
provides services.

© SAP AG AC410 2-10

 Setting up KE

Tablitz View Processing Go to Select Utilities System Help

Change basic data:detailed angles

Basic data
KE 1000
Description CO EEurope
Activir.componentResponsible
Assigned.postings
Control
assignment
BE KE Accounting-costs for several company codes

Currency settings

Type of currency thirty

Group currency BE currency
UNI Universal
Currency Assets.
currency
Currency Profile and Valuations

Other settings
Intl. chart of accounts
Chart of accounts INT
Kalend. year,4 special periods
FG option K4
Standard. cost center hierarchy H1 * * Standard. hierarchy KE1000

Control
register
Counter. register activated
Type of document S.A. Basic document accounts

-SAP AG 2001

- A controlling area is a closed organizational unit that serves for cost accounting.
Allocations between controlling areas are not possible.

- Standard systemSAP has created controlling area 0001, which you can use as a
template.

- You make settings for the controlling area to display organization structure from
a controlling point of view.

- A controlling area can contain one or more company codes, which if necessary, operate in
different currencies. All assigned company codes must 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 financial year.

© SAP AG AC410 2-11

 Assignment of organizational units

EUR
0.1

1,n
KE
1

1,n
BE
1

0,1,n
Factory

BS
Regardless
organizational units
-SAP AG 2001

- Since the systemR/3 is a fully integrated system, assignment organizational units must be
common across applications. Therefore, you must simultaneously define internal and
external organizational units and assign them to each other.

- After the controlling area (CU) and operating concern have been created (EUR), their
assignment is specified. You can assign several controlling areas to one operating
concern, which allows you to analyze these controlling areas together within one
operating concern.
- Company codes (company codes) and controlling areas can be linked to each other in
various ways depending on the structure of the enterprise.
If the Financial Accounting and Controlling perspectives are identical, each controlling area
can be assigned exactly one company code.
If you assign several company codes to a specific controlling area, this makes it possible
to perform controlling for several company codes.
- Based on the valuation level of the company code (and therefore the controlling
unit) is assigned to a plant. A company code can be assigned to one plant, several
plants, or no plants.
- Making changes to assignments is not a problem as long as no assignments have been
created. master or variable data.

© SAP AG AC410 2-12

 Assignmenteleven

KE1000
- Currency UNI
- Chart of accounts INT
- Fin option.of the year (12 K2
posting periods)

BE1000
- Currency UNI
- Chart of accounts INT
- Fin option.of the year (12 K2
posting periods)

-SAP AG 2001

- This structure contains identical views for Finance and Controlling. Each A
controlling area corresponds to a specific company code.
- In Controlling, they can be used to perform analysis in the information system. three
currencies:
- Controlling area currency
In case of assignment1 : 1 as controlling area currency can Only the company
code currency is used. The controlling area is managed using the controlling
area currency.
- Object currency
The object currency is determined for each account assignment object in Controlling. In case of
assignment1 : 1 for the account assignment object, the object currency can be specified a currency
that differs from the currency of KE or BU.

- Transaction currency
This currency is used to post the controlling document.
- Controlling and the assigned company code must use the same chart of accounts.

- Fiscal year variants of company code and controlling area can include different number of
special periods, but the number of posting periods must be the same. The period
boundaries for the fiscal year options must also match. In Financial Accounting, special
periods are used to make year-end adjusting entries or for revaluation. If inFI has four
special periods, and CO has only one, then entries for the second, third and fourth special
periods inFI are held on the first special period inCO. If no special periods are defined in
CO, then postings for the special period in FI are carried out for the last posting period in
CO.

© SAP AG AC410 2-13

 Assignment1:n

KE1000
- Currency UNI
- Chart of accounts(operational) INT
- Fin option.of the year (12 K2
posting periods)

BE1000 BE2000
- Currency Doll.
- Currency UNI - Chart of accounts:
- Chart of accounts: • Operational INT
• Operational INT • LocalCAUS
- Fin option.of the year (12
K2 - Fin option.of the yearK2
posting periods) (12posting periods)

-SAP AG 2001

- If several company codes are assigned to one controlling area, this makes it possible to
perform cost accounting for multiple company codes. In this case, CO can carry out
allocations that relate to several company codes. In this case, it may be necessary to post
approvalsFI-CO, which can be performed using a control register.

