Overview of Controlling: Unit Contents: General Tasks of Controlling The Components of CO Integration

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SAP AG
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Overview Of Controlling: Unit Contents
General Tasks of Controlling
The Components of CO
Integration
(C) SAP AG TACO40 12-1
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Overview Of Controlling: Unit Objetives
!"plain the #ifferenes between Internal an#
!"ternal $o%nting.
!"plain how CO helps manage a b%siness an#
%se some stan#ar# CO reports .
&ist the omponents of CO an# e"plain their
p%rpose.
!"plain the basi integration points between the
omponents of CO.
!"plain the basi integration points between CO
an# other R'( mo#%les.
$t the onl%sion of this U)IT* +o% will be
able to:
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Overview Of Controlling: ,%siness -enario
.o%r initial fo%s is to gain an %n#erstan#ing of the
p%rpose of CO* an# how /I an# CO work together to
provi#e both finanial an# management information.
.o% learn that CO has several #ifferent major
omponents* eah having a parti%lar p%rpose. .o%
also learn that these #ifferent omponents are
integrate# with eah other* as well as with other R'(
omponents.
In or#er to get some e"pos%re to the o%tp%t of CO*
+o% vol%nteer to assist in r%nning an# anal+0ing
some reports for the German s%bsi#iar+ of +o%r
ompan+. These reports fo%s on operating res%lts
for the CO !%rope ontrolling area. The+ ill%strate
integration between the General &e#ger 1/I2*2* Cost
Center $o%nting 1CO2* an# 3rofitabilit+ $nal+sis
1CO2 omponents.
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General Tasks of Controlling
!"plain the #ifferenes between Internal
an# !"ternal $o%nting within the R'(
-+stem.
!"plain some of the wa+s in whih
Controlling an help to manage a b%siness.
Use some stan#ar# CO reports to perform
a t+pial b%siness anal+sis.
$t the onl%sion of this TO3IC* +o% will be
able to:
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CO
/I
Internal $o%nting
Cost $o%nting
6anagerial $o%nting
6anagement $o%nting
7ifferent 8al%ations
/le"ibilit+
Tax
audit
!"ternal $o%nting
/inanial -tatements
&egal Re9%irements
-tan#ar#s
Controlling
/I an# CO: -tan#ar#s 8ers%s /le"ibilit+
All businesses have requirements to provide accounting information for users both external and
internal to the organization. External parties requiring accounting information would include
regulatory agencies, banks, and insurance companies. Accounting information of this type would
typically be prepared according to standards issued by a governing regulatory agency. This helps to
ensure that operating results are accounted for and reported so that the information is comparable
from one enterprise to the next.
There are also many varied information requirements for users inside the organization, including all
levels of management, marketing, finance accounting, sales, manufacturing, etc. Accounting
information of this type is frequently prepared in a format unique to the organization!s requirements
rather than according to any standard.
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Intro#%tion to the Controlling 6etho#
Cost alloation aor#ing to so%re of osts
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Overhea# Overhea# Cost Cost
Controlling Controlling
Cost Objet Cost Objet
3rofitabilit+ 3rofitabilit+
$nal+sis $nal+sis
3reliminar+
Costing
-im%ltaneo%s
Costing
/inal Cost.
Cal%lation of
$t%al Costs
of Goo#s
6an%fat%re#
-ales 3lanning
7rill; #own;
Reporting
Overhea# Cost
3lanning
$tivit+ prie
al%lation
$tivit+
alloation
; fi"e#
; variable
7istrib%tion
$ssessment
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The Components of CO
&ist the omponents of CO.
!"plain the basi p%rpose of eah of these
omponents.
able to:
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SAP AG
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The Components of Controlling
Cost an# Reven%e !lement
$o%nting
Overhea# Cost Controlling:
Cost Center Accounting
Overhe! Or!er Accounting
Activit"-#se! Costing
3ro#%t Cost Controlling:
Pro!uct Cost P$nning
Cost O%&ect Contro$$ing
Actu$ Costing' (teri$ )e!ger
3rofitabilit+ $nal+sis
3rofit Center $o%nting
The various "# components can be classified into different groups. The classification indicates the
general purpose of a given component.
$anagement of an enterprise requires the use of different tools for different situations. %f you want
to analyze profit, for example, then you need a tool appropriate to the view you wish to take &e.g.' by
product or by responsibility center(. The )rofitability Accounting component group has two tools
&components( that are available for addressing this business need.
*imilarly, the #verhead "ost "ontrolling and )roduct "ost "ontrolling component groups offer
tools appropriate to other types of business requirements.
(C) SAP AG TACO40 12-*
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Cost an# Reven%e !lement $o%nting
1CO;C!&2:
"ost and revenue element accounting provides the functionality
to define cost and revenue elements, which are used to plan and to post costs and revenues
of the reconciliation ledger, which can be used to reconcile "# with +%.
About these functionality you will see more in later units.
(C) SAP AG TACO40 12-+
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Cost @ Reven%e !lement $o%nting
Overhea# Cost Controlling Overhea# Cost Controlling
3ro#%t Cost
Controlling
3ro#%t Cost
Controlling
Cost Center $.
Overhea#
Or#er
$.
Cost
Objet
CO
3rofitabilit+
segments
$tivit+
,ase#
Costing
3rofitabilit+
$nal+sis
3rofitabilit+
$nal+sis
3rofit
Center
$o%nting
3rofit
Center
$o%nting
3rofit
Center $.
3rCtr 3rCtr ? ?
3rCtr 3rCtr ( (
3rCtr 2
3rCtr 3rCtr 4 4
3rCtr 3rCtr 5 5
Cost @ Reven%e
!lement
$o%nting
$nswers
the 9%estion:
Which costs
were incurred?
"ost and ,evenue Element Accounting &"#-#$-"E.( is part of the #verhead $anagement
component group. %t provides the structure for assignment of "# data through the classification of
transaction line items according to the nature of the cost or revenue being posted to a given
controlling ob/ect &e.g. cost center, internal order, etc.(.
The cost flows in "# can lead to the need for reconciliation between internal and external
accounting in certain cases. "ost and ,evenue Element Accounting is the "# component providing
functionality that supports this possible requirement.
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Cost Center $o%nting
A? A?
I7!- !%rope I7!- !%rope
A?0?0 A?0?0
Corporate
???0
!"e%tive
,oar#
A?000
A?000
German+ German+
A2000
A2000
UB UB
A2(00
A2(00
!spana !spana
A2?00
A2?00
3ort%gal 3ort%gal
A???0 A???0
!"e%tive
,oar#
A??20 A??20
Corporate
-ervies
?2(0
3ower
?220
6otor 3ool
?000
Corporate
-ervies
?2?0
Telephone
?200
Canteen
A?200 A?200
/inane @
$#ministration
2?00
/inane @
$#min.
A?2?0 A?2?0
$#min.
A?220 A?220
A%man
Reso%res
2200
A%man
Reso%res
A?2(0 A?2(0
3%rhasing
2(00
3%rhasing
A?(00 A?(00
-ales @
6arketing
A?400 A?400
Tehial
7epartment
The "ost "enter Accounting component &"#-#$-""A( tracks where costs occur in your
organization. The cost center is an organizational unit in a controlling area. "ost centers can be
defined according to several different design approaches. A typical approach could be for an
enterprise to define a cost center for each low-level organizational unit that has responsibility for
managing costs. As costs are incurred, they are assigned or posted to the appropriate cost center.
These costs could include payroll costs, rent and utility costs, or any other costs assignable to a
given cost center.
The posting and assignment of costs to cost centers not only makes managerial accounting possible0
but is a vital step for utilizing the other "ontrolling components. As noted above, cost centers can be
set up according to different design approaches, including' functional requirements, allocation
criteria, activities or services provided, geographic location and1or area of responsibility. 2ut
whichever approach is selected, it should be consistent throughout the enterprise.
"ost centers can be grouped together to provide summary cost information. %n fact, a fundamental
requirement for implementing "ost "enter Accounting is the creation of a standard hierarchy for a
controlling area. This reflects the overall structure of all cost centers in that controlling area, and
provides pre-defined summary costs at each node of the structure. This will be described in greater
detail in the next 3nit.
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Internal Or#ers
Internal Or#ers
$r%al
or#ers
Cost $o%nting /%ntions Cost $o%nting /%ntions
Or#ers with
reven%es
Overhea#
or#ers
Investment
or#ers
An Internal Order is an extremely flexible "# tool that can be used for a wide variety of purposes
to track costs and, in some cases revenues, within a controlling area. %nternal orders provide
capabilities for planning, monitoring, and allocation of costs.
%nternal orders may be used for a variety of purposes, and can be grouped into four general
categories'
Overhead orders' 3sed to monitor overhead costs incurred for a particular purpose, such as
conducting a trade fair, or tracking costs for maintenance and repair work.
Investment orders' 3sed to monitor costs incurred in the production of a fixed asset, such as
building a storage facility.
Accrual orders' 3sed to offset postings of accrued costs &costs calculated in "#( to cost centers.
Orders with revenue' 3sed to replace the cost accounting parts of *4 customer orders if *4 is
not being used, so that both costs and revenues can be tracked0 or to monitor revenues not
affecting the organization!s core business &such as miscellaneous revenues(.
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CO CO; ;O6 O6; ;
$,C $,C
$,C $,C
3ro#%ts
3ro#%t /amilies
C%stomers
7istrib%tion Channels
...
3roesses 3roesses 3roesses
-$3Cs Comprehensive $pproah to $,C
*A)!s comprehensive approach to Activity 2ased "osting includes the following "# components'
"#-#$-A2", "#-)", and "#-)A.
