Controlling Area and Company Code relationship in SAP?

A Controlling area can have the following 2 type of relationship with a
Company code
a. Single Company code relation
b. Cross Company code relation
This means that one single controlling area can be assigned to several
different company codes. Controlling can have a one is to one
relationship or a one is to many relationship with different company
codes.
Controlling Area is the umbrella under which all controlling activities of
Cost Center Accounting, Product Costing, Profit Center and Profitability
Analysis are stored.
In a similar way Company Codes is the umbrella for Finance activities.

Fiscal year and controlling area

Fiscal year and controlling area

Can I have a company code with fiscal year january to december and another company code with fiscal year april to march in the same controlling area?

If so, does the period "mapping" happen automatically?

As per Sap standards, if one has to assign more than one company code to a controlling area, then for all the company codes should have the same fiscal year and the same chart of accounts.

One cannot assign more than one company code to a controlling area with different fiscal year.

What is Controlling Area and Cost Center?

What Controlling is all about?

Controlling precedes CCA

The controlling area is the highest organizational level within CO. It must exist before Cost Center Accounting (CCA) can be used. A controlling area will be created on a one-to-one basis with the company code created in FI. This does not facilitate cross-company code accounting in CO. In order to facilitate cross-company code accounting, more than one company code is usually assigned to the controlling area.

Note the difference between cross-company code accounting and intercompany accounting.

Cross-company code accounting involves the allocation of costs across cost centers (or responsibility centers) existing in different company codes within CO. Intercompany accounting involves the recording of intercompany receivables and
payables in FI.

There are several factors considered when determining whether one or more controlling areas will be used. The major factors considered are whether cross-company code accounting is desired, and whether more than one chart of accounts is needed at the controlling area level. In addition, currency issues may also be considered.

Step 1 : Create Controlling Area:

Menu Path
IMG:Controlling > General Controlling > Organization >
Maintain Controlling Area T-Code : OKKP

On the "Choose Activity" pop-up window select the activity "Maintain Controlling Area" by double clicking on the corresponding line.

On the Change View Basic data: Overview screen: Click on the button.

On the "New Entries: Details of Added Entries" screen: Click on the button

On the resulting Pop-up, enter your Company Code
Hit to return to the main screen.

Note that the selection of this option has brought in a large number of Company default values to the input screen.
·CoCd -> CO area choose "Controlling area same as company code" from the pull-downmenu (click on the little icon at the very end of the row).

·CCtr std. Hierarchy STD_01 (say)
Hit to have SAP check the entry.
A pop-up box will come up with Standard Hierarchy STD_01 does not exist. Should system STD_01 be created as a standard hierarchy

Click to have the hierarchy created.

Click on the button to complete the transaction and return to the previous screen

On the Change View Basic data: Overview screen:

Select the line containing the newly create CO area

Double click on the "Activate components/control indicators" line (in the window on your right)

On the Change View Activate components/ control indicators

Details screen, enter:
Click on the button
· Fiscal year from Current year
· Cost Centers Component active (choose from the pull-down menu)
Other components will be activated in later exercises
· Select "Cost objects" by clicking on the check box
· Select "All currencies" by clicking on the check box (it may already be checked by default).
[Enables Controlling for all currencies]
· Select "Variances" by clicking on the check box

Click on the icon to complete the transaction

Click on the button to return to the previous screen

Note: You are also able to set Cost Center Accounting active and specify the respective settings through the following menu path: IMG > Controlling > Cost Center Accounting > Activate Cost

Center Accounting in Controlling Area.

On the Change View Basic data Overview screen:
Double click on the "Assignment of company code(s)" line (in the window on your right)
Click on icon.
Enter your company code or select it from the pull-down menu and hit . The system adds the

company name
Verify that the correct company code is pulled into the table.
Click to complete the transaction.
Go back to the IMG.

Step : 2 : Maintain Number Ranges

In CO, number ranges can be assigned to groups. This makes the process of creating number ranges more efficient by allowing several types of transactions to use the same number range.

IMG:Controlling > General Controlling > Organization > Maintain Number Ranges for Controlling

Documents T-Code : KANK

Now you need to define the Number Ranges for transaction group Useg values should for the FOUR groups for which number ranges will be assigned:

Text for Group Name From To Current
Number Number Number
Planning Transaction
Actual Transactions
Periodic Postings
Interface

On the Number Ranges for CO Document screen, enter:
·Controlling Area your controlling area
Click on the button

On the Maintain Number Range Groups screen:
Scroll down and ensure that all available CO transactions are listed as Not assigned

Use the Menu Path: Group > Insert
On the Insert Group Pop-up window:
Enter the data for a Group from the Data parameters table above
Hit after filling the data fields in the Pop-Up
Repeat this block of instructions until all FOUR groups have numbers assigned

Now Assign transaction types to each Group

To complete this , the following values should be used for the FOUR groups for which transactions types are to be assigned:

Planning Actual Transaction Periodic Interface
Transaction Transaction Posting
On the Maintain Number Range Groups screen:
Move to the area of Not assigned transactions
Double click on a targeted transaction to be selected. It will change color once selected.
Select all of the transactions to be assigned to a given group.
Move to the area listing the Groups.
Click on the box for the group to which the transactions are to be assigned.
Click on the icon on the toolbar to make the assignment.