- Three currencies are available to perform assessments:

- Controlling area currency
When you account for costs across multiple company codes, the currencies of the
controlling area and company codes may differ from each other. You can specify exactly
the same currency for a controlling area as for a company code, but one additional
currency can be used in Controlling.
- Company code currency
In cost accounting for multiple company codes, any object currency can only be
selected if all (!) assigned company codes have the same currency, which must match the
currency of the controlling area. Otherwise, the system automatically assigns the
company code currency to the account assignment object as the object currency.

- Transaction currency
Posting documents toCO is carried out in the transaction currency.
- The operational chart of accounts is used in Finance and Accounting by cost/revenue types.
In addition to the operational chart of accounts, country-specific charts of accounts (other
account numbers) can be used, structured in accordance with the requirements of the
legislation of the relevant country.
- Fiscal year variants in controlling areas and company codes can have different number of
special periods. In this case, the number of posting periods must be the same.

© SAP AG AC410 2-14

 Assignmentelevenor1 : n?

In what cases is it recommended/assignment required1 : n?

- Reporting required for several company codes

- Postings are required for several company codes,For example,

recalculations works or layouts
- When necessary for logistical reasons (production at another
plant)
- Calculations must be spread over several company codes
- Profit centers cover several individual company codes

-SAP AG 2001

- In what cases should you create one controlling area for several company codes?

If the implementation of processes spanning multiple company codes is dictated by the

logistics structure of the enterprise (production in another plant); if group costing is
required; if multi-level management of production costs is required; if you use postings
across several company codes, for example, to allocate activities, initiate your own
activities or assessments. Profit center accounting and transfer prices are not possible
beyond the controlling area level.
- What limitations should be considered if only one is used? controlling area?

In addition to the restrictions mentioned above regarding the chart of accounts, currency
and fiscal year variant, it should also be mentioned that closing a period inCO can be
executed only after the final closure has occurred inFI. From an organizational point In
view of this, only one controlling manager must correspond to the linked company
codes. The volume of data for one controlling area can be very large, which can result in
poor performance. If one controlling area is used, only one operating concern is possible,
this implies that the characteristics and value fields must be sufficient for all company
codes. Automatic reconciliation postings in the case of allocations for several company
codes are only possible after deduction of taxes. Therefore, for this function to be
possible, book companies must belong to a taxation unit.

- Making changes to assignments is not a problem as long as no assignments have been

created. master or variable data. In a production system, combining previously
separate company codes into one controlling area or splitting a controlling area (1 : n)
for several new controlling areas leads to the need for data conversion.

© SAP AG AC410 2-15

 Organizational structures in Controlling:IDES

IDES
Performance UnitIDEA
(UNI)

KE

1000 2200 2000 6000 5000

Europe France Sev.Amer./ Mexico IDESAsia
(UNI) (FRF) Australia (USD) (JPY)
(USD)

BE1000 BE2100 BE2200 BE3000 BE4000 BE6000 BE5000

IDES AG IDES Porto IDES France IDES USA Inc. IDES Canada IDES Mexico Japan
(UNI) galia (FRF) (USD) (CAD) (internal shaft.MXN) (JPY)
(PTE) (solid shaft.USD)

BE2000 BE2300 BE4100

IDES Great IDES Spain SAP Australia
Britannia (ESP) Leah
(GBP) (AUD)

-SAP AG 2001

- In systemSAP for the concernIDESa performance unit has been createdIDEA. The SAP R/3
system collects results from all over the world, which can then be analyzed in component
Accounting for results in accordance with various criteria.
- Requirements for internal accounting and reporting of the concernIDES are respected
through using multiple controlling units. Moreover, there are both scenarios in which
several company codes are assigned to a controlling area, and scenarios in which each
controlling area is assigned one company code.
- Internal accounting and reporting for most European companies is carried out in
controlling area1000, which allows you to perform for the relevant companies
controlling over several company codes assigned to this controlling area. This is possible
because all assigned companies use the same chart of accounts and have the same
number of posting periods.
- For the French branch, it was decided as an operational chart of accounts use a chart
of accounts that reflects the specifics of a given country. For this reason, the French
branch requires its own controlling area.