%n "#-#$-A2", you can define the processes that pull overhead resources from different parts in
the organization. 2y using the appropriate drivers, the corresponding process quantities and costs are
charged to products by using the "#-)" component, or directly to the profitability segments defined
in the "#-)A component.
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6o#el of $tivit+;,ase# Costing in R'(
Processes
I#entif+ b%siness proesses
that ons%me signifiant
overhea# reso%res
$ssign osts to proesses
thro%gh reso%re #rivers
I#entif+ non;val%e;a##e#
ativities
3rovi#e realisti pro#%t
osts inl%#ing proess
ons%mption b+ pro#%t
Cost Centers
1Reso%res2
3ro#%ts*
C%stomers*
Channels* et.
3roesses
Financial Accounting Financial Accounting
Cost
7river
Reso%re
7river
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3ro#%t Cost Controlling 1CO;3C2:
3ro#%t Cost 3lanning 13C32
Cost Objet Controlling 1O,D2
$t%al Costing ' 6aterial &e#ger 1$CT2
Product Cost Controlling is concerned with all aspects of planning the cost of producing products
or services, as well as tracking and analyzing the actual costs that are incurred in the production
process. )roduct "ost "ontrolling consists of the following components'
Product Cost Planning is used for preliminary costing and can answer the following questions'
5hat will the production of a certain product or service cost6
%s external procurement less expensive than on site production6
5hich production method will perform with the lowest costs6
5hich are the costs of production, if we assume an optimal situation6 This can be the base with
which we can compare other production situations.
Cost Object Controlling focuses on simultaneous costing and the period end closing.
*imultaneous costing will give you the information to do a comparison between the planned costs
and the actual cost of a certain production phase.
)eriod end closing will calculate the value of goods still in the production process &work in
process(, will calculate the variances between the cost estimate and the actual costs and will settle
them to other modules like "#-)A, E"-)"A and +%.
Actual Costing / Material Ledger is used to provide actual costs for each material at the end of the
period. $aterials and their movements are valued with a standard price during the period. Any
variances with respect to this standard are collected in the material ledger when invoices are
received or orders settled. 4uring period closing these variances are used to calculate an actual price
for the material in the closed period. )ostings can be made in +% to take account of this price.
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3ro#%t Cost Controlling ; Overview
,O6 Ro%ting Ro%ting
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F%antit+ -tr%t%re
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E E
E E E
8al%e -tr%t%re
3ries
; for materials
; for ativit+ t+pes
; for proesses
Overhea#
Cost !stimate:
-tan#ar# osts
3ro#%t Cost 3lanning
Cost Objet Controlling
3lanne#
osts*
at%al osts
-im%ltaneo%s Costing
Or#er
,ntern$
(teri$
-.tern$
Overhe!
Total
/
/
/
/
E
Gork in proess
-rap
8arianes
-ettlement
/inal Costing
3erio# Close
F%antit+ -tr%t%re
6aterial movements
8al%e -tr%t%re
6aterial settlement:
$t%al osts
$t%al Costing
3roess 3roess
6aterial movements
6aterial 6aterial
le#ger le#ger
Product Cost Planning is used to plan product costs. The cost estimate uses a quantity structure,
which can either be derived from the logistics components of the ,17 system or entered manually.
8ou determine in "ustomizing which values are to be used to value this structure to create the cost
estimate. The result may be transferred to the material master as a standard price.
Cost Object Controlling is used to track the costs posted to cost ob/ects. There are a number of
different types of cost ob/ects available to use, depending on your controlling requirements. These
include sales orders, production orders, process orders, and production cost collectors. "ost ob/ect
controlling is used to calculate work in process, scrap costs, and variances at period close.
Actual Costing is used to calculate actual product costs at period close. The result may be
transferred to the material master as a weighted average price for the closed period. %n ,elease 9.:
the quantity structure will be derived dynamically using the materials movements in the ,17 system.
The values connected with these movements are collected in the $aterial .edger. *ingle-level
settlement functions to calculate the actual material costs at period close are available in ,elease
9.;A. $ulti-level settlement functions will be available in ,elease 9.:.
#ur focus will now be Cost Object Controlling, and the different "# and )) scenarios that are
supported by the cost ob/ect controlling component. 5e will review a variety of different cost
ob/ects that are available from the "#-)" environment. #ur ob/ective is to realize that regardless of
the logistic scenario, there is no difference from the point of view of controlling.
