Controlling

Controlling (CO)
Controlling is used for internal reporting

Controlling Area is the highest hierarchy.
Areas to be covered:
1. Cost element Accounting

2. Cost centre accounting
3. Internal orders
4. Profit centre accounting
5. Product costing
6. Profitability analysis
1. Cost element Accounting: To update controlling records you have to create cost
elements
Cost elements are:
a. Primary cost elements
b. Secondary cost elements
2. Cost centre Accounts: To view department wise cost
3. Internal orders: To view costs for a specific tasks
4. Profit Centre Accounting: To view profitability, product wise, product group wise
(or) location wise if business area is not activated in FI
5. Product Costing: valuation of inventories like finished goods and work in process.
6. Profitability analysis: To view profitability for number of parameters at a time like

Customer wise, product wise, sales organization wise, plant wise, sale order wise
This is called data cube

It is a reporting tool
Basic settings for controlling:
FI organization structure Co. organization structure
Company Controlling
↓
Company code
↓
Business Areas Cost centre
1
Scenario – 1
Company
↓
Company code = Controlling Area
↓ ↓
Business Area  Cost Centre
Controlling area at company code level, cost element is assigned to Business

Area.
Scenario – 2
Company = Controlling area

↓
Company code
↓
Business Area  Cost Centre
(Controlling area at company level)
Scenario (2) is more flexible, because in this scenario when we want to view number of
cost centers data for different company codes, we have to go for 2nd scenario.
Also we want view No. of cost centers data for a particular company code we get
in 2nd scenario by creating cost center group.
Maintain controlling area:
Path: SPRO  Controlling  General controlling  Organization  Maintain

controlling area
Double click on maintain controlling area (T. Code OKKP)
Select new entries button
Controlling area:
1st scenario: company code: AML

2nd scenario: Any no. (Or) name (Max 4)
Give controlling area: AML
Name: Controlling area for AML
Company code  Controlling Area: select controlling area same as company code
2
Currency type: select 10 (company code currency)
Once we select 10, your currency field, chart of accounts field, fiscal year variant field
updated automatically
Cost centre standard hierarchy: AMLHIER (AML Hierarchy)
Select save button (or) (ctrl + s)
Select ‘yes’ button for the message, system to create as a standard hierarchy
Select create request button
Short description: Co. Customization for AML
Press enter
Press enter once again to saving the request
Double click on Activate components/control indicators folder
Fiscal year: 2006
For the field cost centre: select component active
Select activate type check box
Order management: select component active
Select profit center check box

Ignore the message, press enter
Double click on assignment of company codes folder
Select the company code: AML
3
Maintain Number ranges for controlling documents
Same path: (T. Code KANK)
1. Co. documents through posting from FI document: Controlling through posting of

accounts in FI Module i.e. called COIN
In FI you have to give the details like
↓
SA Co: Automatically generated number range intervals
↓
‘O’
↓
1 – 100000
2. Report Co. line items (RKU3)

Posting through FI document
Ex: Wages Dr Dept A 100000

Wages Dr Dept B 200000 (COIN)
Wages Dr Dept C 300000
To Bank 600000
2) Wages A/C Dr 600000

To Bank 600000
At the time of posting which department we are posting is don’t know
After Posting (repost to CO items) (RKU3)
We transfer 600000 to various cost centers (or) dept.
600000: 1) Dept A 100000

2) Dept B 200000
3) Dept C 300000
(Transfer line item wise/document wise)
Here 1 FI document and 2 CO. documents are generated
3. Repost costs (RKU1): Incase split the department (or) wrong cost centre postings.
Example: Dept A Dept Z
Salaries
April 100000  20000
May 200000  50000 (Repost to cost line items)
June 200000
July 200000
August 100000
Wages: 200000
------------
Total 1000000
4
Here 200000 Salaries & Wages belongs to dept Z & 800000 belongs to dept A
How we shown the total transaction amount transferred to department wise
Here NO FI documents
Only Co. document
Dept A Dept B
Salaries A/C
1 100000 20000
2 200000 50000 (Repost cost line items
3 300000
4 50000
5 150000
---------- --------
Total 800000 70000 (Repost Cost)
4) Planning Primary Costs (RKP1) (Budgeting)
Maintain Number Ranges for controlling document (same path)
(Transaction Code KANK)
Give the controlling area: AML
Select Maintain group’s button
From the Menu select group  Insert
Text: Co. document No. range intervals for AML
From No: 1 to 100000
Enter
Double click on COIN (Co. through postings from FI)
Double click on RKU3 (Repost Co. line items)
Double click on RKU1 (Reposts costs)
Double click on RKP1 (Planning Primary cost)

Select Co. document no. range intervals for AML check box
From the menu select edit  Assign element group
Save (or) (ctrl + s)
5
Maintain versions:
(Versions are nothing but budgets)
- Planning for whole year (original Budget) – 0
- Revised Budget – 1
- Re revised Budget – 2
Here actual are compared with original/revised (or) re revised budgets
Path: Same Path
Select version ‘0’
Double click on settings for each fiscal year
Give your controlling area: AML
Enter
Once the planning is complete select version locked check box so that no one change
planned figures
Save
Cost element Accounting:
To update Co. records we require cost elements
Cost elements are 2 types

1. Primary cost elements
2. Secondary cost element
1. Primary cost elements: These are nothing but G/L expenditure/ revenue
Account.
Posting to primary cost elements are possible.
2. Secondary cost elements:
- Other than your G/L Account

- Postings are not possible
- Support for allocation/settlement in Co.
6
Cost element categories:
Primary cost element categories:
1. Primary costs/cost – reducing revenues – used for expenditure account
3. Accrual/deferral per surcharge  used for Month end provisions in co
11. Revenues – used for sales and other income accounts
12. Sales deductions – used for expenditure like trade discount/sales conversion etc.
22. External settlement: Allocation from Co to G/L (or) Assets.
Secondary cost element categories:
21. Internal settlement – Allocation from Co to Co
31. Order/project results analysis (used for work in process calculation in product
costing)
41. Over head rates  used for raw material over head/production overhead
calculation in product costing.
42. Assessment  used for allocation of service department cost to production

departments.
43. Internal activity allocation (This is used for calculation of activity like machine
hour rate/labor rate in product costing.
7
Cost Centre Accounting
This is used to view department wise costs.
a) Creation of primary cost element
May created in – FI Area

- Co Area
- Automatic creation of cost element
b) Creation of field status group making cost center mandatory.
c) Assign new field status group in G/L expenditure accounts.
d) Creation of cost centers
e) Creation of cost centre groups
f) Creation of cost element groups
g) Posting of transaction is FI
h) To view cost center wise report
a) Creation of primary cost element at FI Area:
Use the transaction code: FS00
Select your G/L Account No: 400001
Company code: AML
Enter
Select edit cost element button
Give valid from 01.04.2006 to date 31.12.9999
Enter
Cost element category: select 1 (Primary cost/cost reducing revenues)
Save
Creation of primary cost element at Co. area: (T. Code FS00)
Path: Accounting  Controlling  Cost element accounting  Master data  cost

element  Individual processing  create primary (T. Code KA01)
Cost element – 400100
Valid from 01.04.2006 to 31.12.9999
Enter
Co. element category – 1
Save
8
Automatic creation of primary cost element
There are 3 steps in this area
1st step  make default settings.
SPRO  Controlling  cost element accounting  master data  cost element 

automatic creation of primary and secondary cost elements  make default setting
(T. Code OKB2)
Chart of Accounts  AML
Enter
Accounts from: 400101 to 499999
Save & save in your request
Create batch input session:
SPRO  Controlling  cost element accounting  Master data  Cost element 

Automatic creation of primary and secondary cost elements  make default setting
Create batch input session (T. Code OKB3)
Controlling area: AML
Valid from: 01.04.2006 valid to 31.12.9999
Session name: AML
Batch input user: sap user
Execute (F8)
Execute batch input session:
Path: SPRO  Controlling  Cost element accounting  Master data  cost element
 Automatic creation of primary and secondary cost element  Execute batch input
sessions (T. Code SM35)
Select the session name: AML

Select process button
Select display errors only radio button
Select process button
You get message processing of batch Input sessions completed
Select exit batch input button (F12)
9
To view the cost elements created
Path: Accounting  Controlling  Cost element accounting  Master data  cost

element  Individual processing  Display (T. Code KA03)
Select the drop down button beside cost element
Give the controlling area: AML, enter
Creation of field status group making cost centre mandatory:
Path: (T. Code: OBC4)
Select field status variant: AML
Double click on field status group folder
Double click on G004
Double click on general data
Text make it required entry field
Select next group button
Cost centre make it required entry field
Save in your request
Assign new field status group G/L expenditure:

`
G/L account: 400100 (Salaries)
Company code: AML
From menu  G/L Account  Change
Select create/bank/interest tab
Field status group: G004
Save
10
G/L Account: 400300 (Rent A/C)
Company code: AML
From menu  G/L Account  change
Save
Creation of cost centre:
Path: Accounting  Controlling  Cost centre accounting  Master data  Cost

centre  Individual processing  Create (T. Code KS01)
Cost centre: Dept A
Valid from: 01.04.2006 to 31.12.9999
Enter
Name: Dept A
Depart Cost centre: Department A
Person responsible: A
Cost centre category: 1 (Production)
Hierarchy area: AMLHIER
Business area: AMH
Currency: INR
Save (or) (Ctrl + s)
Ignore the warning message, press enter
11
Cost centre: Dept B
Valid from: 01.04.2006 to 31.12.9999
Reference cost centre: Dept A
Enter
Name: Department B
Description: Cost centre department B
Basic data
Person responsible: B
Cost centre: Dept C
Valid from: 01.04.2006 to 31.12.9999
Enter
Name: Department C
Description: Cost centre department C
Basic data
Person responsible: C
Save (or) (ctrl +s)
12
Creation of Cost centre group:
Path: Accounting  controlling  Cost centre Accounting  Master data  Cost

centre group  Create (T. Code KSH1)
Cost centre group: AMLProdu
Enter
AMLProdu – Production department for Co. area AML
Select insert cost centre button (Shift + F4)
Give the cost centre: Dept A, Dept B
Save
Creation of cost element group:
Path: Accounting  controlling  Cost centre accounting  Master data  Cost

element group  Create (T. Code KAH1)
Cost element group: AMLADMIN
Enter
AMLADMIN – Administration expenses for AML
Select insert cost element button (Shift + F4)
400300 to 400399
Enter & save
13
Posting of transaction in FI
T. Code: F – 02
Document date: 23.10.2006
Type: SA
Company code: AML
Posting: 40
Account no: 400100 (Salaries)
Enter
Amount: 200000
Cost centre: Dept A
Text: Salary payment
Posting: 40 (one more debit)
Account No: 400300 (Rent account)
Enter
Amount: 50000
Cost centre: Dept A
Text: Rent payment
Posting key: 50
Account No: 200101 (IDBI Current Account)
Enter
Amount: ‘*’
Business area: AMH

Text: Expenditure for October
Document  Simulate and save
14
To view cost centre wise report:
Path: Accounting  Controlling  Cost centre accounting  Information system 

report for cost centre accounting  line items  cost centers actual line items (KSB1).
Cost centre: select dept A
Execute
Keep the cursor on first line item
Select doc. Button (Shift + F2)
Select back arrow
Select change layout button (Ctrl + F8)
Select ref doc. No. under column set
Select value in reporting currency under columns.
Select left arrow (or) show selected field button
Select reference document number under column set
Select document number under columns
Select left arrow (or) show selected fields’ button
Select business transaction under column set
Select reference document number under column
Select left arrow (or) show selected fields button
Enter
15
Repost Co. line items (RKU3)
No FI document
Only Co. document
Dept A Dept B Dept C
400100 200000 75000 25000

400300 50000
Transfer document wise/line item wise
Report Co. line item: Accounting  Controlling  Cost centre accounting  actual
postings  report line items  enter (T. Code KB61)
Select accounting document number: 33
Company code: AML
Fiscal year: 2006
Execute (F8)
Double click on 200000 (First line item)
New accounts assignment
Amount: 75000
Cost centre: B
Select next item button (Ctrl + F11)
Select next button
New account assignment
Amount: 25000
Cost centre: Dept C
Save
Go and see the cost centre report (KSB1)
16
Cost centre: dept A
Execute (F8)
To view cost element wise totals
Select cost element column
Select sub total button (Ctrl + Shift + F6)
Repost cost: (RK01)
 Split department/wrong postings to cost centre

 Transfer amount wise/cost element wise
 No FI document only Co. document
25000 dept C  No FI document

10000 Dept C  Only Co document
Repost cost:
Path: Accounting  Controlling  Cost centre accounting  Actual postings 

Manual re postings of costs (T. Code: KB11N)
Ccts (old) – Dept A
Cost element: 400100 (Salaries)
Amount: 25000
Ccts (New): Dept C
Ccts (old): Dept A
Cost element: 400300 (Rent)
Amount: 10000
Ccts (new): Dept C
Save
17
Planning cost centre wise:
Path: Accounting  controlling  cost centre accounting  planning  cost and

activity inputs  change (T. Code KP06)
Version: 0
From period: 1
To period: 12
Fiscal year: 2006
Cost center group: AMLHIER
Select next page (or) page down button
Cost element: 400000 to 499999
Select form based radio button
Free centers to choose cost Form based enter cost element list
element from drop down is available on screen plan against
menu and plan cost element
Select over view screen button (F5)
Cost element: 400100
Enter plan fixed cost: 600000
Distribution key: ‘0’ (Equal distribution)
Select cost element: 400100
From menu  go to  period screen F6
Select back arrow

For cost element: 400300
Plan fixed cost: 540000
Distribution key: 1
To plan for department: B
Select combination button (Ctrl + F12)
To go to department: A
Select previous combination button (Ctrl + F1)
18
To view various reports cost centre wise accounting
Path: controlling  cost centre accounting  information system  reports for cost
centre accounting  plan/actual comparison  cost centre actual/plan/variance (T. Code
S _ ALR _ 87013611)
Fiscal year: 2006
From period: 7
To period: 7
Plan version: 0
Cost centre (or) values – Dept A
Execute
To go to transactional level
Keep the cursor on salaries A/C and costs
Select call up report button (F7)
Double click on cost centre actual line items
Keep the cursor on first line item
Select document button
How to set up controlling area
Path: Accounting  Controlling  Cost centre accounting  environment  set

controlling area (T. Code OKKS)
Period lock:
Path: Accounting  Controlling  Cost centre accounting  environment  period
lock  change (T. Code OKP1)
Controlling area: AML1
Fiscal year: 2006
19
Selected button (FS) FI CO
a) Transaction
effect FI and CO (COIN) √ √
b) Transaction
Affect only Co (RKU1/RKU3) No √
c) Transaction
effect only FI balance sheet √ No
Keep the cursor on 01
Select lock period button (F5)
Save
20
Reconciliation Ledger
 Reconciliation used when
 When number of company codes having one controlling area  2nd scenario
 It generates documents only in FI
 It can be run at controlling area
AML controlling area
Company code
AML Company code
ASL
Dept a Dept B Dept C Dept X Dept Y Dept Z
If salaries paid and posted FI at (F – 02)
Salaries A/C
100000
Out of 100000/- salaries 20000 belongs to company code ASL (Dept x) balance
80000/- belongs to company code AML
If we use the reconciliation account at cost centre level and the 20000/- is transferred to
company code ASL (Dept x) it passes the entry in Financial automatically
Here
Reports at  No FI records
Co. area
In AML Books
ASL Dr 20000
To Salaries A/C 20000
In ASL Books
Salaries A/C Dr 20000

To AML A/C 20000
21
Customization at finance:
Copy company code AML customization including accounting to
Path: SPRO  enterprises structure  definition  financial accounting  edit, copy,

delete, check company code
Double click on copy, delete, check company code (T. Code EC01)
From the menu select organization object  copy organization object
From company code: AML
To company code: ASL
Enter
Select ‘yes’ for the message (For copy the G/L Accounts)
Select ‘No’ button to allocate a different local currency
Ignore the message press enter
Short description, customization for Aravind Steels limited
Press enter
Enter once again to saving the request
Go on press enter till you got the message company code AML copied to ASL with out
75 number range objects.
Ignore the message press enter
Select back arrow
Double click on edit company code data

Select position button
Give the company code: ASL
Enter
Select company code: ASL
Select details button
Change the company name to: Aravind Steels limited
Save & Save in your request
22
Assign company code to company
Path: SPRO  enterprises structure  Assignment  Financial Accounting  Assign
Company code to company
For company code: ASL
Assign company AVG then select
Save button (or) (ctrl + s)
Document type ‘SA’ should allow inter company posting
Use the transaction code: ‘OBA7’
Document type: SA
Enter
Select the document type: SA
Select inter company posting check box
Save
Creation of 2 G/L Accounts
AML Books ASL Books

a) FI/CO reconciliation A/C a) FI/CO reconciliation Accounts
400150 A/C (Expenses A/C ( 400150)
with out cost element)
b) ASL A/C 0 200160 b) AML  A/C No: 200161
23
Use the transaction code:FS00
Give the G/L account No: 400150
Company code: AML
Select with template button
Give the G/L account: 400100 (salaries account)
Company code: AML
Enter
Change short & long text: FI/CO reconciliation account
Field status group: select ICCF (Co  FI reconciliation posting)
Save
Give the G/L Account NO: 400150
Company code: ASL
Company code: AML
Enter & save
G/L Account No: 200160
Company code: AML
Give the G/L account No: 200120 (Inventory raw material)
Company code: AML
Enter
24
Change short & long text to: Aravind steels limited
Save
Company code: ASL
Give the G/L Account No: 200160
Company code: AML
Enter
Change the short text & long text to: Aravind mills limited
Save
Prepare cross company code transactions
SPRO  financial accounting  general ledger accounting  business transaction 

prepare cross company code transactions
FI Customization (T. Code OBYA)
Give the company code 1: AML

