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AC040 Cost Management and Controlling Cost Management andControlling Cost Management andControlling.

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Presentation on theme: "AC040 Cost Management and Controlling Cost Management andControlling Cost Management andControlling."— Presentation transcript:

1 AC040 Cost Management and Controlling Cost Management andControlling Cost Management andControlling

2 SAP R/3 architecture R/3 SD MM PP QA PM HR FI FI-AA PS WF IS Client/Server ABAP/4 Client/Server ABAP/4 CO

3 Overview CO processes Representation of your businessu in CO +ABC Planing and integrated planning CO DM FI MM HR SD AA Postings to CO from other modules 1 CO 12 $ Transaction based postings in CO 112 OMPCProfit FICO Period end posting $ t OMPCProfit Reporting tools Summary ASAP Introduction Support of project flow Navigation OMPCProfit INTEXT FIMMHRSDAA Overview of Controlling Introduction CO

4 Accounting in R/3 Profit Centers Consoli-dation Enterprise Planning TR TREASURY Cash Treasury Funds CO CONTROLLING FI Financial Accounting Investments and Financing General Ledger Payables/ Receivables Assets Cost Controlling Revenue Controlling FIIM EIS Enterprise Controlling EC

5 Overview of CO Components Profit center accounting Consolidation Enterprise Planning CO CONTROLLING Profitability analysis Sales analysis of products and services Contribution margin Profitability analysis by organizational units EIS Enterprise Controlling EC COCO CONTROLLING Overhead and process costs CONTROLLING Product cost calculation Cost/Revenue elements Cost centers Activities Internal orders and projects Activity Based Costing Product cost planning Sumiltaneous calculations Actual calculations Cost allocation by sources

6 CO Components in Mitas Branches Profit center accounting CO CONTROLLING Profitability analysis Sales analysis of products/goods and services Contribution margin Profitability analysis by organizational units Enterprise Controlling MC CO CONTROLLING Overhead costs Cost/Revenue elements Cost centers Internal orders Cost allocation by sources

7 Controlling Architecture HR Internal Order Cost Center EC- PCA Profit Center Accounting Overhead Cost Controlling Human Resources CO OM CO- PA Profitability segment Asset WIP Revenue FI Stock Procure Product Warehouse Sales Profitability Analysis Financial Accounting Cost Element Accounting

8 Important Controlling Areas Cost allocation according to source of costs Typical Controlling Activities Overhead Cost Controlling ProfitabilityAnalysis Sales Planning Drill- down- Reporting Profit Centers Analysis Transfer Prices Planning Price Calculation Distribution Assessment

9 Organizational Units AA A Operating Concern M001 Controlling area M001 Company codes AT01, DE01 … Emphasis: External Accounting CO-OMCO-PCEC-PCA CO-PA Plant DE01 Plant … Plant AT01 Purchasing organization AT01, DE01 … Purchasing organization AT01, DE01 … SD MM Emphasis: Logistics Procurement and sales Sales organization AT01 FI BA AT01BA DE01… Sales organization DE01 Sales organization …

10 Multiple Assignment FI Profitability Analysis Profit Center Accounting EC- PCA Operating Concern M001 CO PC Controlling area M001 Company code AT01Company code DE01 … Currency: EURO Chart of accounts M001 Fiscal year variantK4 Currency: EURO Chart of accountsM001 Fiscal year variantK4 Currency: EURO Chart of accounts M001 Fiscal year variant K4 CO PA CO OM Currency: EURO

11 Accounts and Cost Elements Profit Center Accounting Chart of Accounts M001 Primary CElems 56 Second ary CElems Second ary CElems Revenue elements 0123 Current assets and short- term capital 4 Non- operating costs, revenues Material inventory Financial Accounting Expense accounts 78 9 Semi- finished products and finished products Closing Financial Accounting Revenue / Inventory change/ current internal activity 1 Current assets and short- term capital 2 Non- operating costs, revenues Controlling 3 Material inventory

12 Cost Elements and Revenue Elements Costs Primary costs Primary CElem categories Primary cost elements FI G/L account Chart of accounts M001 Secondary CElem categories Secondary cost elements Secondary costs Predefined by SAP CO master data level FI master data level Management level M001 use only primary CE. Primary CE categories : - 1 Cost - 11 Revenues (integration - SD)