© SAP AG AC410 2-16

 Organizational units:chapter summary

Now you know how:

- Describe organizational units,on which

Controlling is based on
- Explain options,available for configurations of
organizational units in Overhead Cost
Controlling

-SAP AG 2001

© SAP AG AC410 2-17

Exercise data for the courseAC410
Explanation of the symbols in the exercise ideas and decisions
Exercises

Solutions

Learning Objectives

Business-scenario

Tips and tricks

Attention!

Exercise data
Data type Data in the educational system
Controlling area 1000
Company code 1000
Standard hierarchy H1
Business area 8000 (external works/services)
IS## (own consulting works/
services ##)*
Profit Center 1400 (own works/services) 1402
(administration)
1600 (works/services from outside)

Cost center type 8 consulting *

Types of costs 476400 (training costs) *
430000 (salaries)
473120 (telephone costs)
475000 (transport costs)
476000 (office supplies)
476100 (auxiliary IT
materials)
Statistical indicators 9100 (employees)
© SAP AG AC410 2-18
Internal orders Comp. A cons. (Company A
consulting)
Comp. B cons. (CompanyB
consulting)
Types of conditions Resource prices must be
specified*
*Must be created

© SAP AG AC410 2-19

Organizational units:Exercises

Chapter:Organizational units
Subject:Organizational units

After listening to this chapter of the course, you will learn:

• View the company codes assigned controlling

area1000.
• Check which control indicators are activated in this
controlling area.
• Explain the meaning of the various settings in
controlling unit.

At the concern's branchIDES in Germany has created a new

department. This The department provides the company with
consulting services on the installation and use of software.

1-1 This consulting department is assigned to a controlling area1000 - CO

Europe, it already uses the settings required check.

1-1-1 What assignment control (KE: BE1 : 1 or 1 : n) set to master data?

___________________________________________________________

1-1-2 To call up more detailed information about a fiscal year variant, use
the function keyF1. Should the number match? special periods in
company codes and in the controlling area?

___________________________________________________________

1-1-3 Check whether they are activated in the controlling area1000

Accounting by cost centers, profit center accounting and liability
management.

© SAP AG AC410 2-20

 1-1-4 How many company codes are assigned to the controlling area
1000?

___________________________________________________________

1-2 Another company needs to install a moduleR/3 system CO. On Currently,

this company has only one company code, which means that it will be
reflected in the system using assignment 1:1. However, it can be expected
that this enterprise will quickly expand, including beyond the borders of
one country. Therefore, new company codes need to be integrated into
the controlling area. What settings for assignment control and currencies
(currency types) must be made so that new company codes can later be
added to the controlling area?

__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________

The following examples will require you to use a custom setting

in multiple applications. To make this work easier, it is
recommended to open several windows (sessions) using System
→ Open mode. Go from You can change from one session to
another at any time.

To optimize your system experience, you can add

frequently used menu paths to the user's "favorites" list.

© SAP AG AC410 2-21

Organizational units:Solutions

Chapter:Organizational units
Subject:Organizational units

The solutions use the following abbreviations for menu paths:

Custom Setting Path:

IMG:Tools→Accelerated SAP→ Custom setting
→Project processing →View referenceIMG SAP.

Path to Cost Center Accounting:

CCA:SAP-menu→ Accounting and reporting → Controlling → Cost accounting
by cost center.

1-1 IMG:Controlling→General controlling → Organization → Maintenance

ControllingUnits.

1-1-1 Select controlling area1000 and view detailed screen. In this

controlling area, cost accounting is activated for all company
codes.

1-1-2 Special periods may vary. In this case, the number of posting
periods must be the same. The period boundaries for the fiscal
year options must also match.

1-1-3 In the controlling area1000 go to the Activate screen Components/

ManagingIndicators. Accounting by cost centers, Accounting by
profit centers and liability management are activated.

1-1-4 Go to controlling area1000 per view Assignment BE. Controlling

area1000 assigned four balance sheets units:1000, 2000, 2100 and
2300 (in exercises there may be more company codes).