Company code 2: ASL
Enter
Posted in AML
Cleared against ASL
Debit posting key: 40
Account debit: 200160
Credit posting key: 50
Account credit: 200160
25
Company code: 2
Posted in: ASL
Cleared against: AML
Debit posting key: 40
Account debit: 200161
Credit posting key: 50
Account credit: 200161
Co. Customization:
Assign company code ASL to controlling area AML:
Use the transaction code: OKKP
Select controlling area: AML
Company code to controlling area  select cross company code cost accounting
Document type: SA
Save
Double click on assignment of company codes folder:
Select company code: AML
Select copy as button
Change the company code to: ASL
Enter & save
26
Define adjustment accounts for reconciliation posting:
Path: SPRO  controlling  cost element accounting  reconciliation ledger  define

adjustment accounts for reconciliation postings
Double click define accounts for automatic postings
From the menu select extras  select controlling area
Give your controlling area: AML
Enter
Select change account determination button
Save
Give the account No: 400150 (FI/CO reconciliation account)
Save & save in your request
Specify document no. range for reconciliation posting:
Same path: (T. code: OK13)
Select change intervals button
Select interval button
Give the No. range: 01
Enter & save
Creation of cost centre (path: KS01)
Give the cost centre: Dept X
Valid from: 01.04.2006 to31.12.9999
Reference cost centre: dept A
27
Enter
Change the name to dept X
Description, cost centre dept X
Person responsible: X
Company code: change to ASL
Posting of salaries in company code AML (F -02)
Type: SA Company code: AML
Posting key: 40 Account No: 400100 (Salaries)
Enter
Amount: 100000
Cost centre: Dept A
Text: salary payment
Posting key: 50
Account No: 200105 (SBI current account)
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
Document  Simulate & save
28
Go and see the G/L account: (FS10N)
Give the G/L account No: 400100 (Salaries)
Company code: AML
Fiscal year: 2006
Execute
Select back arrow
Execute
Cost centre: Dept A to Dept C
Execute
Select back arrow
Give the cost centre: Dept x
Execute
Reposts costs: (KB11N)
Give the cost centre old: (Dept A)
Cost element: 400100 (Salaries)
Amount: 20000
Cost center new (Dept x)
Save
Go and see the G/L Account: (FS10N)
Give the G/L account No: 400100 (salaries)
Company code: AML
29
Fiscal year: 2006
Execute
Select back arrow
Execute
Go and see the cost centre report (KSB 1)
Cost centre: Dept A to Dept C
Execute
Select back arrow
Give the cost centre: Dept x
Execute
Reconciliation ledger run:
Path: accounting  Controlling  Cost element accounting  Actual postings 

Reconciliation with FI (T. code: KALC)
Select controlling area radio button
Period: 8
Fiscal year: 2006
Deselect test run check box
Execute
Select reference document No: 1
Select back arrow
Select reference document No: 2
30
Cross company code postings in FI
If outstanding expenses paid by ASL on behalf of AML – Entries
In AML - Outstanding expenses A/C Dr

To ASL
In ASL Books - AML Dr

To Bank
Use the transaction code: (F-02)
Give the document date: 01.11.2006
Type: SA
Company code: ASL
Posting key: 50
Account No: 200105 (SBI Current Account)
Enter
Give the amount: 5000
Business area: AMH
Text: Out standing expenses payment on behalf of AML
Posting key: 40
Account No: 100500 (Outstanding expenses)
New company code: AML
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
Document  Simulates & Save (or) (ctrl + s)
31
Double click on 3rd line item
Give the business area: AMH
Text: ‘+’
Select next item button
Business area: AMH
Text: ‘+’
Select continue button
Accrual orders: (Inputed cost calculations)
- This is used for month and provisions in Co

- It generates only document in CO
- Cost element category – 03 – Accrual/deferred per surcharge
- For irregular expenditure we use this accrual orders
If the provision made only in year end in FI records.
For the last month the cost of the product is high. Hence provision is made in Co regards
for every month to reduce the product cost
In this scenario
1st Scenario
30/11/06 Bonus A/C Dr (Dept A)

To Outstanding A/C
01/12/06 Outstanding A/C Dr

To Bonus A/C
2nd Scenario (open item management)
30/11/06 Bonus A/C Dr (Dept A)

To Outstanding A/C
(Make entry every month)
3rd Scenario (Made provision for Bonus (in Co. Records)
Salaries A/C Dr 100000 (Dept A)

To 10% Bonus 10000
32
If bonus paid year ending
Bonus A/C Dr (Dummy A/C) 120000

To Outstanding expenses A/C 120000
Creation of G/L account of bonus fund (FS00)
Company code: AML
Give the G/L account No;: 400100 (Salaries A/C)
Company code: AML
Enter
Change short text & G/L account long text: Bonus account
Save
Give valid from date: 01.04.2006 to 31.12.9999
Enter
Cost element category: select 3 (Accrual/deferred per surcharge)
Creation of dummy cost centre: (KS01)
Give the cost centre name: Depart W
Valid from 01.04.2006 to 31.12.9999
Give the reference cost centre: Dept A
Enter
33
Change the name to: Dept W
Change the description: Cost cost centre dept W
Maintain overhead structure:
SPRO  controlling  cost element accounting  Accrual calculation percentage

method  maintain overhead structure (T. Code: KSAZ)
Select create overhead structure button (F7)
Overhead structure: AML1
Description: Bonus calculation for AML
Select save button
Give the Row 10: Base: AML 1
Enter
Give the name: Salaries
Select create button
Row 20: overhead rate: AML2
Enter
Give the name: Bonus
Dependency: select KRS1 (Controlling Area)
Give from to: 10 to 10
Credit: AML
Enter
34
Save
Keep the cursor on overhead structure: on AML1
Select assignments button
Select: Actual accrual radio button
Select continue button
Valid from: 01 2006 valid to 12 2006
Overhead structure: AML1
Save
Double click on overhead structure on AML
Keep the cursor on actual accrual
From menu select environment  Bases
Double click on AML1 (Salaries)
Give from cost element: 400100 (Salaries A/C)
Save
Select back arrow
From the menu select environment  Overhead rates
Double click on AML2 (Bonus)
Valid from: 01 2006 valid to 12 2006
Actual overhead rate: 10%
Save
35
Select back arrow
From the menu select environment  Credits
Double click on AML bonus
Company code: AML
Business area: AMH
Valid to 12 2006
Cost centre: Dept W
Save
Assign Co. number range interval for the process (KAZI)
i.e. Actual cost centre accrual
Use the transaction code: KANK
Select maintain groups button
Double click on KAZI
Select: Co document No. range interval for AML check box
Save
36
Salaries posting in cost centre in dept B (F – 02)
Type: SA
Company code: AML
Posting key: 40
Account No: 400100(Salaries A/C)
Enter
Cost centre: Dept B
Text: salaries posting
Posting key: 50
Account No: 200105 (SBI current A/C)
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
Accrual calculation
Accounting  controlling  cost element accounting Actual postings  accrual

calculation (KSA3)
Select cost centre radio button
Give the cost centre: Dept B
Period: 8
Fiscal year: 2006
37
Deselect: test run check box
Select: Details list check box
Execute
Select next list level button
Give the cost centre: Dept B
Execute
Select back arrow
Give the cost centre: Dept dummy
Execute
Bonus provision on 31.03.2007 (F -02)
Document date & posting date: 31.03.2007
Type: SA
Company code: AML
Posting key: 40
Account: 400110 (Bonus A/C)
Enter
Ignore the warning messages, press enter
Give the amount: 10000/-
Give the cost centre: dept dummy
Text: Bonus provision
Posting key: 50
Account No: 100500 (Outstanding expenses)
38
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
Bonus in the cost centre report (KSB1)
Give the cost centre: Dept Dummy
Posting date: 01.04.2006 to 31.12.2007
Execute
Period and closing:
Service cost Production cost

Enter enter
While posting service cost, we don’t know to which production centre it is

applied. Only month ending transfer cost from one cot centre to other cost centers.
Method: 1: (Here we transfer primary cost as well as secondary cost)

- Receiving cost centre can not track the original cost elements
- Co. document No. range intervals  RKIU
Method: 2 (Distribution):
- Transfer only primary cost

- Receiving cost centre can track the original cost
element
- Sender should be only cost centre
- Co. document No. range interval – RKIV
Method: 3 (Periodic posting):
- Transfer only primary cost

