Public
July 2015
SAP INDIA
CO module presentation by ICT FI CO Team
Presentation Overview
SAP CO ?
CO Master Data
CO - Part of Business Processes
CO - Internal Processes
Agenda
9h30 am
- SAP CO ?
- CO Master Data Part 1
11h00 am
- Break
11h15 am
- CO Master Data Part 2
1h00 pm
- Lunch Break
2h00 pm
- CO - Part of Business Processes Part 1
3h15 pm
- Break
3h30 pm
- CO - Part of Business Processes Part 2
- CO - Internal Processes
4h30 pm
- Car Park Review
5h00 pm Meeting End
3
SAP CO ?
Sub-Presentation
SAP CO ?
What is it ?
How is it structured ?
SAP CO ?
What is it ?
SAP Analytical Tool to :
Analyze the Revenue and the Margin
Track & Analyze the Costs
Valuate :
the product vs Production process & Stock operations
the Customer Service
Give an Analytical View of the Financial P&L
SAP CO ?
What is it ?
Collector of all In & Out Financial flows for a company
Fr
om
Profitability
Analysis
Service Order
CS
One of Data Source for BW Reporting Tool
7
Material Management
MM
Sales Order
SD
Producti
on Order
PP
Financial
Accounting
FI
Bu
sin
e
M ss
od .. Te
ul to rm
e
SA s
P
Analytical
Accounting
CO
SAP CO ?
How is it structured ?
-
Operating
Concern / COPA
- IMOC
Revenue
& Gross Margin
Analysis
Group Analysis
Drill down
Organizational Structure in CO :
IO 1
IO N
Profit
Center
1
MI
India
CCtr
1
CCtr
N
Profit
Center
N
Internal Order
1
Internal Order
N
Profit
Center
1
Cost
Centers 1
Cost
Centers N
Profit
Center
N
Controlling Area
- IMCA -
Legal Entities
- Company Codes -
Chart of Account
- IMGP -MI .
Plant
s
Organizational Structure (Cross
Company)
Internal P&L and Budget follow-up
Sales
Organisation
8
G/L account
Account payable
Account receivable
SAP CO ?
How is it structured ?
Controlling Area (IMCA) definition :
For Company core model, there is single Controlling Area (IMCA)
A self-contained organizational structure for which costs and revenues can
be managed and allocated.
It represents a separate unit of cost accounting.
It enables management accounting and reporting across legal entities
(company codes)
It includes master data like Profit Center, Cost Center, Internal Order, etc
It is one key data source for BW Cube and MI Group Reports (ex.:
OPEX), and then IP
SAP CO ?
How is it structured ?
Operating Concern (IMOC for COPA) definition :
For Company core model, there is single Operating Concern (IMOC)
with USD currency. However the local currency is always available.
An organizational unit for which the sales market has a uniform structure.
Used as the valuation level for Profitability Analysis.
Its structure is determined by :
Analysis criteria (characteristics)
Values to be evaluated (value fields)
It is one key data source for BW Cube and MI Group Reports (ex.:
Management Report)
and then IP
10
SAP CO ?
How is it structured ?
Profit Center
A management oriented organizational unit used for internal controlling
purposes. It is a sub element of a company, and it is assigned to one
controlling area.
Cost Center & Internal Order
An organizational unit, within a controlling area, where costs can be
planned, collected and analyzed.
11
Questions ?
CO Master Data Part 1
13
Sub-Presentation
CO Master Data Part 1
2 Standard Hierarchies
Profit Center
Cost Center
15
CO MASTER DATA Part 1
2 Standard Hierarchies (1/2)
One for "Profit Center"
One by Company Code
16
CO MASTER DATA Part 1
2 Standard Hierarchies (2/2)
One for Cost Center :
One by Company Code
Based on COGS / SG&A split
and Division Organization
17
CO MASTER DATA Part 1
Profit Center
Profit Centers are Sub elements of a Company. They can:
Drive Planning
Track Planned & Actual costs
Help analyzing Costs, Revenues and B/S items
Profit Center can be used to get a P&L by Profit Center (Cost
and Revenue accounts): each profit center producing its own
P&L and Working capital.
Profit Center are used to split a legal entity in several profit
centers e.g. Headquarters (xxx30), Production (xxx20),
Distribution (xxx1z) (Direct & Indirect), thus acting as
companies within the company.