Repeat this block of instructions until all FOUR groups have had their transactions assigned.
Click on the icon to complete the transaction and exit.

After the above go to Cost center Accounting

What's a Cost Center ?
They are buckets where costs can be captured ie an organizational unit wherein it defines the location of cost incurrence.

Now you go to Master Data and create the following :

1. Cost Center Hierarchies:
>Standard Hierarchy
Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Standard Hierarchy >

Change
>Functional Cost Center Group

2.Cost Centers
>For Production, Process, and Non-Production etc
Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Cost Center >

Individual Processing > Create
Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Cost Center Group > Create

3.Primary Cost Elements:
>By definition, must correspond to previously established G/L expense accounts.
Primary cost elements in CO mirror P&L accounts set up in the FI module (general ledger). They are used as the vehicle to transfer costs from the FI module into CO. If there is no primary cost element set up for a specific P&L account on the general ledger, the costs will not flow to CO.

For this reason, in practice, all P&L accounts on the general ledger are usually set up as primary cost elements in CO.

IMG:Controlling > Cost Element Accounting > Master Data > Cost Elements > Automatic Creation of Primary and Secondary Cost Elements > Make Default Settings

4.Secondary Cost Elements:
>Primary for allocation
Secondary cost elements do not necessarily mirror G/L accounts created in FI. They are created and used solely in the CO module to facilitate the movement of costs within CO (allocation, settement, etc.).
Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Cost Element > Individual Processing > Create Secondary

5.Activity Types:
Activity types represent cost drivers in CO. They can be used as a basis for cost allocations within the CO module.

Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Activity Type > Individual Processing > Create

See Activity groups also

6.Statistical Key Figures:
> say Number of employees
> Square meters if you want to allocate say floor space

Statistical key figures represent static data in the CO module. They can be used as a basis for moving costs in CO (allocations, etc.) when actual data or activity type data is not available or too difficult to obtain.

Menu Path:Accounting > Controlling > Cost Centers > Master Data > Stat. Key Figures > Individual Processing > Create
see Statistical Key figure groups also.

Cost Component Split In FICO

Can someone brief what is cost component split? What config is to be done?

In addition to standard iteration, price calculation enables you to calculate prices as a cost component split. This means that the output price of an activity type can be split into a maximum of 40 cost components. These cost components represent either:

Individual cost components (such as wages, salaries, or operating supplies) or the costs of complete cost centers (such as energy or maintenance cost centers).

The cost component split enables you to analyze which cost components are contained in the output prices of the activity types.

You can then control cost elements, cost element groups, and also entire cost centers in cost component splits. The corresponding cost center costs and the costs of the cost centers providing the activity are channeled into this cost component split. For example, if you have assigned the salary cost element to component 1 (salaries), then the system displays the salaries (for example, for a production cost center) in this cost component. If a plant maintenance cost center provides services to the production center, then the salaries for the plant maintenance cost center are assigned to this cost component.

Cost center splitting apportions activity independent costs to the activity types of the cost center. It does this by multiplying the total of the activity independent costs by the equivalence number of the activity type, and then dividing by the sum of the equivalence numbers. So if there are two activities, one with equivalence number 1 and the second activity has an eqivalence number of 2, then 1/3 of the activity independent costs will be apportioned to activity one, and 2/3 will be apportioned to activity two.

Activity independent costs are always fixed, so any variable costs will need to be planned as activity dependent costs.

Planned cost center splitting happens automatically when calculating the activity price. You can view what costs will be apportioned during activity price calculation by clicking on the Splitting menu item.

I've ran cost splitting against one cost centre. For this cost centre I know the planned activity rate (per hour) and the planned quantity (in hours) but the target cost calculated for the activity is slightly different to the result of these two multiplied together.

Is this calculation correct please?

Planned act. qty in period @ planned act. rate for period = target costs

If you have only one Activity for the cost center, then you do not need to run splitting. Just run activity price calculation. Splitting is required only if you are allocating the same costs to 2 or more activities.

The calculation is generally right. The other thing to check will be rounding of the time (mins/hours) and value.

Requires an Assignment to a CO Object

The first time Account 820290 was only created in FI as a primary expense. After that this account was created in CO too as a secondary expense and any posting will appear an error: Account 820290 requires an assignment to a CO object

Question : How to correct this account back to FI only and not to appear in co?

Note :
Account 820290 requires an assignment to a CO object
Message no. KI 235

Diagnosis
You have not defined a CO account assignment for an account that is relevant to cost accounting.

System Response
Account 820290 is defined as a cost element.
This means that you must always specify a CO account assignment.

Procedure
Enter one of the following CO account assignments

Order
Cost center / cost center/ activity type
Sales order item (for a project or cost relevant)
Project / WBS element
Cost object (Process manufacturing)
Network/ Network activities
Business process
Profitability segment
Real estate object
The posting row affected is 000, account 820290.

First, if G/L account was created in FI, you can only create primary cost element in CO.