- Receiving cost centre can track original cost element
- Sender can be any cost object  Cost centre/orders
- Co. document No. range intervals  RKIB
39
Method: 4 (Indirect actual allocation):
- Transfer quantities and values

- Co. document member range intervals  RKIL
Example:
Service dept: C
Salaries – 100000
Wages - 200000
Rent - 50000 Dept A: 90% (315000)
---------- Dept B: 10% (35000)
350000
Cycle: If allocation of cost elements are in different ways. We have to create No. of
segments of No. of cycles.
If service dept: Production Dept

Salaries – 100000 A B
Rent - 20000 75% 25%
Here we have 2 methods:
1. One cycle – No. of segments
XYZ
↓ ↓
Seg1 Seg2
2nd Method:
XYZ XYZ
↓ ↓
Seg1 Seg2
Here to better follow 1st method because of you can make any no. of segments
automatically.
In second method we can create up to 10 methods.
Statistically key figures: (S. K. F)
- Statistical figures are used to allocation of costs from one cost centre to other costs
centers.
40
Example: No. of employees, sq. meter area etc.
- It can be fixed or total
- If you select category fixed, the values are common till the year end, if we don’t change
in between – No. of employees.
- If we select category of total, the values are to be entered each month Ex: No. of
electrical units consumed, no. of telephone calls.
- Here it generates co document (Number ranges for the process (RKS – (Actual
statistical key figures)
Assessment:
Cost centre Production Production

Service Dept C Dept A Dept B
(Key Figure)
Salaries (No. of employees)

Rent (Percentage basis)
Creation of statistical key figure employee
Path: Accounting  Controlling  Cost centre accounting  master data  statistical

key figures  individual processing  create (KK01)
Give the statistical key figure: Emp
Enter
Give the name: Employee
Statistical figure unit measurement: Select PER (Persons)
Key figure category: select fixed values
Save
Assign Co No. range interval for the process of RKS (Use the Transaction code:
KANK)
Co. Area: AML
Select maintain groups’ button

Double click on the process RKS (Enter statistical figures)
Select Co. document No. range interval for AML check box
41
Enter statistical key figures:
Path: Accounting  controlling  cost centre accounting  actual postings 

statistical key figures  enter (KB31N)
Give the receiving cost centre: Dept A
Statistical key figure: Emp (Employee)
Give the total quantity: 75
Cost centre: Dept B
Statistical key figure: Emp
Total quantity: 25
Save
Note: enter the document date & posting date: 06.10.2006
Creation of secondary cost element
Path: Accounting  Controlling  Cost centre accounting  master data  cost

element  individual processing  create secondary (T. Code: KA06)
Give the cost element No: 1000000
Valid from: 01.04.2006 to 31.12.9999
Enter
Give the name: Assessment cost element
Description: Assessment cost element
Cost element category: select 42 (Assessment)
Save
42
Creation of assessment cycle
Path: Accounting  controlling  cost centre accounting  period end closing 

current settings  define assessment (S _ALR _ 87005742)
Double click on create actual assessment
The final T. Code is (KSU1)
Cycle: AML1
Start date: 01.04.2006
Enter
Text: Cost allocation using assessment
Select: interactive check box
Purpose of interactive check box:
Example:
Service dept C (Rs. 100000):
It allocated to Product A – 80% - 80000

Prod Dept B – 10% - 10000
Service Dept X – 10% - 10000
(Here it will become 0 (Zero)
Service Dept X:
200000
+ 10000 (From service dept C)
---------
210000
It allocated to Prod Dept H - 60% - 126000
Prod Dept I - 20% - 42000
Prod Dept C- 20% - 42000
42000/- allocated to service dept c will be again reallocate to various dept. up to it will
becomes zero (0)
If you select interactive check box it will allocate the costs up to zero
automatically.
43
Select attach segment button:
Give the segment name: segment 1
Name: salary allocation
Assessment cost element: select 1000000
Sender rule: selected posted amounts
Share in percentage: 100%
Select actual value origin radio button
Receiver rule: select variable portions
Variable portion type: select actual statistical key figures
Select senders/receivers tab
Sender cost centre: Dept X
Cost element: 400100 (salaries)
Receiver cost centre group: select AML prod
Select receiving tracing factor tab
Statistical key figure: Emp
Select receiver weighing factor tab
Save
Select attach segment button
Segment name: segment 2 (Rent allocation)
Assessment cost element: select 1000000
Sender rule: Posted amount
Sharing percentage: 1001
44
Select origin value radio button
Receiver rule: Fixed percentages
Select senders/receivers tab
Sender cost centre: Dept C
Cost element: 400300 (Rent)
Receiver cost centre group: AML Prod
Select receiver tracing factor tab
Statistical key figure: Dept A – 40%

Dept B – 60%
Save
Assign Co number range interval for the process (RKIU) (Use the transaction code
KANK)
Double click on RKIU (Actual overhead assessment)
Select Co. document number range intervals for AML check box
Give the cost centre: Dept C
Give the period: 01.10.2006 to 31.10.2006
Execute
45
Assessment Run:
Path: Accounting  Controlling  cost centre accounting  period end – closing 

single functions  allocations  Assessment (KSU5)
Period: 7
Fiscal year: 2006
Deselect: Test run check box
Select the cycle: AML 1
Execute
Select receiver button
Give the cost centre: Dept A
Posting date: 01.10.2006 to 31.10.2006
Execute
Internal orders:
Internal orders are used & decision making purpose
- To view costs for a specific task

- Vehicle wise costs/ - Based on petrol expenses & repair
and maintenance
- Telephone wise costs/exhibition costs/production order
costs
-Orders are of 2 types
1. Real orders
2. Statistical orders
1. Real orders: 2. Statistical orders:
- Settlement possible - Not possible

- Settlement possible in cost centre, - Only for information/decision making
G/L Account & Asset
- Settlement to cost centre – Internal settlement (With in Co)
46
- Settlement to G/L account – External settlement
STATISTICAL ORDERS:
Example: Telephone orders:
FI posting  G/L account no – 100000
Cost centre administration – 100000

Order  Telephone – 100000
(We did not allocate the total amount to cost centre. Only 100000 is allocated
because one is real and another is statistical)
a) When we post to 2 cost objects only. One object will be real and others will be
statistical.
b) At the time of creation of order, there is a check box for statistical order.
Order Cost centre

a) Select statistical order check box Statistical Real
b) Deselect statistical order check box Real Statistical
In the month ending cost centers cost will be apportioned to product.
i. Real Orders:
Vehicle orders: (Allocation from order to cost centre)
Order – Red
FI posting – G/L Account

Petrol expenses
Order – Vehicle No: 1234
Settlement: It allocated to Dept A, Dept B & Dept C.
(Allocation may be percentage/ratio/amount basis)
ii. Statistical order (allocation from cost centre to cost centers)
FI posting  G/L account

- Cost centre: Administration (Red)
- Order vehicle – 1234 statistical
- Cost centre admin: Dept A, Dept B & Dept C
(Assessment)
47
1st Scenario (Statistical orders)
Define order type:
SPRO  Controlling  Internal orders  order master data  define order types (T.
Code: K0T2 _ FUNCAREA)
Order category: 01 (Internal order (Controlling))
Enter
Give the order type: AMLT
Description: Telephone orders for AML
Planning profile: 000001 (General budget/plan profile)
Object class: Select overhead costs
Select release immediately check box
Save
It gives the message No. range not processed
Select Assign/change intervals button beside No. range intervals
Double click on AMLT
Select Motor pool A – ZZZZZZZZZZZZ (External check box)
48
Creation of field status group making cost centre and internal order mandatory:
(T. code: OBC4)
Select field status variant (AML)
Double click on field status groups folder
Select G004 cost Accounts
Change the field status group to G002
Change text to: Cost Accounts (CC & IO) required
CC. cost centre & IO (Internal order)
Enter & Save
Select G002 and double click
Double click on additional account assignments
Select CO/PP order: required entry field
Save
Creation of G/L Account – Telephone expenses: (FS00)
Company code: AML
Give the G/L Account No: 400300 (Rent A/C)
Company code: AML
Enter
Change the short text & long text to telephone expenses
49
Change the field status group to: G002
Save
Valid from 01.04.2006 to 31.12.9999
Enter
Cost element category: 1
Save
Creation of Internal order:
Path: Accounting  Controlling  Internal orders  master data  Special functions

 order  Create (KO01)
Give the order type: AMLT
Enter
Order: TEL 66626246 (Telephone No)
Short text: Telephone No: 66626246
Company code: AML
Business area: AMH
Select control data tab
Select statistical order check box
Save
One more order type: AMLT
Enter
Give the order: TEL 66626247
Company code: AML
Business area: AMH
Select statistical order check box
50
Save
Creation of order group:
Path: Accounting  Controlling  Internal orders  Master data  Order group 

create (KOH1)
Give the order group name: AML HYD TEL
Enter
Give the description: Hyderabad Telephones for AML
Select insert order button
Select: TEL 66626246 & TEL 66626247
Save
Posting of transaction in FI: (F – 02)
Type: SA
Company code: AML
Posting key: 40
Account No: 400305 (Telephone expenses)
Enter
Select cost centre: Dept A
Give the order No: TEL 66626246
Text telephone expenses
Posting key: 50
Account No: 200105 (SBI Current Account)
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
51
Document  Simulate & Save
To view order wise report:
Accounting  Controlling  Internal orders  information system  Reports for

