SAP
Controlling
and
COST center
Accounting
(CO-CCA)
Overview of SAP Controlling Module
The Controlling (CO) component of SAP R/3 system
contains all accounting functions necessary for
effective controlling for businesses. Every organization
normally have an external and internal accounting
viewpoints. The external viewpoints is represented by
Financial Accounting (FI) component and
Controlling (CO) represents the internal accounting
viewpoint. CO component of SAP system offers a
broad selection of functional tools that can be used to
provide management accounting information that are
useful for management decision making. Do
remember that Financial Accounting and Controlling
are independent components of the SAP system. The
data flow from the CO component to FI component
takes on a regular basis.
v Cost Center Accounting determines where costs
are incurred in the organization.
v To achieve this aim, costs are assigned to the
sub areas of the organization where they have
the most influence.
v By creating and assigning cost elements to cost
centers, you not only make cost controlling
possible, but also provide data for other
application components in Controlling, such as
Cost Object Controlling.
v You can also use a variety of allocation methods
for allocating the collected costs of the given cost
center/s to other controlling objects.
SAP Controlling and Cost
Center Accounting Concept
Concept of Over Cost Center
head cost
Activity Type
controlling
Statistical Key
Over head cost
Figure
management
Internal Order
CO – CCA Master
Data Actual Expense /
Revenue Posting
Concept of Cost
element and GL Period end closing
Cost Center Reporting
Profit Center Accounting (EC-PCA)
A profit center is a management-oriented organizational unit
used for internal controlling.
For instance, you may treat each of your product group as
profit center in the system. This enables you to monitor the
revenues and costs attributable to each product group. You
can do an evaluation on each profit center; profit and loss
and balance sheet.
Profitability Analysis (CO-PA)
The profits and contribution margins for market segment of
a company can be analyed using Profitability Analysis
application component of SAP.
The objective of COPA is to support sales, product
management, and corporate wide planning and decision
making, using an external view from a market oriented
perspective.
Controlling:
Controlling provides you with information for
management decision-making. It facilitates co-
ordination, monitoring and optimization of all
process in an organization.
Features of Controlling:
Cost Center Accounting, Activity Based Accounting,
Internal Orders, Product Costing, & Profitability
Analysis.
Controlling Area: Organization unit that
represents a closed system Used for accounting
purposes.
You can assign one or more company codes to one
controlling area.
If you assign more than one company code to one
controlling area, then you need to note the following.
1. Consistent Chart of a/c’s (Treat each cost element in
all company codes in same way).
2. The Operative fiscal year variants in the company
codes must match the fiscal year variant in
controlling area.
3. You should execute period end closing in controlling
for all company codes at same time.
4. The system only post reconciliation posting across
company codes without taxes, which means that it
cannot automatically create invoice.
5. Maintain controlling area - OKKP .
6. Maintain no. ranges for controlling documents
KANK
7. Maintain versions in - OKEQ
Cost centers - are divisions that add to the cost of
the organization, but only indirectly add to the profit
of the company. Typical examples include Research
and Development, Marketing and Customer service
Cost Element - Basically, cost element are carriers of
costs.
Primary cost elements are like material costs,
personnel costs, energy costs...
where a corresponding GL account exists in FI.. to
allow costs to flow...
Secondary cost elements are like production costs,
material and production overheads, they can be
created and administered in only CO. These are used
in internal cost allocation, overhead calculation,
settlement transactions., these do not flow to FI...
Controlling is broken
down into the following
sub modules:
vOverhead Cost Controlling
vProduct Cost Controlling
vSales and Profitability
Analysis
vActivity Based Costing
Controlling in sap consists of:
Organizational unit
Controlling area
for cost accounting
Organizational unit
Cost center
for cost control
Organizational unit
Profit center for internal profit
analysis
SAP R/3 Organizational Elements for
Financial Reporting and Analysis
Internal accounting is purely for internal use and
serves to control and manage the organization. It is
constructed along the lines set by management and
must be flexible
The Audit Trail
Every transaction in the system is represented by a document,
a document records a business transaction.
Documents are accessible in real time and are stored centrally.
Data resulting from transactions posted to the system can be
viewed at every level of detail from the original document, to the
final report.
The system provides an audit trail of the reporting information
through the drill down capabilities.
All data relevant to cost, flows automatically to Controlling from
Financial Accounting. At the same time, the system assigns the costs and
revenues to different CO account assignment objects, such as cost
centers, business processes, projects or orders. The relevant accounts in
Financial Accounting are managed in Controlling as cost elements or
revenue elements.
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.
As well as documenting actual events, the main task of controlling is
planning. You can determine variances by comparing actual data with
plan data. These variance calculations enable you to control business
flows.
Income statements such as, contribution margin accounting, are used to
control the cost efficiency of individual areas of an organization, as well
as the entire organization.
Transaction Codes Used
Maintain Controlling Area
Maintain No. ranges for controlling Area
OKKP
KANK
in
Creation of Primary cost element for
Sap Controlling
controlling area KAO1
Make Default Settings OKB2
Maintain Plan/actual Versions OKEQ
Maintain Controlling Area settings OKE5
To view the cost elements created KA03
Creation of Profit Center KE51
Creation of cost center KS01
Creation of cost center groups KSH1
Creation of cost element group KAH1
To view the cost center line item report KSB1
Line item report for Profit Center KE5Z
Table to look up cost centers CSKS
To view all controlling reports GR55