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Cost Objet Controlling
Goo#s Iss%es
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6aterial ?
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Gareho%se Gareho%se
Cost objet
3lan osts $t%al osts
CO CO
!"ternal
ativities
Invoies
I)8OIC!
Cost enter 4<?2
$tivit+ /!3 ?5 min
Confirmations' ativit+ allo.
There are several different types of cost ob/ects that can be used in "ost #b/ect "ontrolling. These
include production orders, production cost collectors, cost ob/ect hierarchies, etc. 8ou must choose
a cost ob/ect that is appropriate to your production scenario. The different types of cost ob/ects will
be discussed in greater detail in the next 3nit.
5hen the cost ob/ect is created, a preliminary cost estimate may be carried out &depends on cost
ob/ect and customizing( to calculate the planned costs for the cost ob/ect.
Actual costs are incurred when materials from stock or activity types of cost centers are consumed.
)rimary costs can be posted directly from legacy modules to the production order. This means you
can call up the data of simultaneous costing at any time.
5hen you deliver the produced goods to stock, the cost ob/ect is credited with the value of the
delivered quantity and the goods are capitalized on the stock. 4epending on the price control, this
may result in revaluation of the product stock.
After finishing the production process or at the end of the period the production order will be settled
to stock or price difference account.
%n dependency on scenario and cost ob/ect, a billing could take place incurring revenues to the cost
ob/ect.
After finishing the production process or at the end of the period the cost ob/ect will be settled.
Additional period-end closing activities may be performed such as
calculation of overhead
results analysis &5%) calculation(
calculation of variances
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$t%al Costing
F%antit+ -tr%t%re 8al%e -tr%t%re
6aterial settlement 6aterial settlement
3roess 3roess
6aterial movements
6aterial 6aterial
le#ger le#ger
Cal%lates at%al osts
Creates losing entries
Actual "osting uses the $aterial .edger to store material prices in up to three currencies and
according to three valuation strategies &group, legal and profit center(.
Actual "osting aims to provide the actual costs for each material at period close. Each material
movement is recorded in the $aterial .edger together with the preliminary valuation and any
variance &from invoice or order settlement(. $aterial settlement is used to integrate this variance in
the material price at period close.
%n ,elease 9.;A single-level material settlement is available. %n ,elease 9.: multi-level settlement
will be used to reconstruct the quantity structure based on the material movements for the period and
assign variances for the raw materials to the finished and semi-finished products as follow-up costs.
The actual price for each material can be updated to the material master for the closed period.
(C) SAP AG TACO40 12-1*
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3rofitabilit+ $o%nting:
3rofitabilit+ $nal+sis 1CO;3$2
3rofit Center $o%nting 1!C;3C$2
(C) SAP AG TACO40 12-1+
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3rofitabilit+ $nal+sis ; $n !"ternal 8iew
Compan+ 6arket
,illing 7o%ment
-7
3rofitabilit+ $nal+sis
CO;3$
Be+ -ales /ig%res:
Reven%es* Cost of -ales...
6arket -egments:
C%stomer* 3ro#%t*
3ro#%t Gro%p*
7istrib%tion Channel
CO CO; ;
3$ 3$
-7 -7
The goal of CO-PA is to determine the profitability of market segments
)rofitability Analysis &"#-)A( enables you to analyze profits and contribution margins for market
segments of your company. The ob/ective of "#-)A is to support sales, product management, and
corporate-wide planning and decision-making, using an external view from a market-oriented
perspective.
The market segments are defined in terms of characteristics such as products, product groups,
customers, customer groups, geographic areas, etc. +or example, you may wish to analyze
profitability for a specific group of products that you sell to a particular customer &or group of
customers(. 5hen setting up "#-)A for use in your company, you will have broad flexibility to
choose whichever characteristics are relevant for defining your company!s market segments. Each
unique combination of characteristic values &e.g. sales of product A to customer 8( defines a
proitability segment.
8ou must also decide which specific values related to profitability should be analyzed for those
segments. These values are known as !ey igures. +or example, you can define which types of
revenue and expense1cost categories should be used to determine a value for gross margin according
to your company!s requirements. <ere again, "#-)A gives you the ability to freely select whichever
values are relevant to the various users in your company. %f different types of users define gross
margin differently &e.g. sales management vs. product management(, it is possible to provide