© SAP AG AC410 2-22

 1-2 Assignment control in the controlling area must be
is set to Cost Accounting for Multiple Company Codes, even though only
one company code is initially assigned. The currency type specifies how
the currency for the controlling area is determined. To ensure that
company codes that will be assigned to a given controlling area at a later
date can use different (local) currencies, select a currency type30 (group
currency). This type must be set in company codes as the first local or
parallel currency. This ensures that the data transfer FI/CO and
subsequent extensions can be carried out without any problems.

To make it possible to update all currencies in the controlling area,

you must activate the control indicator All currencies.

© SAP AG AC410 2-23

 Basic data

Content:

- Cost center

- Types of costs
- Types of jobs
- Statistical indicators
- Functions,common to all master data

-SAP AG 2001

© SAP AG AC410 3-1

 Basic data:chapter objectives

After listening to this chapter of the course,you will learn:

- Describe,how to optimally structure standard hierarchy

- Create a cost center

- Distinguish between main accounts and cost types

- Create cost elements in Controlling and explain possible

alternative methods for creating them
- Create work types and carry out planning corresponding
tariffs manually for different cost centers
- Create statistical indicators
- Update master data using group processing

- Explain the time dependence of basic data

- Create master data groups and explain mechanism for
their creation
-SAP AG 2001

© SAP AG AC410 3-2

 Course Overview

Adjustable
Basic events Planiro-
data postings tion
Closing
period

Info-
system

al
ion
an izat
Org s
t
uni

-SAP AG 2001

© SAP AG AC410 3-3

 Basic data:enterprise scenario

- The manager of the controlling department determines the cost center

structure enterprises,as well as relevant areas of management.Yours the
task is,to reflect this structure in the system in form of a standard hierarchy.
To represent the entire enterprise Each cost center must be assigned to this
structure.
- Finance module reports,that company codes have already been created.
Now you can start creating the corresponding cost elements in Controlling.

- Consultants,working at the enterprise,must have ability to calculate services,

provided by them to clients, directly to the cost object(internal order).
Services junior and senior consultants are required to be recalculated
according to- separately.

- As a reference base for cost transfers and allocations to at the end of the
period it is required to use statistical indicators.
- Although the underlying data remains relatively constant across for a
considerable time,as it grows and changes the enterprise will require
some management.Thus, need to own a set of tools,existing for this goal.

-SAP AG 2001

© SAP AG AC410 3-4

 Master data and variable data

Types of costs
Basic
Cost center
data A
Types of jobs
Statistical N
A
indicators
L
AND
Z
Variables Separate
data positions
Summary records

-SAP AG 2001

- In Overhead Cost Controlling, a distinction is made between fixed costs and variable costs.
data.
- Basic data-This is information that remains unchanged over a long period of time. period
of time.
- Variable data is used for short periods and assigned to master data.

- Cost elements describe the origin of costs. Cost types are specified as primary or
secondary. Primary costs arise from the consumption of production factors procured
externally. Secondary types of costs arise as a result of the consumption of its own
production factors (that is, those provided by the enterprise itself).

- Cost centers represent areas of responsibility/control in the system that generate costs and
influencing them.
- Types of work break down the production activities and services provided by the location
occurrence of costs for the enterprise, by type; they are used to allocate costs associated
with in-house activities to cost sources.
- Statistical key figures (values describing cost centers) are used as basis (reference
base) for recalculations (allocations, distributions, etc.), as well as for the analysis of
statistical indicators.

© SAP AG AC410 3-5

 Basic data

Subject:

- Cost center

-SAP AG 2001

© SAP AG AC410 3-6

 Organizational structure as a standard hierarchy

H1
IDESEurope

H1000 H220000 H221100 H223300

BE1000 00 BE2000 00 BE2100 00 BE2300
Germany Great. Portugal Spain

H1010 H1200 H1300 H1400

Own Finance and Sales Technical
work administration Department

H1110 H1120 H1210 H1220 H1210

Governing body Own. Administrator. Staff Procurement
work

-SAP AG 2001

- Before creating a cost center, you need to define a standard hierarchy, the name of which
is entered when creating a controlling area.
- A standard hierarchy is a classification structure that should be All cost centers of the
controlling area are assigned. You can create a cost center structure/classification to suit
your specific requirements. However, it is convenient to structure them by analogy with the
structure of the company (areas of decision-making, controlling and management). These
individual areas, as a rule, correspond to the functional areas presented on the organization
chart of the enterprise.