18
CO MASTER DATA Part 1
Profit Center
19
CO MASTER DATA Part 1
Cost Center
Cost Centers are the skeleton of the company organization,
they:
Drive Planning
Track Planned & Actual costs
Provide to each department appropriate planning tools
Provide a transversal cost view at Group level
The cost center hierarchy reflects the Organizational
Structure of the company.
The cost center is level at which costs are:
Planned
Posted
Reallocated
Every Cost Center is assigned
to One Profit Center only (n to
1 relationship)
20
CO MASTER DATA Part 1
Cost Center
Codification Principles 7 digits : XXX D B ZZZ
XXX =
D =
B
=
Company Code (digits)
Division (digit or letter) cf. next slide
BU / Not BU and Local / Structure (digit) applicable for SG&A cost
centers
ZZ =
Chrono number, except for "Bad Debt" and "Allocated cost centers"
We will see in detail the Cost Center codification principle in
another dedicated session
21
Questions ?
BREAK 15
23
CO Master Data Part 2
24
Sub-Presentation
CO Master Data Part 2
Internal Order
Cost Element
Activity Types
Statistical Key Figure
Characteristics in COPA
Master Data not dedicated to CO
25
CO MASTER DATA Part 2
Internal Order
Internal orders are used to plan, collect, monitor, and settle
the costs of specific operations and tasks performed within a
company.
Internal orders can be used for different purposes. This
functional classification is reflected in the different order
types, which define the way orders are processed in the
system.
The internal order can be used independently or combined
with a cost center.
26
CO MASTER DATA Part 2
Internal Order
There are 2 natures of Internal Order :
The general categories of real internal orders include R&D orders,
Customer Projects, and Investments. Only real internal order can be settled
(cf. next slide)
On the other hand, miscellaneous projects are statistical internal orders
27
CO MASTER DATA Part 2
Internal Order
Type
The Order Types list :
We will
see in
detail the
Internal
Order use
principle
in another
dedicated
session
Description
Real
Statisti
cal
YA01
CO/ Administrative Project
YC01
CO/ CATS Projects
YD01
CO/ Miscell. Projects
YI01
CO/ Investment Order (SelfFin.)
YI02
CO/ Production Investment
Order
YI03
CO/ Purchase Investment
Order
YL01
CO/ Logistic Project
YM01
CO/ Moving Costs
YMA0
1
CO/ Marketing Costs
YO01
CO/ Maintenance Order
YP01
CO/ Customer
Project
28
X
X
X
X
CO MASTER DATA Part 2
Internal Order
Real Internal Order Settlement Rules :
Depending on the Order Type various settlement rule can be applied
Cost Center
Order
Profitability Segment (COPA)
G/L Account
29
CO MASTER DATA Part 2
Cost Element :
There are 2 types of cost element :
Primary Cost Element
Secondary Cost Element
PRIMARY COST ELEMENT :
External (FI) and Internal (CO) accounting are two separate accounting ledgers in SAP : the
primary cost elements act like P&L accounts flagged as to collect in CO
Used for allocating cost from FI to CO
Specific 996* cost element use in IP for the Budget
30
CO MASTER DATA Part 2
Cost Element :
SECONDARY COST ELEMENT :
Used for allocating costs from CO to CO
Track all internal activities in cost controlling settlements, Result analysis
(WIP accounts), Overhead, Re-allocation, Activities
31
CO MASTER DATA Part 2
Activity Type
The activity type represents some form of productive output
by a cost center. Common examples of activity type would
include labor hours or minutes of machine time.
Activity types are used to allocate costs from a sender cost
center to another CO object (e.g. service order, production
order, internal order, cost center, etc.) based on the
number of units of the activity performed and driven
by a Secondary cost element.
A unit price is used to value
the activity quantity.
32
CO MASTER DATA Part 2
Activity Type
There are several activity types in order to identify the nature
/ source of declared hours :
SERVICE ORDER
-Technician
activities-
PRODUCTION
ORDER
-Manufacturing
activitiesINTERNAL ORDER
-R&D, IT time
tracking33
CO MASTER DATA Part 2
Statistical Key Figures
It is key figures related to quantity unit (non-monetary)
It is usually related to organizational units :
Headcount
Square meter
It can be used in reporting and in cost allocation process
34
CO MASTER DATA Part 2
Characteristics COPA
Characteristics are master data that enable you to answer
the question: What do I want to report on?