separate gross margin figures for each, calculated according to their individual requirements.
"#-)A provides a multidimensional reporting tool that can be used to design reports that analyze
data for any selected market segments, and any defined measures of profitability.
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%stomer
region
sales
#ivision
pro#%t
6arket 6arket
Compan+ Compan+
0hich re the $rgest n! 1stest gro2ing
custo3ers4
5o2 hve s$es n! contri%ution 3rgins
chnge! in the $st 6erio! 1or ech 6ro!uct4
0ht re 3" 2orst n! %est 6er1or3ing
s$es orgni7tions in !i11erent regions 4
,illing
#o%ments
T+pial F%estions in 3rofitabilit+ $nal+sis
The best way to illustrate the purpose of )rofitability Accounting in the ,17 system is to think about
some of the typical questions which can be answered.
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3rofit Center $o%nting ; $n Internal 8iew
The goal of !C-PCA is to measure the profitability of
areas of responsibility within the organi"ation#
SAP AG
Compan+ Compan+
3rCtr ? 3rCtr ?
3rCtr ( 3rCtr (
3rCtr 2
3rCtr 4 3rCtr 4
3rCtr 5 3rCtr 5
goo#s'servies goo#s'servies
!C !C; ;
3C$ 3C$
,illing 7o%ment
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6 66
Co36n"
6 66
Co36n"
A profit center is a management-oriented organizational unit used for internal controlling purposes.
4ividing your company up into profit centers allows you to analyze areas of responsibility and to
delegate responsibility to decentralized units, thus treating them as =companies within the company=.
E"-)"A lets you set up your profit centers according to product &product lines, divisions(,
geographical factors &regions, offices or production sites( or function &production, sales(.
)rofit "enter Accounting &)"A( allows you to calculate internal measurements of profitability. This
internal view of profitability, then, reflects the success of a given profit center at meeting the
profitability goal for which it was given responsibility.
The %nformation *ystem provides a tool for evaluating plan and actual data. >umerous standard
reports are provided, and you can create your own custom reports as well. ,eports can be executed
for )rofit "enters or )rofit "enter groups. )rofit "enter Accounting can report on selected balance
sheet items, such as Assets, A,1A), $aterial %nventory, and 5ork in )rocess. This permits the
calculation of certain financial key ratios such as ,#% &,eturn on %nvestment(. #ther reporting
capabilities include detailed information on the source ob/ects &e.g. cost centers, internal orders( that
contributed costs posted to profit centers.
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$nal+sis with 3rofit Centers
$rea 2
$rea ?
Cost Center
&ine &ine
items items
3rofit 3rofit
Center 2 Center 2
3rofit Center 3rofit Center
Overhea#
Or#ers
Cost Center
Gro%p
3rofit 3rofit
Center Center
3rofit 3rofit
Center ? Center ?
In#ivi#%al Controlling Objets
The sales and complete value added of an area are set against the costs of this period in the profit
center so that profit becomes visible. Evaluations are possible on the profit center level, profit center
sub-divisional area level, and through a breakdown of profit center data from the source "ontrolling
ob/ects allocated to the profit center. %n this way, cost structures can be traced back to their origins
and evaluated.
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7isting%ishing /eat%res of CO;3$ an# !C;3C$
Profitability Analysis
CO-PA
$arket
Profitability
$ims of
3rofitabilit+
$o%nting
6etho#s
Objets to be
anal+0e#
Comparison
Profit Center
Accounting
!C-PCA
Cost-of-%ales
Accounting
Profitability
%egments
!nterprise
Controlling
Cost Of %ales &
Period
Accounting
Profit
Centers
Reporting
$ulti-dimensional
'eporting
(ist-oriented
reporting
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Integration
!"plain the basi integration points
between the omponents of CO.
!"plain the basi integration points
between CO an# other R'( mo#%les.
R%n a simple in9%ir+ in the s+stem on an /I
#o%ment an# an+ assoiate# CO
#o%ment1s2.
able to:
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Integration Githin CO ; 8al%e /lows 1?2
Overhea# Cost
Controlling
3rofit
Center
3rCtr 3rCtr ? ?
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$o%nting
There can be numerous interrelationships between the various "# components. ?alue flows can
occur for many different purposes.
5ithin the #verhead "ost "ontrolling area, costs can be posted to cost centers and internal orders
from other ,17 modules &external costs(. "ost centers can then allocate costs to other cost centers, to
orders, and to processes in Activity 2ased "osting &A2"(. A2", in turn, can pass costs to cost
centers and orders. %nternal orders can settle costs to cost centers and to processes in A2" &as well
as to other orders(.
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Integration Githin CO ; 8al%e /lows 122
Overhea# Cost Overhea# Cost
3ro#%t Cost 3ro#%t Cost
3rofit
Center
3rCtr 3rCtr ? ?
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e