© SAP AG AC410 3-7

 Cost centers and standard hierarchy

H1:IDESEurope
Cost center processing
H1000:BE1000
H1010:Internal

1110Governing body

1110Governing body

H1120:Own works
1000Own works

1200Cafeteria

H1200:Finance and Administration

H1200:Administration
H1200:Finance and Administration

H1000:BE2000
-SAP AG 2001

- Cost centers are the individual units in which costs arise. Cost centers can be created
on based on functional needs, allocation criteria, work performed, geographic factors
and/or areas of responsibility.
- As part of overhead cost controlling, cost centers of similar types are combined according to
whether they perform supervisory, management or decision-making functions. To represent
the different types of cost centers in a structured way, a standard cost center hierarchy is
created.
- Each level or node of this standard hierarchy represents a cost center group. Beginning with4.6
you can assign cost centers and nodes at the same hierarchy level.
- Cost centers can be created or modified using the appropriate menu functions or
by maintaining a standard hierarchy.
- Cost centers that are created or changed in the standard hierarchy have an inactive status, i.e. They are
not considered CO account assignment objects. The assignments are checked and the cost center is
released as a transaction object at the time of activation, but not before. Activation can be started as part
of batch processing.

- If you want to assign a cost center to another part of the hierarchy, this can be achieved
within maintaining a standard hierarchy section by simply reassigning a cost center. In other
words, there is no need to make any changes to the cost center master data.

- Assignments to organizational units such as company code, business area or Profit

centers can be changed during the financial year only if the following conditions are met:

- The currency of the new company account is the same as the currency of the old company account.

- Planned data is carried out only for this financial year.

- The cost center is not assigned to an asset, work center or master record
personnel.

© SAP AG AC410 3-8

 Standard hierarchy and enterprise
organization

H1

KE
1000 Inc.

H1000
BE
Inc. AAmerica
1000

H1010 Legend
Finance
HROrg.unit

Attributes
Controlling
Cost center group

Cost center
Controlling

-SAP AG 2001

- Enterprise organization displays the organizational structure of the enterprise in

perspective all applications. This makes it possible to use centralized maintenance and
analysis for different organizational units.

- Using the organization of an enterprise, you can reflect the organizational structureHR, standard
hierarchy for cost centers and standard hierarchy for profit centers.

- You don't have to implement for thisHR.In this case, the enterprise organization can be
generated based on a standard hierarchy.

- Advantages of organizing an enterprise

- Clarity
- Time dependent
- The principle of inheritance

© SAP AG AC410 3-9

 Types of cost centers

DDOOPPatatWithWithTTAndAndmmsseehhnnAAhheennAndAndII ANDANDnnddAndAndToToAATTOORRbbllOOToToAndAndRR..

.
e yr
. te es r. o
-in at te t.v ra .tu .vy lig
t.r n.
r
be
Cost center type Description c Ra c a an an Ob
Pl Pl Pl
m
Nu
Fa Fa
1 Production.
2 Will help.
3 Sales
4 Administrator.
9 Estimated
Z ....

Cost center
Types of work may
Values by displayed only
default according to assigned
Indicator types of cost centers

-SAP AG 2001

- A cost center type is an indicator in the cost center master data that is determined by the type of a
given location. occurrence of costs. Examples of cost center types are: administration, production,
sales. You can use your own cost elements or standard types provided by the system.SAP.

- Cost center types allow you to assign the same characteristics to similar cost centers. For
example, Some types of work may only be allowed for certain cost centers. This prevents
erroneous postings of production activities to administrative cost centers. In addition, cost
center types can be used to calculate costs, allowing you to determine what percentage of
overhead costs should be allocated to a given cost center type.
- You can define indicators for each cost center type in Customizing blocking or specify
that quantity control is allowed for cost center data. When you assign a cost center to a
specific cost center type (this operation is performed when creating a cost center), the
corresponding blocking indicators and permissible values for this cost center type are
offered by default.