Internal orders  line items  Orders: Actual time items (KOB1)
Give the order No: TEL 66626246
Execute
Select the line items
Select document button
Planning order wise:
Accounting  Controlling  Internal orders  Planning  Cost and activity inputs 

Change (KPF6)
Give the version: 0
From period: 8
To period: 8
Fiscal year: 2006
Order: TEL 66626246
Cost element: 400305 (Telephone expenses)
Select from based radio button
Select overview screen button
Total plan cost: Enter20000
52
To variance report order wise:
Path: Accounting  Controlling  Internal orders  Information systems  Reports

for internal orders  Plan/actual comparisons  orders: Actual/plan/variance
(S _ ALR _ 87012993)
Fiscal year: 2006
From period: 8
To period: 8
Plan version: 0
Give the order value: TEL 66626246
Execute
Real orders:
Creation of secondary cost element called settlement cost element (T. Code: KA06)
Give the cost element: 1000001
Valid from: 01.04.2006 to 31.12.9999
Enter
Give the name: Settlement cost element
Give the description: settlement cost element
Cost element category: select 21 (Internal Settlement)
Save
53
Creation of field status group making order required
Use the transaction code: OBC4
Select field status variant: AML
Double click on field status groups button
Select G002 (Cost Account CC & IO required)
Change the field status group to: G010
Change the text: cost accounts IO required
Enter & Save
Select G010 and double click
Double click on additional account assignments
Cost centre: make it optional entry
Save
Creation of G/L Account: Petrol expenses (FS00)
Company code: AML

Company code: AML
Enter
Change short text & Long text to: Petrol expenses
Select: Create/bank/interest tab
Field status group: Select G010
Save
Enter
54
Save
Maintain allocation structures:
Path: SPRO  Controlling  Internal orders  Actual postings  settlement 

Maintain allocation structures.
Allocation structure: A5
Text: Co allocation structure for AML
Save, save in your request
Select: A5
Double click on assignments folder
Select: New entries button
Give the assignment: AML
Text: Vehicle order settlement
Save
Select: AML
Double click on source folder
From cost element: 400306
Save
Double click on settlement cost elements folder
Receiver new entries button
Receiver category: Select CTR (Cost centre)
Settlement cost element: Select 1000001
Save
55
Maintain settlement profiles:
Same path
Double click on maintain settlement profiles
Give the settlement profile name: AML
Description: settlement profile for AML
Select: To be settled in full radio button
Default object type: CTR (Cost centre)
Select: % settlement check box
Select: equalance No. check box
Select: Amount settlement check box
Under valid receivers
For cost centre: Select settlement required
Max No. of dist trials: 999
Residence time: 12
Maintain number ranges for settlement documents
Same path: (T. Code: SNUM)
Double click on AML
Select standard accounting document check box
56
Define order type: (T. code: KOT2 _ FUNCAREA)
Order category: select 01 (Internal order controlling)
Enter
Give the order type: AMLV (Vehicle order type for AML)
Settlement profile: Select AML
Budget profile: 000001 (General budget profile)
Object class: Select over head costs
Select release immediately check box
It gives the message No. range not processed
Select Assign/change intervals button
Double click on AMLV
Select Motor pool A – ZZZZZZZZZZZZ check box
Assign Co. number range interval for the process KOAO (Actual settlement)
Use the T. Code: KANK)

Double click on KOAO (Actual settlement)
Select Co. document No. range intervals for AML check box
57
Save
Creation of vehicle order: (T. Code KOO1)
Give the order type: AMLV
Enter
Give the order: AP9A1234
Short text: Vehicle No: AP9A1234
Give the company code: AML
Business area: AMH
Deselect statistical order check box
Select settlement rule button
Category: Select CTR (Cost centre)
Settlement receiver: Dept A – Percentage: 70%
Category: CTR (Cost centre)
Settlement receiver: Dept B – Percentage: 30%
Save
Posting of transaction in FI (F – 02)
Type: SA
Company code: AML
Posting key: 40
Give the G/L Account No: 400306 (Petrol expenses)
Enter
58
Give the order: AP9A1234
Text: Petrol expenses
Posting key: 50
Account No: 200105 (SBI current account)
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
Settlement of internal order to cost centers:
Path: Accounting  Controlling  Internal orders  period end closing  Single

functions  Settlement  Individual processing (K088)
Give the order No: AP9A1234
Settlement period: 8
Fiscal year: 2006
Select check transaction data check box
Execute
Select details list button
59
Budgeting and availability control
SAP given 2 types of Budget
Plan Budget
1. Plan period wise 1. Budget for year wise
2. We can plan each element 2. Budget for the whole order

wise
3. Micro level 3. Macro level
4. Called availability control
When you posting actual
1. If the budget cross more than 90% of budget
a. It gives warning message (or)

b. It gives warning message and inform to budget lead (or)
c. Give error message
Number range interval: 04 (Hot coded)

Number range is at client level (Client wise)
Define number range intervals for budgeting
SPRO  Controlling  Internal orders  Budgeting & Availability control  Maintain

No. ranges for budgeting (T. Code: OK11)
Select intervals button: No: 04
From: 4000000000 to 4999999999
Enter
Define tolerance limits for availability control
Same path
60
Profile: 000001 (General budget profile)
Transaction group: Select ++ (All activity groups)
Action: select 2 (warning with maid to person responsible)
Give the usage: 90%
Specify exempt cost element from availability control
(Exempted cost elements from budget)
Same path:
Give the C/C No: 400100 (Salaries A/C)
Maintain budget manager
Same path:
Order type: AMLV
Object class: Select OCOST (over head)
Give the user ID: SAPUSER
61
Budgeting:
Accounting  Controlling  Internal orders  Budgeting  Original budget 

Change (KO22)
Select original budget button
Give the budget amount: 200000
Enter
From the menu select extras  Availability control  Activate
Save
Posting of Transaction in FI (F – 02)
Type: SA
Company code: AML
Posting key: 40
Give the A/C No: 400306 (petrol expenses)
Enter
Text: Petrol expenses
Posting key: 50
Account No: 200105
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
62
To view the inbox of the budget head
SAP menu  Office  Work place (T. code SBWP)
Select inbox folder
Double click on the message
It gives the message
Capital work in progress line item settlement CWIP _ M/L
Freight charges
Installation charges
Define settlement profile
SPRO  Financial accounting  Asset accounting  Transactions  Capitalization of

assets under construction  define/assign settlement profile
Double click on define settlement profile
The transaction code is (OK07)
Select settlement profile A1 (settlement assets under construction)
Select to be settled in full radio button
Allocation stock: A1 Co. allocation structure
Default object type asset type: FXA
Select percentage settlement check box
Select equalance No’s check box
Select amount settlement ‘check box’
Under valued receivers for fixed assets
Select settlement required
Document type: AA
63
Max No. of distribution rules: 999
Residence time: 12
Save
Select back arrow 2 times
Double click of assign settlement profile to company code
Select for company code: AML assign settlement profile A1
Enter & Save
Creation of capital work in progress (Asset master) (T. Code: AS01)
Give asset class: AML 4000 (Capital work in progress)
Company code: AML
Enter
Description: C. W. P general
Capitalization: 15.06.2006
Select time dependant tab
Business area: AMH
Select depreciation area tab
Dep. Key: 0000
Save
64
Machinery purchase postings: (T. Code (F – 90)
Give document date: 01.08.2006
Posting date: 01.08.2006
Type: KR
Company code: AML
Posting key: 31
Vendor No: 8700001
Enter
Business area: AMH
Text: Machinery purchase posting
Posting key: 70
Account No: 500000 – 0
Transaction type: 100
Enter
Remove TDS codes
Enter
Amount: ‘*’
Text: ‘+’
65
Fright payment: (F -02)
Posting date: 10.09.2006
Type: SA
Company code: AML
Posting key: 70
Account: 500001 – 0
Transaction type: 100
Enter
Give amount: 25000
Text: Fright payment
Posting key: 50
A/C No: 200105 (SBI Current A/C)
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
66
Creation of machinery asset master (AS01)
Give asset class: AML 2000(Dept A)
Company code: AML
Enter
Give description: Machine No: 40
Capitalized on: 14.11.2006
Select time depended tab
Business area: AMH
Select description area tab
Give description key: AML1
Useful life: 20 years
Period: 4
Ordinary depreciation start: 17.11.2006
Save
Settlement of capital work in progress to Asset
Path: Accounting  Financial accounting  Fixed assets  Capitalized asset under

construction  Distribute (T. Code: AIAB)
Give company code: AML
Asset: 500001
Sub no: 0  Execute
From the menu select edit  Select  Select all
Select enter button
Category select: FXA Asset
67
Settlement receiver: 200004 – 0
Give percentage: 100
Select back arrow
Save
Select settlement button
Give the asset value dated: 17.11.2006
Text: asset settlement
Execute
Go and see the document FB03
Enter
Profit Centre Accounting
- To view profitability product group wise/product wise/location wise/