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l
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t

$
o
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C
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@

R
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e

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l
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$
o
%
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i
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Cost Center $.
$tivit+
,ase#
Costing
Cost
Objet
CO
Overhea#
Or#er $.
$o%nting $o%nting
There are also key cost flows that can occur between the #verhead $anagement and )roduct "ost
"ontrolling components. "ost ob/ects &such as production orders, etc.( can receive direct cost
postings from +% &such as when an invoice receipt is assigned to the cost ob/ect(0 costs from cost
centers &as production activities are performed, or from overhead allocation(0 costs settled from
internal orders0 and costs allocated from processes in A2".
0.2=
SAP AG
R
Integration Githin CO ; 8al%e /lows 1(2
Overhea# Cost Overhea# Cost
3ro#%t Cost 3ro#%t Cost
3rofit
Center
3rCtr 3rCtr ? ?
3rCtr 3rCtr ( (
3rCtr 2
3rCtr 3rCtr 4 4
3rCtr 3rCtr 5 5
3rofitabilit+ 3rofitabilit+
$nal+sis $nal+sis
C
o
s
t

@

R
e
v
e
n
%
e

!
l
e
m
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n
t

$
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t
i
n
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C
o
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t

@

R
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%
e

!
l
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m
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n
t

$
o
%
n
t
i
n
g
3rofitabilit+
segments
Cost Center $.
$tivit+
,ase#
Costing
Cost
Objet
CO
Overhea#
Or#er $.
$o%nting $o%nting
There are also key cost flows that can occur between the #verhead $anagement and )roduct "ost
"ontrolling components. "ost ob/ects &such as production orders, etc.( can receive direct cost
postings from +% &such as when an invoice receipt is assigned to the cost ob/ect(0 costs from cost
centers &as production activities are performed, or from overhead allocation(0 costs settled from
internal orders0 and costs allocated from processes in A2".
)rofitability Accounting components also are tightly integrated with #verhead $anagement and
)roduct "ost "ontrolling. )rofit "enter Accounting, by virtue of its basic design, receives statistical
cost postings from virtually all other "# components.
%n addition to direct postings from +%, )rofitability Analysis can receive cost assessments from cost
centers and A2" processes, settlements of cost from internal orders, and production variances
settled from cost ob/ects.
(C) SAP AG TACO40 12-2*
0.2>
SAP AG
R
Integration Gith Other 6o#%les 1?2
3ro#%t Cost
Controlling
3ro#%t Cost
Controlling
Cost Center $.
Overhea#
Or#er
$o%nting
Cost
Objet
CO
3rofitabilit+
segments
$tivit+
,ase#
Costing
3rofitabilit+
$nal+sis
3rofitabilit+
$nal+sis
/I $$
/I
/I
3rofit
Center
$.
3rofit
Center
$.
3rofit
Center
3rCtr 3rCtr ? ?
3rCtr 3rCtr ( (
3rCtr 2
3rCtr 3rCtr 4 4
3rCtr 3rCtr 5 5
C
o
s
t