© SAP AG AC410 3-10

 Exercise objectives:structuring the model
enterprises
B##
Consulting department

B10## B20##
Calculated Support B30##
Cost center consulting Consulting

101## 201## 202## 203##

Telephone Organization IT services Transport

301## 302##
Consulting Consulting
FI/CO L.O.

-SAP AG 2001

© SAP AG AC410 3-11

 Basic data

Subject:

- Types of costs

-SAP AG 2001

© SAP AG AC410 3-12

 Chart of accounts

Example:international chart of accounts

Finance Finance
0 1 2 3 4 7 8 9
Turnover- Neope- Stock Consumption- Ready Change- Profit
ny and ration. math new products nia and loss-
briefly- expenses rial and semi- revenue/ ki for
urgent Revenue accounts factory balance/ current
capital kata current year
own
work

5 6
Perv. Deut. Deut. Kinds
kinds kinds kinds revenue
costs costs costs

Controlling

-SAP AG 2001

- The chart of accounts includes all main accounts belonging to Finance.

- From a controlling point of view, the existing system is cyclical, because accounts expenses
and revenues in Finance correspond to the primary cost types and revenue types of
Controlling, and the postingsFIs are transferred to Cost/Revenue Element Accounting (CO-OM-
CEL) real time.
- In addition, secondary cost elements are created exclusively in Controlling. They are
used to record internal cost flows such as work allocations, allocations and
calculations.

© SAP AG AC410 3-13

 Cost type

CO FI
First.types of costs Basic
accounts
Primary cost element
Calculation type of cost
External calculation orders P&L accounts Balance.accounts

Accounts indirect
Deut..types of costs Expense accounts
postings (eg.
VLOOKUP
bank accounts)
Layout
Allowances
Calculation of internal orders Accounts indirect
postings (eg.
control
Types of revenue accounts)

Type of revenue Revenue accounts

Decrease in revenue

-SAP AG 2001

- Integrated nature of the systemR/3 implies that expense accounts created in Finance, the
primary cost elements in Controlling must correspond. This ensures that costs are
consistentFI with primary costs in CO.Before create primary cost elements in Controlling,
they must be created in Financial Accounting as G/L accounts.

- To post to a primary cost element, you need a cost-bearing object (for example, a cost
center) that determines the source of costs. Examples of primary costs are materials
and wages.
- Secondary cost elements are used exclusively in the CO module to determine internal cost
flows such as allocations or calculations. They are defined only inCOi do not have
corresponding main accounts inFI.
- When analyzing revenue in controlling, the systemR/3 records it as revenue types. Kinds
revenues are classified as primary costs.
- When you create a cost element, you must assign it a cost element type. This is the
definition specifies the transactions for which this cost type can be used. For example,
type01 (general primary cost elements) is used for standard primary postings from
Financial Accounting or Materials Management.

© SAP AG AC410 3-14

 Automatic creation of cost elements

Default Settings

From account On account Account type Description

400000 415000 01 Primary view
. costs
.
. Cost type
510000 42 layouts

-SAP AG 2001

- Cost elements can be created automatically by specifying settings according to defaults

used to determine which cost element or cost element interval to create. You also need
to define types for these cost elements.
- Primary cost elements can only be created if the chart of accounts contains the
corresponding G/L accounts. For cost elements, the systemR/3 uses names from G/L
account master data inFI. However, if necessary, CO these names can be changed.

- Secondary cost elements are created for all specified cost elements, and the names are taken from type of
cost elements.

- After the default settings are entered, creating cost elements happens in the
background.

© SAP AG AC410 3-15

 Business-scenario

Organization

Senior.
Layout:By% FI/CO
Company A
Consulting
Mlad.

Telephone IT services Direct recalculation

works

Periodic transfer:Layout:By% by number of Senior.

telephones from the number of PCs L.O. CompanyB
Consulting
Mlad.
Transport
Direct recalculation
works
Layout:By% from
kilometers traveled
-SAP AG 2001

- The overview slide below shows the organization of the enterprise from the assignment
exercises. At this stage it is too early to reflect the method used to credit cost centers.
However, it may be advisable to provide advance information. To perform an
assessment or direct allocation of activities, secondary cost elements are required. As
shown in the slide, according to the exercise scenario, some cost centers for credits will
use assessment or direct activity allocation.
This demonstrates the purpose (!) of creating secondary cost elements in this
exercise.
- This slide can be pulled out of a shared folder and used periodically as a useful overview
information throughout the course.