Examples: Divisions, Regions, Products, Customers
Characteristic Values answer the question: What values can
I have for these characteristics?
Examples: Profit Center, Interco Customer, Order Type
Value fields in COPA are the P&L Reporting lines with
Analytical View
They answer the question: What performance measures do I
want to track and analyze?
Examples: Gross Sales, Surcharges, Discounts, Cost-of-Sales, Gross Margin
35
CO MASTER DATA Part 2
Characteristics COPA
36
CO MASTER DATA Part 2
Characteristics & Amount from COPA BW
CubeSPP Report
37
CO MASTER DATA Part 2
Master Data not dedicated to CO
Master data not belonging to CO but used in CO:
CS Master data:
Work Centers
SD Master Data:
Pricing Conditions
MM Master data:
Source List
for
Production
fo
r
Ac Ser
tiv vic
ity e
Purchase Info Record
PP Master data:
Bill of Material
Routing
General Master data
Material Master (Costing view)
38
CO MASTER DATA Part 2
Master Data not dedicated to CO
Master data not belonging to CO but used in CO:
CS Master data:
Work Centers
SD Master Data:
Pricing Conditions
MM Master data:
Source List
Purchase Info Record
PP Master data:
Bill of Material
Routing
General Master data
Material Master (Costing view)
39
Questions ?
LUNCH BREAK
41
CO Part of Business Processes
Part 1
42
Sub-Presentation
CO Part of Business Processes Part 1
Planning Process & Budgeting
Costing (MM)
Production Controlling (PP)
Customer Service Controlling (CS)
44
CO Part of Business Processes
Planning
PartProcess
1 & Budgeting
Applicable only in / for SAP
Minimum that SAP requires to work properly : Activity hourly rate per cost centers
(mainly Technical and Manufacturing)
For Costing of Semi-Finished and Finished Products:
Update the Purchase Info Records (of Raw Material & Sub-contracting)
Update the activity hourly rate
Update % overhead
Indirect Allocations / Cycles (periodic allocations, distributions, assessments)
Statistical Key Figures planning
Secondary costs element
Applicable for IP
Cost Center and Real Internal Order master data
Primary costs element 996*
Budget on Cost Centers
Budget on Internal Orders through Cost Center Responsible principle
45
CO Part of Business Processes
Part
1
Costing (MM)
Standard Costing
Standard cost is defined at the beginning of the fiscal year and is available
for the entire year
All material (Finished products and Raw Materials) are valuated at standard
price
The newly calculated price is updated in the database
In the production process standard cost is used for:
Variance valuation
WIP calculation
Scrap valuation
In the Business process, standard cost is used for :
Valuating the Cost of Goods Sold (COGS) and so the Commercial Margin
Overhead Costs for Freight, Duties In, Incoming goods control and
Procurement are applied on Raw Material consumptions.
46
CO Part of Business Processes
Part
1
Costing (MM)
Standard Cost Strategy
Depending on the Procurement Type of the material (E = In-house
production / F = External procurement), the costing strategy will be
different :
In case of External Procurement, SAP takes the value in the following priority
list :
. Planned Price 1
. Purchase Info Record (PIR)
. Planned Price 2
. Old price from legacy
In case of In-house Production, SAP takes the Build of Material (BOM) and the
Routing
47
CO Part of Business Processes
Part
1
Costing (MM)
Costing Process / Costing Variant
In the costing process we distinguish :
Configurable materials
Non Configurables materials
We valuate also 2 costing variants
ZPC1 for Legal Valuation (in Local Currency)
ZPC2 for Profit Center Valuation (in USD)
ZPC1 Non
Configurable
ZPC1 Configurable
ZPC2 Non
Configurable
ZPC2 Configurable
Platform
Sales Op.
100
100
1.000
1.000
129 $ (=100 )
TP (200 $)
1.290 $
(=1.000 )
TP (2.000 $)
48
CO Part of Business Processes
Part
1
Production Controlling (PP)
The Production Order is considered also as a CO object
It will collect actual production costs related to :
Material consumption (raw material, semi-finished product, etc.)