@

R
e
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l
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t

$
o
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C
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@

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e

!
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$
o
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t
i
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g
#ther ,17 modules generate data that has a direct impact on "#. +or example, when non-stock
consumable items are purchased, an expense is posted to the @.. At the same time, the expense is
posted as a cost to the cost center &or other ob/ect in "#( for which the items have been purchased.
That cost center!s costs may later be passed on as overhead to a production cost center, or elsewhere
in "#.
The +inancial Accounting application area of ,17 is a primary source of data for "ontrolling.
Typically, most expense postings to the @eneral .edger would result in a cost posting to "#. These
expense postings to the @1. could be manual /ournal entries, or initiated through accounts payable
postings, or through depreciation postings from Asset Accounting &+%-AA(.
,evenue postings could also be created by a /ournal entry to the @1., and would also typically
generate postings in "# to "#-)A and )rofit "enter Accounting.
2oth expense and revenue postings from +% must specify one &or more( ob/ect in "# that will
receive the cost or revenue data.
There are also several situations that will cause "# to create postings in +%. These would include
reconciliation postings initiated by the reconciliation ledger in "#, inventory postings caused by the
delivery of finished goods from production, and settlement of capital costs from the creation of fixed
assets.
(C) SAP AG TACO40 12-2+
0.(0
SAP AG
R
Integration Gith Other 6o#%les 122
3ro#%t Cost
Controlling
3ro#%t Cost
Controlling
Cost Center $.
Overhea#
Or#er
$o%nting
Cost
Objet
CO
3rofitabilit+
segments
$tivit+
,ase#
Costing
3rofitabilit+
$nal+sis
3rofitabilit+
$nal+sis
AR
AR
3rofit
Center
$.
3rofit
Center
$.
3rofit
Center
3rCtr 3rCtr ? ?
3rCtr 3rCtr ( (
3rCtr 2
3rCtr 3rCtr 4 4
3rCtr 3rCtr 5 5
C
o
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t

@

R
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C
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@

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n
t

$
o
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i
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g
The <uman ,esources &<,( modules can generate several types of cost postings to "ontrolling.
The <, system allows you to allocate the cost of work to different "ontrolling &"#( ob/ects. %n
addition, planned personnel costs can be transferred to "# as input to "# planning.
0.(?
SAP AG
R
Integration Gith Other 6o#%les 1(2
3ro#%t Cost
Controlling
3ro#%t Cost
Controlling
Cost Center $.
Overhea#
Or#er
$o%nting
Cost
Objet
CO
3rofitabilit+
segments
$tivit+
,ase#
Costing
3rofitabilit+
$nal+sis
3rofitabilit+
$nal+sis
66
66
3rofit
Center
$.
3rofit
Center
$.
3rofit
Center
3rCtr 3rCtr ? ?
3rCtr 3rCtr ( (
3rCtr 2
3rCtr 3rCtr 4 4
3rCtr 3rCtr 5 5
C
o
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t

@

R
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$
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C
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e

!
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$
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The .ogistics area of ,17 also has numerous integration points with "ontrolling. %n the inventory
area of $aterials $anagement, a goods issue transaction can create a cost posting in "# to
whichever ob/ect is specified &e.g. cost center, production order, internal order(. .ooking from the
other direction, "# can cause a posting to inventory &in $$( resulting from the delivery of finished
goods from production. %n addition, product cost estimates created in "# can update price fields in
material master records. +inally, the creation of purchase orders in $$ can generate commitment
postings within "#.
0.(2
SAP AG
R
Integration Gith Other 6o#%les 142
3ro#%t Cost
Controlling
3ro#%t Cost
Controlling
Cost Center $.
Overhea#
Or#er
$o%nting
Cost
Objet
CO
3rofitabilit+
segments
$tivit+
,ase#
Costing
3rofitabilit+
$nal+sis
3rofitabilit+
$nal+sis
33
-7
-7
-7
33
33
3rofit
Center
$.
3rofit
Center
$.
3rofit
Center
3rCtr 3rCtr ? ?
3rCtr 3rCtr ( (
3rCtr 2
3rCtr 3rCtr 4 4
3rCtr 3rCtr 5 5
C
o
s
t