13 Master Data in Overhead Cost Controlling Overhead Cost Controlling Product Cost Controlling Product Cost Controlling Cost object Profitability Segment Profitability Analysis Profitability Analysis Profit Center Accounting Profit Center Accounting Profit Center Process Cost Center Internal Orders

14 Cost Centers Basic Data Address Data Communication Control Data Validity Period Indicator Cost Center

15 Cost Centers in Controlling area M001 Basic Data 65xyCGS Germany – detail structure of CC 6820CGS Italy 6830CGS Spain 6840CGS Austria 6860CGS UK 6880CGS France 6910CGS Ireland

16 Internal Orders Assignments General Data Order Type Details Period-End Closing Control Data Internal orders Internal orders

17 True and Statistical Objects in CO ProfitabilitySegment InternalOrdersCostCenter AA CO FI Project CostObject Networks True ObjectsStatistical Objects..... Cost Origin StatisticalOrder Statistical Project Statistical Project Profit Center MMSD

18 Internal Order Internal Order Types in M001: ZCA1M001 - Cars ZFA1M001 - Fairs ZIN1M001 - Inv.orders Moulds ZIN2M001 - Inv.orders R&D equipment ZIN3M001 - Inv.orders Software projects ZPR1M001 - R&D projects ZPR2M001 - Sales projects ZPR3M001 - Management projects ZPR4M001 - Internat.projects (e.g.SAP proj.)

19 Master Data Groups M001 WagesSalariesF1F2F3 Domestic Abroad Personnel 6840 Trade Fairs CostElementsPLCostCenters TOPM TOPMInternalOrdersZFA Profitcenters

20 Planning and Planning Integration: Overview Introduction to Planning Planning in Cost Center Accounting using different Controlling methods Integrated Planning Cycle

21 Copy Plan and Actual Data Plan data Copy: Cost Centers Profitability Segments.. Plan 2005 Version 1 Actual data Actual 2004 Plan data Plan 2004 Version 1 Revaluation

22 Primary Cost Planning Cost Centers/Internal Orders Cost Center: Production Primary cost element Direct labor costs Indirect labor costs Wages/salaries Machines & equipment Machine rental Depreciation Fixed costs 300, , , ,000 50, ,000...

23 Cost Allocation Methods for Planning Overheads Distribution Assessment Cost center 1 Cost center 2 Cost center 3 Cost Center Costs

24 Pure Cost Allocations Cost center Order, project Proftblty seg. Cost center Simplest planning method Analysis: Plan/actual or actual/actual comparison

25 Assigning Planning Methods to Controlling Methods (1) Simple planning options for overhead cost controlling  Only cost planning  Cost allocation using distribution and assessment  Only possible to compare actual/actual costs and plan/actual costs

26 Integrated Corporate Planning SOPLTP Sales Activity input quantity Process Input quantity Activity price Process price Material Cost Estimate Profit Planning Sales Planning Strategic Procedure planned requirements Cost of goods manufactured / sold Cost center/ Activity type Template Bill of material Routing LIS

27 Transferring Planned Values for Cost Centers Personnel HR Logistics Information System (LIS) COST CENTER PLANNING Cost Center Assets AA Personnel Costs Depreciation/Interest Statistical Key Figures PP Production Planning Activity Requirements

28 Posting to CO from Other Modules: Content Postings from other modules Statistical and real postings

29 Posting Logic G/L Account (P&L) Amount Controlling Object Cost element (420000) CO Document # FI Document # G/L Account (Bal. Sheet) Amount FI Data Entry: Item G/L Account (P&L) - Amount - Controlling Object Item G/L Account (Bal. Sheet) - Amount

30 Commitments  Cost center 3105: Sales, vehicles CelemCommit.ActualAssigned Goods receipt Purchase order 1 2 Purchase requisition MMCO  Cost center 3105: Sales, vehicles CelemCommit.ActualAssigned (with account assignment object)

31 Transaction-Based Postings In CO: Contents Postings in Overhead Cost Controlling Postings in Cost Object Controlling Postings in Profitability and Sales Accounting Example Posting for Transfer Prices

32 Reposting Line Items FI Document no CO Kunde A Kunde B Kunde C CCtr ,000 10,000-10,000 CCtr ,000 10, ,000 Doc. no CCtr ,000

33 Period-End Postings in CO: Unit Contents Overhead Cost Controlling Cost Object Controlling Actual Costing/Material Ledger Profitability Analysis Schedule Manager Reconciliation Ledger

34 Periodic Activities in Overhead Cost Controlling Cost Centers Orders Cost allocations -Accruals (on CCtr only) - Periodic reposting -Distribution -Assessment -Overheads -Order settlement Sending Receivers Cost Centers Orders

35 Accrual Calculation: Percentage Method JanFebMarAprMayJunJulAugSepOctNovDec 20, , Wage costs Accrued vacation bonus (10% of wage costs) Accrual cost object (Cost center or order) Period Accrual costs and effective actual costs - 2, , , , Paid vacation bonus: 24,000 Rules for the periodic percentage method....