Production hours declaration (backflushed with Activity Type)
Subcontracting (vendor invoice on PO)
Overhead (% for Procurement, Freight In, Duties In, Control In)
49
CO Part of Business Processes
Part
1
Production Controlling (PP)
Then, depending on the status of PP Order :
Not TECO :
SAP sums the actual costs in order to valuate the WIP, posted then in FI only
CNF-Confirmed or TECO :
In comparison with target cost (= Produced Qty x Standard Cost), SAP valuates
some variances
by type of cost
These variances will be then settled to COPA on dedicated value fields
50
CO Part of Business Processes
Customer
Part 1Service Controlling (CS)
Customers orders will be created depending on different
business cases:
Installation of a printer (basic, validation) // Training (with equipment
installation)
One time agreement (W/o contract) : consulting, training in house or on site
One time agreement : Helpdesk (curative intervention, end-user warranty)
Service Contract flow (corrective, training, preventive maintenance)
Pre sales
Return and repair
51
CO Part of Business Processes
Customer
Part 1Service Controlling (CS)
A CS order in SAP is so-called CO object that bears different types
of information:
Order type
Order Status
Costs incurred on this order
Settlement rules
On CS orders, technicians confirmed
the time they spent (this time is valuated based on hourly rate)
the items they used (material cost).
Then orders are subject (or not) to billing
52
CO Part of Business Processes
Part
1Service Controlling (CS)
Customer
There are several order type that we can categorize as follow
Chargeable :
Not Chargeable
Directly
(impact : only settlement to SD,
Contract or COPA at month end)
GROUP 1
Create Manually after a
welcome desk / helpdesk
notification
GROUP 2
Create Manually after an
internal notification
GROUP 3
Create Automatically
(triggered by SD)
GROUP 4
Create Automatically (by
contracts/maintenance
plans)
ZC14 - Return for missing parts
ZC20 - Curative intervention settle
on contract
If the service order is not
chargeable, it is not relevant
for Result Analsys (RA)
calculation; so at month end :
ZC31 - Return & Repair
ZC50
- Systemsthe
& application
settle
- Whatever
status is
: all
oncosts
project
will be settled to SD,
ZC70 - Pre sales
Contract
or directly COPA
ZC72
- Field Test
ZC01 - First Installation Fee
ZC02 - Consulting
ZC05 Training
ZC25 - Training settle on contract
ZC28 - Preventive Maintenance on
contract
53
(impact : Specific CO month
end process with Result
Analysis)
ZC10 - Curative Intervention
If the service order is
ZC12 - End User Warranty
chargeable
, it means that
ZC13
- Service Warranty
ZC16 -itWorkshop
Subsidiary
is relevant
for RARepair
ZC18
Preventive
Maintenance
on:
calculation; so at month end
demand
ZC32 - Reinstallation chargeable
If the status is TECO :
all- Repair
revenue
and costs will
ZC30
Center
be settled to COPA
-
If the status is not
TECO : costs will go
to WIP (FI posting only)
CO Part of Business Processes
Customer
Part 1
Service Controlling (CS)
CS orders are the basis if you want to monitor your service activities:
They gather :
the costs
the revenues
They bring with them a lot of information to be displayed as
characteristics in COPA after settlement
Some of them are target of WIP calculation
Their settlement rule is set :
Either to settle on a SD object
Or to show directly a margin for the service intervention in COPA
Or to settle to a FI WIP account: this means that some of the CO closing process will
actually create some postings in the FI module only
54
Questions ?
BREAK 15
56
CO Part of Business Processes
Part 2
57
Sub-Presentation
CO Part of Business Processes Part 2
Customer Order Profitability Analysis (SD)
Contract (SD)
58
CO Part of Business Processes
Customer
Part 2Order Profitability Analysis (SD)
From a CO perspective, SD orders are split into 2 different
categories:
normal SD orders:
They bring revenue (invoice)
And COGS (outbound delivery)
They are transferred to COPA at invoicing time
SD orders cost collector:
An SD order cost support will be the target of a CS order settlement
Those types of order are CO objects
Thus target to RA analysis (WIP)
Thus target to settlement
They are transferred to COPA at closing time
59
CO Part of Business Processes
Part
2
Customer Order Profitability Analysis (SD)
Time discrepancy for Normal orders shipped from
Subsidiary SD
stock
Outbound
Delivery
Invoice
SD
FI
COPA
COGS
Nothing
Revenue
Revenue & COGS
FI
COPA
MI
MI
Time discrepancyMI
forUS
Printer orders
shipped
MI USfrom Platform
Canada
Outbound
Delivery
Customer Invoice
F2
Interco Invoice
Canada
COGS
Revenue
Revenue
Revenue
COGS
Revenue &
COGS
COGS
60
CO Part of Business Processes
Contract
PartProfitability
2 Analysis (SD)
The creation of an SD printer order (with installation) also create automatically a service
notification and a CS Order.