Secondary cost element can only be created if no account exists in FI.

Second, if you created the primary or secondary cost element in CO, you have to assign CO account assignment.

You can delete cost element in CO (KO04) if dependent objects found.

Third, when you create cost element in CO, documents would be also created in ‘Cost center accounting’ and ‘Profit center accounting’ when posing in FI. If no cost element exists in CO, no related documents would be created in CCA and PCA.

How does one Deactivate a Cost Center

How does one Deactivate a Cost Center?

I can find a tcode to Activate an Inactive one but how do I deactivate a CC. Or is it so simple I cannot see it...

Marios

Go to KS02- Change Cost Center. Go to the Control Tab. Tick on the checkbox for desired transaction activity you want to lock. Any postings made against the cost center under locked activity/ies will not be allowed.

Tiongco, Jezel D.

Thank you, I knew I could block the postings but I want to somehow make the Cost Center Look Inactive.

To explain:
In transaction OKEON (Change Standard Hierarchy) I have Green Dots for Active CC's. The legend (attached) says a Red Dot is for Inactive CC's.

How do you do that?

Marios

Hi Marios, If you want to change the status to inactive, the only optioin as far as my knowledge is concerned is to change the validity period. when you double click the cost centre, details of cost centre will be displayed at the bottom by T code OKEON and you will find the status of cost centre there, just right of that you will find button to change the validity period, change the period to some future date then it turns to inactive status.

Kittu

Excellent! It works.

Thank you very much.

I had changed the Validity Period before but I set it to start right where the previous time horizon ended so looking in the future this was always active.

What is Production Order Settlement?

Settlement is nothing but offsetting the costs to the FI portion. CO objects carry costs, which needs to be re-assignd to the G/L accounts where it comes from.

CO never generates any data, it only tracks the same onto some objects which are analysed for definite purpose of tracking the resources which are debits in FI as costs in G/L).

In simple words, the flow is like following -

1. Direct Costs are incurred ( like material consuption ) in form of issues to prod orders. These are captured in G/L. Whenever you issue, consumption account is debited. But are also debited to prod order as

Consumption...Dr
Inventory.......Cr

2. Indirect costs are incurred in form of debits to Cost centers in G/Ls. These are actually to be allocated & absorbed in Products via Prod Orders. So it is allocated to prod orders via diff media like costing sheet or Indirect activity allocations.
Here again Prod order is debited with some amount.

When the costs are incurred these should be transffered futher when the order is closed or deliverd to stock.
So whenever you deliver the order, the follwing entry is generated-

Inventory....Dr
Cost of Prod /Mfg Variance.....Cr

If your Fin Goods' predetermined cost are same as that of actual costs incurred, there will no price difference account affected. But when your plan cost ( target cost ) & actual costs are differnet, the difference is OFFSET or SETTELLED
to price diff accout as-

Cost of Prod / Mfg Var....Dr
Price diff acc..........Cr

Note that Price diff accont is not created as COST ELEMENT.

If actual cost is less than target cost, entry would be reverse.

Populating Transaction Type during Order Settlement

You have an internal order that you want to settle to a balance sheet account. This accounts field status makes the transaction type (BSEG-BEWAR) required. During settlement you receive error message F5 808 stating that this field is status initial but the field is required. This field is not available to you in the settlement rule definition. Is it possible that this field is suppressed? You could not locate a means to display or require it if so. You attempted to resolve this using a substitution that would popluate the transaction type field. However, during execution you did not hit the breakpoint you put into the user exit. How to overcome this issue?

You can change the requirement of the field in the "Field Status" of the account (Financial Accounting -> General Ledger Accounting -> Business Transaction -> G/L Account Posting -> Carry Out and Check Documents Settings -> Maintain Field Status Variants)

or

In transaction OB41 where you define posting keys and its "Field status". Both "Field Status" are maybe differents, but if in one of them the field is like "required entry" you have to change it. But if you are posting a fixed asset account, you will need this field completed because it defines the movement you are making.

Simple Overview of Product Costing

SAP Product Costing deals with Plan Costing + Actual Costing of Finish products or Services.

CO comprises Product Costing + cost accounting integrated with FI.

It uses Integrated Cost Accounting.

Product costing also has 2 phases depending on the Mfg Scenarios. If you are a normal mfg comp, making goods to stock & sale, you have to first do planning of the costs of products initilally as a STD COST of a product. This is used in many phases in SAP CO acounting. In simple terms, you cost a product by different methods depending on different LIFE CYCLE phases of product. These are Development of new product. Growth stage by modifying it. Mature stage (mass prod). Decline Retirement of that product from Mfg+Mktng)

The whole CO process starts with this PLANNED costs of products & ends with totalling the STD Costs for Actual Production.

This is a simple Std cost Accounting system, in which the end result is calculating Variance bet Planned & Actual & analysing those for further corrective actions.

Product costing is well integrated to FI, but only where overhead cost accounting is used. Otherwise normally it used only for settlement.

All these actual costs of Prod are finally settled/offset to FI or Profitability segments.

SAP CO is a very vast & complicated module of all. It needs deep understanding of the subject.

This give you an overview glimpse of SAP CO.