If business area is not used in FI
1) One location – No. of product groups
Hyderabad
| | |
Cement Steels Pharma
In that case you can get profitability.
2) Each location different product group
Hyderabad Bangalore Mumbai

↓ ↓ ↓
Cement Steel Pharma
Profitability as well as balance sheet
The advantage of profit centre will be derived through derivation rules.
Example: expenditure – Through cost centers
68
Revenues – Automatic account assignment
In case of balance sheet items through business area
We have to create a dummy profit centre
- Transfer to respective profit centre

- We create derivation rules. Future transaction will not
go to dummy profit centre.
Set controlling area:
SPRO  Controlling  Profit centre accounting  Basic settings  Set Controlling

area
Give controlling area: AML
Enter
Maintain controlling area settings:
SPRO  Controlling  Profit centre accounting  Basic settings  controlling area

settings  maintain controlling area settings (T. code: OKE5)
Standard hierarchy: AML
Select elimination of internal business volume check box
Profit centre local currency type
Select 20 (i.e. controlling area currency)
Select confirm button
Select store transactions currency check box
Save
Creation of dummy profit centre:
Path: SPRO  controlling  Profit centre accounting  Master data  Profit centre 
create dummy profit centre (T. code: KE59)
Double click on create dummy profit centre
Give dummy profit centre: AML dummy
69
Select basic data button
Give the name: AML dummy
Description: Dummy profit centre for AML
Profit centre group: AML
Save
Set control parameters for actual data
Path: SPRO  Controlling  Profit centre accounting  Basic settings  controlling

area settings  Activate direct postings  set control parameters for Actual data
(T. Code: 1KEE)
From year: 2006
Select line item check box
Select on line transfer check box
Save
Maintain plan versions
Path: SPRO  Controlling  Profit centre accounting  basic settings  controlling

area settings  activate direct postings  plan versions  maintain plan versions
Select version: 0
Double click on settings for profit centre A/C folder
Year: 2006
Select on line transfer check box
Select line item check box
ER (Exchange rate): Type: B (Bank setting)
Select save button
70
Define number ranges for local documents
Path: SPRO  Controlling  Profit centre accounting  actual postings  Basic

setting actual  define number ranges for local documents (T. Code GB02)
Select actual document from direct posting with GB01 check box
From the menu select intervals maintain
Give your company code: AML
Enter
Year: 2006
Enter & Save
Select back arrow
Select planned document from direct posting with GB01 check box
From menu select interval maintain
Give your company code: AML
Enter
Year: 2006
From: 100001 to 200000
Enter & Save
71
Creation profit centre:
Path: Accounting  Controlling  Profit centre accounting  Master data  profit

centre  individual processing  create KE51
Give the profit centre: Cement
Select master data button
Analysis period 01.04.2006 to 31.12.9999
Give the name: Cement
Long text: Profit centre cement
Person response: A
Select activate button
Profit centre: STEEL
Select master data button
Name: Steel
Long text: profit centre steel
Person response: B
Select activate button
Assign profit centre in cost centre
Accounting  Controlling  Cost centre accounting  Master data  cost centre 

Individual processing  change (T. code: KS02)
Enter
Assign the profit centre: Cement
72
Select save button
Cost centre: Dept B
Enter
Give profit centre: Steel
Select save button
Creation of revenue element – (FS00)
G/L account No: 300000 (Sales account0
Company code: AML
Enter
Enter
Cost element category: Select 11 (Revenues)
Save
Maintain automatic account assignment of revenue elements
Path: SPRO  Controlling  Profit centre accounting Actual postings  Maintain

automatic assignment of revenue elements (T. Code: OKB9)
Account assignment detail
Select business area is mandatory

Save, Save in your request
73
Select AML and then double click on detail per business area/select new entries button
(1)
Hyderabad
| | |
Cement Steel Pharma
300000 – Sales cement

Hyd  Cement
300001 – Sales steels

Hyd  Steels
300002 – Sales Pharma

Hyd  Pharma
(2) Hyderabad Bangalore Mumbai

↓ ↓ ↓
Cement Steel Pharma
300000 – Sales
Hyderabad - cement
Bangalore – Steel
Mumbai – Pharma
Give the profit centre: Cement
Give the business area: AMB
Give the profit centre: Steel
Save
Choose additional balance sheet & Profit & Loss A/C
It is applicable only second scenario
Path: Same path
Select choose accounts
Transaction code: 3KEH
74
Account from: 100000 to 299999
Default profit centre: Cement
Select profit centre detail button
Select create step button
Give the step description: Profit centre derivation for item through Business area
Under define name: GSBER (Business area)
Save
Select maintain rule values button
Select source field interval on/off button
Note down A/C No: 100000 to A/C No: 299999
Business area: AMH
Give the up due profit centre: Cement
From A/C: 100000 to A/c: 299999
Business area: AMB
Profit centre: Steel
Creation of Accounts group
Path: Accounting  Controlling  Profit centre accounting  Master data  Account

group  Create (T. Code KDH1)
Give the account group: PL items
Enter
Profit & Loss account for AML
Select insert accounts button
Give account 300000 – 499999
Save
75
Select back arrow
Next A/C group: BS items
Enter
Give the description: Balance sheet account for AML
Select insert account button
Give the range 100000 to 299999
Save
Planning profit centre wise for P&L items
Path: Accounting  Controlling  Profit centre Accounting  planning 

Cost/revenues  Change (T. Code 7KE1)
Version: 0
From period: 8 to period: 8
Fiscal year: 2006
Company code: AML
Profit centre: Cement
Account group: PL items
For A/C No: 300000(Sales)
Profit centre reporting currency: 500000
For A/C No: 400100 (salaries)
Profit centre reporting currency: 400000
Save
76
Planning for Balance sheet Accounts profit centre wise
Path: Accounting  Controlling  Profit centre accounting  Planning  Balance

sheets accounts  change (T. code: 7KE3)
Version: 0
Fiscal year: 2006
Company code: AML
Profit centre: Cement
A/C group: BS items
For A/C No: 100300 (SBI rupee term loan)
Plan: 100000
For account No: 200105
Plan: 100000
Save
Credit sales posting in FI (F – 22)
Give document date: 20.11.2006
Type: DR
Company code: AML
Posting key: 01
Account No: 6200001
Enter
77
Business area: AMH
Text: Credit sales postings
Posting key: 50
Account No: 300000(Sales A/C)
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
Document  Simulate
Save (or) ctrl+s
Expenditure posting (F – 02)
Document type: SA
Posting key: 40
Account No: 400100 (salaries A/C)

Enter
Give amount: 425000
Cost centre: Dept A
Text: Salary payment
Posting key: 50
Account No: 200105 (SBI Current account)
Enter
Amount: ‘*’
Business area: AMH
Text: ‘+’
78
To view various reports profit centre wise for P&L items
Path: Accounting  Controlling  Profit centre accounting  Information system 

Reports for profit centre accounting  Interactive reporting  Profit centre group 
plan/actual/variance
Transaction code: S _ ALR _ 87013326
Fiscal year: 2006
Plan version: 0
Profit centre values: Cement
Profit & Loss account group: PL items
Execute
To view variance report profit centre wise for Balance sheet accounts
Path: Same path
Transaction code: S _ ALR _ 87013336
Fiscal year: 2006
Plan version: 0
Profit centre values: Cement
Balance sheet account group: BS items
Execute
79
Transfer values from one profit centre to another profit centre
Path: Accounting  Controlling  Profit centre accounting  Actual posting  Profit

centre document  enter (T. Code: 9KE0)
Select layout: 8A – 001
Execute
Select entry screen button
Give profit centre: Cement
Account No: 400100 (salaries A/C)
In profit centre local currency: 200000
Save
80
Integration
Organization structure
Company
↓
In SD: combination of sales organization, distribution channel & division they call at as
one sales area.
Movement types: Posting keys in FI
101  Material receipt against purchase order/production

102  Reversal of 101
201  Issue to cost centre (stores of all departments)
261  Issue to orders (Raw material shows)
521  Material receipt with out production order
561  Opening stock taking
81
601  Delivery
Process key (Transaction key)
These are system defined keys