The SD order / line item for installation has become a CO object
This case is applicable for :
ZC01
ZC02
ZC05
First Installation Fee
Consulting
Training
61
CO Part of Business Processes
Part
2
Customer Order Profitability Analysis (SD)
General Integrated View
2
SD ORDER
- Printer
- Installation Revenue
Revenue
Recognit
ion
(RR)
FI
s
COGS
Auto. Creation
CS
Order
(First
Intal.)
- WIP
Revenue
- Accrual
s
- Reserv
es
Result
Analys
is
Settlement
(RA)
Settlem
ent
4
COPA
-
62
Revenue
COGS
CO Part of Business Processes
Part
2
Contract (SD)
Contracts are specific sales orders that are also cost support
As particular cases of SD orders cost support, contracts will
Have CS orders settled on them
Be the target of a RA key
Be the target of settlement
Keep in mind that the RA key will only be meaningful if the
planned data has been keyed in properly
63
CO Part of Business Processes
Part
2
Contract (SD)
During period end closing, the system handles the contracts
this way:
You settle all CS orders (including the ones settling on contracts), meaning
that you gather all costs on the CO object, in this case the contract
You recognize the revenue on contracts (meaning that you have SAP
calculating what has to be recognized as revenue on the contract and what
has to be booked as accruals)
You perform the Revenue Analysis using the RA key gathering all this
information
You settle the contract
64
CO Part of Business Processes
Part
2
Customer Service Flows Conclusion (SD / CS)
CS
Order
Settleme
nt
FI
CS
Order
CS
Order
CS
Order
RA
SD
Order
RR
RA
. Revenue
. Costs
Contrac
t
(Actual vs
Planned)
Settleme
nt
Settleme
nt
NOT
TECO
TECO
NOT
TECO
TECO
COPA
-
RR
RA
. Revenue
. Costs
65
Settleme
nt
WIP
Accruals
Reserve
s
Whatev
er the
case is.
Revenue
COGS
.
Questions ?
CO Internal Processes
67
Sub-Presentation
CO Internal Processes
PP/CO Industrial Closing Process
SD-CS/CO Business Closing Process
FI / CO Stock valuation Closing Process
CO / CO Analytical Closing Process
68
CO Internal Processes
PP / CO Industrial Closing Process
Industrial Closing goes in parallel with Operation closing
Related to Production Order
Always done :
. Overhead Calculation
. Actual Settlement
If NOT TECO status :. WIP Calculation
If TECO status :
only
. Variance Calculation
69
posting in FI only
settlement in COPA
CO Internal Processes
CS-SD / CO Business Closing Process
Revenue Recognition
CS Orders checks :
Status for Old CS Orders
Result Analysis
Settlement
SD orders checks (includes standard orders and contract) :
Result Analysis
Settlement
70
CO Internal Processes
FI / CO Stock valuation Closing Process
FIFO adjustments
Analyze the proposed adjustments
Confirm the amount to Controller for FI posting
Inventory Depreciation
For Opco : please analyze proposal from BW Inventory Depreciation Report
For Platform : please use current MI process
Then confirm the amount to Controller for FI posting
71
CO Internal Processes
CO / CO Analytical Closing Process
All following tasks are included in the CO closure document
Internal Orders settlement
from IO either to Cost Center or to COPA
Distribution Cycles runs
from Cost Center to Cost Center, with using same account as in FI 6* and 7*
Assessment Cycles runs
From Cost Center to Cost Center, with using a secondary cost element 942* (ex. Allocated costs), except
94250000 used only for Assessment to COPA
Actual Assessment to COPA
From Cost Center to COPA (mandatory for ensure that COPA = FI) by using secondary cost element
94250000
OVH Manual bookings in COPA
Only in case if you sell Raw Materials
72
Questions ?
CAR PARK REVIEW
74
Confidential &
Proprietary
Thank you for your Attentio