© SAP AG AC410 3-16

 Basic data

Subject:

- Types of jobs

-SAP AG 2001

© SAP AG AC410 3-17

 Types of jobs

1Create a work type Senior. 2 Plan.tariff according to

consultant type of work on

Cost center

Meaning.by default.

Process
Project
Cost center:

ConsultingFI/CO Cost center

626200 - 3,000 Order

626200 + 3 000
Outfit for
work

10hours

consulting
-SAP AG 2001

- The activity type classifies the activities performed by one or more cost
centers, owned by the same company.
- If a certain cost center provides work to other cost centers, orders, processes, etc., this
means that its resources are being used. The costs associated with these resources must
be allocated to the recipients of the relevant work. Activity types are used as reference
bases for this cost allocation.
- When internally recalculating work into the systemR/3 the scope of work is entered, for
example, the number of hours spent on repairs. The system calculates the corresponding
costs based on the tariff and generates receiver debits and sender credits for volumes and
costs. Internal activity allocation is performed using secondary cost elements that are
stored as default values in the activity type master data.

- You can restrict the use of an activity type to certain cost center types by specifying permissible
cost center types in the activity type master record. You can specify up to eight permissible cost
center types or leave the assignment "without restrictions" using the asterisk symbol (*).

- The activity type type determines whether the activity type should be entered and
allocated, and if yes, then how. For example, you can enable direct allocation for certain
activities, but specify for other activities that they cannot be allocated directly or can only
be allocated indirectly.

© SAP AG AC410 3-18

 Cost center/Type of work

Work planning/tariffs

Fin.year 2001
Periods With1By12
Cost center 30100ConsultingFI/CO

Type of work Rate Units-pricesL

Senior. 300 00001
consultant

-SAP AG 2001

- To make it possible to perform internal work allocation, it is necessary to indicate which

cost centers and at what tariffs provide certain types of work. In systemR/3this is done by
planning the execution of work/tariffs for Cost center. In this case, cost center/activity
planning functions as an additional master record.

- In the case of intra-production recalculation of work, the volume of recalculated work

entered manually. To recalculate both costs and work, the systemR/3should estimate the
volume of recalculated work using the tariff specified by the sender for this type of work.
In the case of direct activity allocation, the planned rate for the cost center/activity type
combination is used for this calculation.
- The planned tariff can be entered manually or determined automatically by the system in
within the planning framework. If the planned rate is to be set manually, the value of the rate
indicator must be set to3 (manually). This procedure may be used if the determination of
rates is not comprehensive, for example, if the required rates are determined solely within
the organization and do not depend on the in-house work performed, or if the rates depend
on the prices of external suppliers, but not the costs of the cost center. Automatic
determination of planned tariffs is discussed in the course AC412.

© SAP AG AC410 3-19

 Basic data

Subject:

- Statistical indicators

-SAP AG 2001

© SAP AG AC410 3-20

 Statistical indicators

Statistical
pok-l Number of employees Phone calls
Months (constant value) (total value)

01 _
4500
02 _
5000
03 100 5000
. . 6000
. . _
. _
10 100 _
eleven 100 _
12 100 _

83.3 20500
(average) (in total)

-SAP AG 2001

- Statistical indicators such as number of employees or duration telephone calls are

statistical values characterizing cost centers, profit centers or orders for indirect costs.
They can also describe the value for a specific activity provided by a cost center, for
example, the number of employees involved in repairs for a transport cost center (a job-
dependent statistic).
- It is possible to post both planned and actual statistical indicators.
- Statistical indicators can be used as reference bases for periodic operations such as
nesting or distribution, as well as for performance analysis.

- Statistical indicators are defined as a constant or total value:

- A constant value (for example, “number of employees”) is transferred from the period in
which it was introduced for all subsequent periods of the same financial year. Entry of a
posting is only necessary if this value is changed. The fiscal year total is the average of
the periods.
- The total value (for example, "telephone calls") is posted only for the period in which
which it was introduced. For totals, the fiscal year total is the sum of all period values.