1) BSX  Inventory postings
2) WRX  GR/IR clearing (G.R – Goods receipts)
(I.R – Invoice receipts)
3) PRD  Price difference/production order differences
4) GBB  Offsetting entry for inventory posting
a) VBR – consumption
b) VNG – Scrapping
c) BSA – Opening stocks taking
d) SUF – Production receipt against production order
e) ZOF – Production receipt with out production order
f) VAY – Delivery where sales account is a revenue element
g) VAY - Delivery where sales account is not a revenue account
h) AUA – Production order differences
GBBVBR – Raw material consumption A/C Dr

BSX - To Inventors raw material local A/C
Valuation class:
- Valuation class determines the G/L accounts to be posted automatically.

a) Raw material: 4 valuation classes
– Local
- Imported
- Inter unit
- Inter company
b) Stores: 2 valuation classes
- Local
- Imported
b) Finished goods: 1 valuation class -Own goods
82
Valuation grouping code/valuation modification key/ valuation modifier
Chart of Accounts: AML
AML ASL ALL
Hyd Bangalore Bangalore Mumbai

Hyd Bangalore Mumbai
Rm2 Rm3 Rm4 Rm1 Rm2 Rm3

Rm1
Valuation area Chart of accounts Company Code Valuation group

(plant) code
Hyderabad AML AML X

Bangalore AML AML X
Bangalore AML AML X
Advantage is we need not create valuation group code each company code wise.
Material types Price control Purchase price
1. Raw material – ROH - V – Moving average price - Available

2. Stores & Spares – FRSA - V - Moving average price - Available
3. Packing material – VERP - V - Moving average price - Available
4. Finished goods – FERT - S – Standard price - Raw material + overheads
5. Semi finished goods:

Purchased – HALB - V – Moving average price - Available
Produces – HALB - S – Standard price - Raw material + overheads
6. Traded goods – HAWA - V – Moving average price
7. Services – DIEN
83
Material types – similar to account groups in G/L
In M.M we create material mater
- Material master is to be created under material type

- Material master to be created at plant level
- When no. of plants are using same material it will be
extended to other plants
- Material periods we can open 2 periods at a time
- In G/L it is called as tabs, where as in MM it is called
No. of views like:
- Basic data
- Purchase data
- Sales data
- MRP data
- MRP data
- Ware house
- Quality
- Accounting
- Costing
Why systems support inventory account, not purchase account:
Purchase order
Price – 10
Qty – 5
Taxes 8% Cenvat
4% VAT
Other expenses  2%
In normal accounting system
RM 1 If other expenses not taken
Opening stock 0
Add: Purchases 63
-------
63
Less: Closing stock 10
84
------
Consumption X_
If invoice is not taken (Only Delivery challan copy is taken)
Opening stock 0
Purchases 0
-----
0
Closing stock 20
------
Consumption _X_
In SAP
Opening stock - 0
Purchases 5 -63
Consumption 3 – 37
------
Closing stock 2 – 26
(Here the price of the goods is taken from purchase order).
MM flow (Material management flow)
1. Material requisition: Production dept to stores – called internals
If the material not available, stores department raised.
2. Purchase requisition – stores to purchase dept
3. Purchase dept call for enquiry, quotations & price comparisons
4. Raising the purchase order by purchase dept

Purchase order contains  Vendor, Material, plant, quality, rate, delivery terms
and payment terms
5. Release procedure – Work flow

Up to 10000  Manager Purchases
6. Goods receipt  (G.R)

G.R should be against purchase
Inventory Raw material local Dr – Balance sheet current asset – BSX

To GR/IR clearing raw material local – Balance sheet current Liabilities – WRX
7. Invoice verification  Verification against GR (or)/Purchase orders
85
GR/IR clearing Raw material Dr – Balance current Liabilities – WRX
To party – Sundry creditors – Balance sheet current liabilities – Feam po
8. Consumption:
Raw material consumption local Dr – P&L debit – GBBVBR

To Inventory raw material local – B/S current assets - BSX
9. Wages payment:
Wages A/C Dr
To Bank A/C
10. Production receipt:
Inventory finished goods (At product cost) Dr – Balance sheet current assets – BSX
Increase/decreased stock finished goods – P/L A/C credit – GBBAUF (Production order)
GBBZOF (NO production order)
11. Delivery:
Increase/decrease in stock finished goods – P&L credit: GBBVAY – sales (At product)
GBBVAX – Sales not revenue account
To Inventory finished goods – Balance sheet current asset – BSX
12. Sales billing:
Customer A/C Dr – Sundry debtors – Balance sheet current Asset – From sale order
To sales – P&L A/C credit – ERL
Profit & Loss A/c
(10) Increase/decrease
(8) Raw material 10 in finished goods 11
consumption 0 0
(11) Increase/decrease
(9) Wages 10 in finished goods 0
11
Surplus in Profit & Loss 40 (12) Sales 0 150
15 150
86
0
Balance Sheet
(6) GR/IR 100 (6) Inventory Raw

material 100
(7) GR/IR 100 0
(8) Inventory Raw
(7) Sundry Creditors 10 material 100 0
0
Surplus in P&L A/C (9) Bank -10
40 (10) Inventory finished 110
goods
110 0
11) Inventory finished
goods
(12) Sundry debtors 150
14 140
0
Integration is based on 3 rules:
1. In material master we specially valuation class

2. For valuation class we assign G/L accounts based on the nature of
transaction.
3. Stores person when he received (or) issues material he will enter
movement type, material number and quantity. Accounts will be
updated automatically based on account assignment to valuation class
which is specified in material master.
Material Valuation Inventory GR/IR Consumption

No class Postings clearing GBRVBR
(BSX) (WBX)
RM1 3000 RM 200121 150000 400000 (Raw material
local (Inventory (GR/IR consumption)
R.M. clearing RM
local) local
RM2 3001 RM 200122 150001 400001 (Imp. Material
Imported (Inv. RM (GR/IR consumption)
imported) clearing RM
87
Imported)
Example:
Po1 Po1
Move type 101 Raw material 1
Material No  RM1 Qty: 100
Qty: 20 Kgs Rate – 5
Save Vendor – 1234
Movement type 101 – Debit BSX – 200121 Inventory raw materials – Qty in GRX
Rate as per PO = 100
Credit WRX – 150000  GR/IR clearing.
1st rule:
In material master we specify valuation class:
Here RM1 & RM2 (Material master) is specify the valuation

Class 3000 RM local & 3001 RM imported respectively.
(2) For valuation class we assign G/L accounts based on the nature of transaction.
Here valuation class (3000 RM local & 3001 RM Imported)

Assign G/L accounts Inv. Postings (BSX) ( 200121 – Inventory raw material local, 20012
– Inv. Raw material imported), GR/IR clearing. WRX (150000 – GR/IR clearing),
150001 (GR/IR clearing raw material imported)
88
Price differences
Batch Moving average
Stocks fully available Stocks partly available Stocks not available
Batch mode:
Batch: Qty Rate Amount
1 - 100 10 1000
2 - 200 40 8000
------- --------
300 9000
1 - 10 10 100
-------
8900
+ 180
--------
9080
--------
Receipt:
a) Inv. Raw material local A/C Dr 1000 – BSX

To GR/IR clearing raw material local 1000 – WRX
Consumption:
b) Raw material consumption local Dr 100 – GBBVBR

To Raw material local 100 – BSX
Price difference: Inv. Verification

GR/IR clearing raw material 1000
Inv. Raw material local 200
To party 1200
89
Moving average:
Stock partly available
Qty Rate Amount
100 10 1000
200 40 8000
----- ----- --------
300 30 9000
Consumption 280 30 8400
----- --------
20 600
Price difference 40
----- -------
20 640
------ --------
a) Receipt:
Inv. Raw material local Dr 1000 – BSX

To GR/IR clearing raw material 1000 – WRX
b) Consumption:
Raw material consumption local Dr 8400 – GBBVBR

To Inv. Raw material 8400 – BSX
c) Inv. Verification:
GR/IR clearing raw material local 1000 – WRX

Price difference raw material 160 – Prd
Inv. Raw material 40 (20*2) – BSX
To party 1200 (from P.O)
The difference between batch method and moving average method

In batch method it checks with material No and Batch Number only.
Moving average - Stocks not available

Qty Rate Amount
100 10 1000
200 40 8000
------ ---- --------
300 30 9000
Consumption 300 30 9000
a) Receipt:
90
Inv. Raw material load Dr 1000 – BSX
To GR/IR clearing raw material 1000 – WRX
b) Consumption:
Raw material consumption local Dr 9000 – GBBVBR

To Inv. Raw material 9000 – BSX
c) Inv. Verification:
GR/IR clearing raw material 1000 – WRX

Price difference raw material 2000 – PRD
To party
SD to FI
1. Enquiry and quotation
2. Sale order: Material, qty, plant, sales organization, rate, delivery terms,
payment.
3. delivery:
With out post goods issue (With out PGI) – No transfer of ownership
With post goods issue (With PGI) – Transfer of ownership
FOB(Free on Board):
Example:
Plant Port Customer