36 Distribution 30%20% 50% Production, Paints/ Solvents Production, Pumps Allocation Rule: Fixed Percentages Electricity January Cost Center: Electricity Cost Center: Electricity Production, Bulbs

37 Assessment Salary costs January Energy Maintenance Cafeteria , , ,000  9, ,000 Assessment (cafeteria) Allocation Rule: Statistical Key Figure (Employees) Employees 30 Employees 10 Employees Corporate Services Vehicles Marketing , , ,000

38 Overhead Rates Cost Object Costing sheet COGM Oil 1000 Overhead for storage barrel Warehouse Overhead Percentage20% Warehouse Cost Center Credit from overhead calculation-200

39 Order Settlement Orders Debits -Credits =Order balance Settlement Options: - By cost element or settlement cost element - Settlement rule to all cost elements or differentiated based on origin layout - Distribution: % / amount / equivalence number Possible Settlement Receivers Cost center Order project Proftblty segment G/L Account Asset Sales order with cost collector...

40 Example of Period-End Closing in CO-OM (1) Human Resources Investment Management Overhead rates Settlement of overhead cost orders Assessment Asset Accounting Accrual calculation Periodic reposting Distribution

41 Reporting Tools: Contents Overview of Reporting Report Writer Reports Drilldown Reporting ABAP List Viewer (ALV) Report Definition with the Report Painter

42 Reporting Tools of CO Reporting tools: Report Painter/Report Writer Drilldown reports ABAP List Viewer (ALV)

43 Report Painter/Report Writer ***** Cost Element/Cost Center Actual/Plan ***** - Cost Element/Cost Center Actual/Plan: Profitability Report Reporting period to Date 07/04/00 Cost Elements / Cost Centers Actual Costs Planned Costs Var. (abs.) **Other administration costs6,477, ,238, ,238, Energy112, , , *481000Depreciation 112, , , **Accrued costs 112, , , Goods receipt566, , , Warehouse, receipt849, , , Warehouse, issue1,414, , , Building admin.590, , , Warehouse building900, , , Production building1,340, , , *511111Assessment 2110Goods receipt1,277, , ,

44 Options in Report Writer Reports ** Debit ** Credit ** Overabsorption Print Export Graphics Call Report Internet Number Format Threshold Value Show/Hide Rows Sort Rows Summation Level

45 Drilldown Reporting Sales Report: Divisions Periods 1 - 7, 1999 Characteristics Division Cost of SalesRevenueCM1 01Auto 1,000, ,00020% 02Bicycle 250, ,00016% 03Parts 100,000 70,00030% Revenue - Divisions AutoBicyclesParts Revenue1,000,000 Cost of sales800,000 CM1200,000 CM1 %20% Sales & admin.50,000 Customer group Sales organization Material group

46 Options for Drilldown Reporting Graphics Print Currency Translation Microsoft Word Hierarchies Other Reports Microsoft Excel Customer Group Display Master Data Attributes Street, City, Country 01 Retail1,000, Wholesale 2,500, Investment1,500, Mail order1,000,000

47 Interactive Information System FI Document Debit Debit Rent 10,000 Credit Credit Bank 10,000- Account Actual Costs Plan CostsVar.(abs.) Var.(%) rent rent100,000100,000 CO Documents Rent 60,000 cost center Rent 30,000 cost center Rent 10,000 cost center

48 ABAP List Viewer Column set Column name Column selection Column name Cost center Quantity Cost element... Plant Unit... Costs Save as layout CElemCCtr Total qty entered Unit , , , , , ,500 5,500 3,125 35,001 77,747 10,000 82,030 h h h h h h h h h h h h Layout Layout name Default setting 1SAP Primary cost posting 3SAP Sec. costs: Val. alloc. 2SAP Secondary costs: Activity Layout: Name: /AC040 Activity allocation User-specific

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