- Statistical indicators can be transferred from the Logistics Information System (LIS) by
assigning an indicator from the LIS to a statistical indicator in Cost Center Accounting.

© SAP AG AC410 3-21

 Basic data

Subject:

- Functions,common to all master data

-SAP AG 2001

© SAP AG AC410 3-22

 Creating Time-Dependent Master Data

Cost center:ConsultingFI/CO

Valid.With01January to31December

Period under review:responsible

1January - thirtyJune Conrad

1July - 31December Rice

-SAP AG 2001

- Master data fields for cost centers, cost elements and activity types can be stored in the
system as time-dependent. If one of these fields changes for a specific time period, the
system creates a new record in the database containing a new master record for that
period. This means that for each individual master record, several database records are
maintained simultaneously. In the example above, the “Responsible” field is time
dependent, which makes it possible to specify several different owners for a cost center as
they change over time.
- Individual fields are set as time-dependent in Customizing. Some fields, in particular the
assignment of a cost center to a company code, business area or profit center, are
defined by the systemSAP as time dependent, and the specified time interval is not may
be reduced if actual postings were made to this cost center in the current financial year.
Because storing time-sensitive data can lead to rapid data growth, it is recommended
that you designate only the most important fields as time-sensitive.

- The assignment of a cost center to a section of the standard hierarchy is not a time-dependent field. This
means that when changes are made to the current assignment, the system prepares historical and
current information for the cost center.

- If you want to extend the validity period of a master data record, switch to Maintain
master data and create a master record for the required extended period. To avoid filling
in the same master data fields, you can copy data from an existing master record.

© SAP AG AC410 3-23

 Batch Processing

1 What cost centers?

- Cost center group

- Cost center interval
- Selection option
Cost Center Change: Group Processing
2 Var.list+Var.list-
KE 1000
What fields Action.With 01/01/1950By12/31/9999
main
data? List option:Name

M Cost center Description View BE BS

1110 Governing body U 1000 9900
1200 Dining room U 1000 9900
2300 Procurement U 1000 9900
. . . . .
. . . . .

-SAP AG 2001

- SystemSAP R/3 provides a number of batch processing functions for master data Cost
center.
- You can select the required cost centers by specifying intervals and cost center groups
or selection options, maintain any fields (except for additional user fields), create groups
using selected cost centers, or switch from group processing to individual processing of
master data lists.
- Bulk processing can also be used to change or delete statistical indicators.

- You can view or delete cost elements and activity types using group processing.

- For group processing, you can create your own list options. List option defines the master
data fields that can be processed. This list option can be changed during processing.

- The functions for viewing lists for cost elements, cost centers, activity types and
economic processes. In master data list view, you can sort and filter data in a similar
way to using the list view toolABAP list viewer.

- To make selection easier in the future, the displayed objects can be grouped together.

© SAP AG AC410 3-24

 Master data groups

Types of costs Cost center Types of jobs Stat.indicators

.. Transport
.. Production. . Employees
Staff .. .. time .
.. .. .

Salary Salaries F1 F2 F3 FST1 PHR2 Employees Temporary.

staff

-SAP AG 2001

- Master data groups are used in Cost Center Accounting to consolidation of

different types of master data to perform analysis tasks, planning and
recalculation.
- Such groups can be used to process multiple master data records in one transaction, for
example as part of planning or reporting. For example, you can plan all cost elements
used by a given cost center by defining the appropriate cost element group. You can also
specify a cost center group if you want to create a report containing results for all cost
centers in a specific area.
- The master data groups function allows you to create hierarchical structures. In that In
this case, master data is assigned to groups at the lowest level and then consolidated into
groups belonging to higher levels. In accordance with organizational and economic
needs, any required number of hierarchical groups can be created.

- The standard cost center hierarchy is a special type of cost center group. All cost centers
controlling area must be assigned to a standard hierarchy. In parallel with the standard
hierarchy, an arbitrary number of alternative cost center hierarchies can be created using the
group maintenance functions.
- New master data groups can be created using existing groups in as templates for
copying.

© SAP AG AC410 3-25