@

R
e
v
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!
l
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t

$
o
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C
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@

R
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!
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n
t

$
o
%
n
t
i
n
g
The )roduction )lanning &))( area of .ogistics also works very closely with "ontrolling. 2ills of
$aterials and routings, which are created in )), can be utilized in )roduct "ost Accounting in "#.
%n addition, )) production orders are one form of cost ob/ect utilized to track and control production
costs in "ost #b/ect "ontrolling.
*ales and 4istribution &*4( is a primary source of revenue postings to "# via billing documents.
An *4 sales order can also be used in con/unction with the make-to-order production scenario in
"#, in order to track costs and revenues and evaluate the profitability of the arrangement.
0.((
SAP AG
R
Integration Gith Other 6o#%les ; -%mmar+
3ro#%t Cost
Controlling
3ro#%t Cost
Controlling
Cost Center $.
Overhea#
Or#er
$o%nting
Cost
Objet
CO
3rofitabilit+
segments
$tivit+
,ase#
Costing
3rofitabilit+
$nal+sis
3rofitabilit+
$nal+sis
/I $$
/I 66 33
AR
AR
/I -7
-7
-7
66
33
33
3rofit
Center
$.
3rofit
Center
$.
3rofit
Center
3rCtr 3rCtr ? ?
3rCtr 3rCtr ( (
3rCtr 2
3rCtr 3rCtr 4 4
3rCtr 3rCtr 5 5
C
o
s
t

@

R
e
v
e
n
%
e

!
l
e
m
e
n
t

$
o
%
n
t
i
n
g
C
o
s
t

@

R
e
v
e
n
%
e

!
l
e
m
e
n
t

$
o
%
n
t
i
n
g
#ther ,17 modules generate data that has a direct impact on "#. +or example, when non-stock
consumable items are purchased, an expense is posted to the @.. At the same time, the expense is
posted as a cost to the cost center &or other ob/ect in "#( for which the items have been purchased.
That cost center!s costs may later be passed on as overhead to a production cost center, or elsewhere
in "#.
The +inancial Accounting application area of ,17 is a primary source of data for "ontrolling.
Typically, most expense postings to the @eneral .edger would result in a cost posting to "#. These
expense postings to the @1. could be manual /ournal entries, or initiated through accounts payable
postings, or through depreciation postings from Asset Accounting &+%-AA(.,evenue postings could
also be created by a /ournal entry to the @1., and would also typically generate postings in "# to
"#-)A and )rofit "enter Accounting.
The <uman ,esources &<,( modules can generate several types of cost postings to "ontrolling.
The <, system allows you to allocate the cost of work to different "ontrolling &"#( ob/ects. %n
addition, planned personnel costs can be transferred to "# as input to "# planning.
The .ogistics area of ,17 also has numerous integration points with "ontrolling e.g. when doing a
goods issue to a controlling ob/ect or a goods receipt from production.
The )roduction )lanning &))( and the *ales and 4istribution &*4( area of .ogistics also work very
closely with "ontrolling. "onsumption of activities, cost of goods issues, overhead surcharges,
process allocations and direct primary costs can be posted to the cost ob/ect &e.g. ))-production
order, sales order item( and by doing the period closing data like 5%), variances and price
differences are settled to "#-)A, "#-)"A and +%. The billing document can incur revenues directly
to "#-)A or to the sales order, if the sales order item is a cost ob/ect.
0.(4
SAP AG
R
Overview Of Controlling: Unit -%mmar+
!"plain the #ifferenes between Internal an#
!"ternal $o%nting.
!"plain how CO helps manage a b%siness an#
%se some stan#ar# CO reports .
&ist the omponents of CO an# e"plain their
p%rpose.
!"plain the basi integration points between the
omponents of CO.
!"plain the basi integration points between CO
an# other R'( mo#%les.
Aaving omplete# this U)IT* +o% sho%l# now
be able to:

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