↓ ↓
Hyd Chennai
Delivery without PGI Delivery with PGI
Only material Material document

No FI document FI document
Inv/Dec in stock finished goods – Dr  GBBVAY (Sales revenue element)

 GBBVAX (Sales not revenue element)
To Inventory finished goods – BSX
a) Billing: Billing should be with reference to delivery
91
Billing: In SD module there is a pricing procedure
Procedure:
i) From region – Andhra Pradesh

To region - Andhra Pradesh
Customer - Taxable
Material - Tax
Billing
Basic XXX
Excise XXX
VAT XXX
--------
Bill amount XXX
ii) From Region – Andhra Pradesh

To Region – Andhra Pradesh
Customer – Non taxable
Material – Non taxable
Here in this case the buyer is purchasing in local state and same is exported – under
Form H
Billing is
Basic XXX
--------
Bill amount XXX
iii) From region – Andhra Pradesh

To Region – Andhra Pradesh
Customer – Taxable
Material – Taxable
Billing is
Basic XXX
Excise XXX
CST XXX
--------
Bill amount XXX_
iv) From Region – Andhra Pradesh

To Region – India
92
Customer – Non taxable
Material – Non taxable
Billing
Basic XXX
--------
Bill amount XXX
Condition type: KOFI
Assignment of Accounts:
(1) (2) (3) (4) (5) (6) (7) (8)

Application Condition Chart of Sales Account Account Accounts G/L
area type accounts org assignment assets key accounts
group for group
customer for
materials
V – Sales KOFI AML 03 300001-
& Hyd 01 ERL Sales
distribution local
own
goods
V KOFI AML Hyd 01 01 ERL 300002
– Sales
local
taxed
goods
V KOFI AML Hyd 01 03 ERF 400320
–
Freight
local
own
good
V KOFI AML Hyd 01 ERF 400321
01 –
Freight
local
traded
93
goods
(5) Account assignment group for Customer
01 – Domestic revenues
02 – Foreign revenues
03 – Affiliated company revenue
(6) Account asset group for material
01 – Trade goods
02 – Services
03 – Finished goods
(7) Accounts key:
ERL – Sales revenue
ERF – Freight revenue
ERB – Rebate (Trade discount)
ERS – Sales deduction (Commissions)
MM – Integration step
1. Define plant
Path: SPRO  Enterprises structure  definition  logistics  general  define,

copy, delete, check plant
Double click on define plant
Give plant: AMLP
Assign factory calendar: A2 (AML Hyderabad factory calendar)
Save
Give the name: AML Hyderabad factory plant
Give the country: IN (India)
Enter
Give the short description: MM Customization for AML
Enter
94
Press enter to save in your request
Define copy, delete, check division:
Path: same path
Select define, copy, delete, check division
Double click on define division
Division A1  Name: Cement division
Save

Maintain storage location:
Path: SPRO  enterprises structure  Definition  Materials management 

Maintain storage location
Give the plant: AMLP
Enter
Give the storage location: Hyd
Give the description: Hyderabad storage location
Save
Maintain purchasing organization:
Path: same path
Give the purchase organization: AMLR: Raw Material of purchase order
Save
95
Assign plant to company code:
Path: SPRO  enterprises structure  assignment  Logistics  general  assign

plant to company code
Select find button
Give company code: AML
Enter
Select: AML
Select assign button
Select: AMLP check box
Enter
Assign business area to plant/valuation area and division:
Path: same path
Select plant/valuation area – Division button
Plant: AMLP
Division: A1
Select save (or) (ctrl + s)
Assign purchasing organization to company code:
96
SPRO  enterprises structure  assignment  materials management  assign
purchasing organization to company code
Select find button
Enter
Select: AMLR check box
Enter
Creation of Material group:
Path: SPRO  logistics general  Material group  create material group
Material group: CHEMICAL
Give the material group description: Chemicals
Save
Creation of purchasing group:
Path: SPRO  materials management  purchasing  create purchasing groups
Purchase group: AML
Description: Raw material purchase group
Save
Maintain company codes for materials management:
Path: SPRO  logistics  general  material master  basic settings  maintain

company codes for materials management
97
Enter
For the company code: AML
Give the year: 2006
Give the period: 7

Select ABP check box
ABP  Allow back period postings
Ignore the warning message
Press enter
Define attributes of material types:
SPRO  logistics general  material master  basic settings  material types 

define attributes of material types
Select material type: ROH (Raw material)
Double click on qty/value updating folder
Give the valuation area: AMLP
Enter
For AMLP: select qty updating check box & value updated check box
Save
Select back arrow
Select material type: FERT (Finished product)
Double click on qty/value updating folder
98
Enter
For AMLP: select qty updating check box & value updated check box
Save
Set tolerance groups for purchase orders:
Path: SPRO  materials management  purchasing  purchase order  set tolerance

limits for price variance.
Select: Tolerance key PE & Tolerance key: SE
For company code: 1000
Change the company code: AML
Press enter
Once the company code to AML for SE
Enter & Save
Set tolerance limits for goods receipt:
Path: SPRO  materials management  inventory management & physical inventory

 goods receipt  set tolerance limits
Select tolerance key: B1, B2, &VP for company code 1000
Change the company code to AML for B1
Enter
Change the company code: AML for B2
Enter
99
Change the company code: AML for VP
Enter & save
Plant parameters:
Path: Up to inventory management & physical inventory path is same
Plant parameters
Select plant: 1000

Enter & Save
Maintain default values for tax codes:
Path: SPRO  materials management  logistics invoice verification  incoming

invoice  maintain default values for tax codes
Company code: AML
Select tax code: VO
Set Tolerance limits for invoice verification:
Path: SPRO  materials management  Logistics invoice verification  invoice block

 set tolerance limits.
Select tolerance key BD
Select tolerance key ST for company code 1000
Change the company code: AML
Enter
100
Once again change the Co code to AML for ST
Enter & Save
Define automatic status change
Up to logistics invoice verification the path is same
Invoice verification in back ground  Define automatic status
Change

Save
Creation of GL master (FS00)
1. Inventory raw material local under current assets, loans advance.

2. In finished good under current assets, land & advances
3. GR/IR clearing raw material local under current liabilities & provisions
4. Increase/decrease finished goods under the group increase/decrease the
stocks
5. Raw material consumption local under raw material consumption group
Company code: AML
Give the G/L account No: 200120 (Inv. Raw material)
Company code: AML
Enter
Change short text & long text to: Inventory raw material local
Field status group change to G006 (Material accounts)
101
Select post automatically only check box
2) G/L account No: 200122
Company code: AML
Enter
Change short text & G/L long text to: Inventory finished goods
Save
Company code: AML
Give the G/L account No: 100500 (Out standing expenses)
Company code: AML
Enter
Change short text & G/L long text to: GR/IR clearing raw material local
Tax category: * (All tax types allowed)
Select posting with out tax allowed check box
Save
102
Company code: AML
Give the G/L account No: 300100 (Exchange gain)
Company code: AML
Enter
Change the account group to: Increase/decrease in stocks
Change short text & G/L long text to: Increase/decrease in stocks finished goods
Field status group: G030 (Change in stock accounts)

Save
G/L account No: 400000
Company code: AML
Give the G/L account No: 400100 (Salaries account)
Enter
Change the account group to: Raw material consumption
Change short text & G/L long text to: Raw material consumption local
Save
Valid from date: 01.04.2006 to 31.12.9999
Enter
103
Save
Group together valuation areas:
Path: SPRO  materials management  valuation & account assignment  account

determination  account determination with out wizard  group together valuation
areas
Give the valuation area: AML1
Enter
For valuation area: AMLP – valuation grouping code: X
Save
Define valuation classes:
Path: same path
Select valuation class button
Select valuation class 3000 raw material
Change the valuation class, class to AML1
Change the description to Raw materials local
Enter
Select valuation class: 7920 (Finished product) check box
Change the valuation class to AML2
Change the description: finished goods
Enter & save
104
Configure automatic postings:
Path: same path
Select cancel button
Select account assignment button
Transaction code: 0BYC
Double click on BSX (Inventory postings)
Give the chart of accounts: AML
Enter
Select valuation modifier check box
Select valuation class check box
Save
Valuation modifier: X
Valuation class: AML1
Give the account No: 200121 (Inventory raw material local)
Valuation modified: X
Account No: 200122
Save
Select back arrow
Double click on WRX (GR/IR clearing)
Select valuation class check box
Save
105
Account No: 100510 (GR/IR raw material)
Save
Select back arrow
Double click on GBB (offsetting entry for Inventory postings)
Select general modification check box
Valuation modifier check box
Valuation class check box

Save
General modification: VBR
Valuation class: AML

Account No: 400000
General modification: AUF
Account No: 300200 (Increase/decrease in stock)
General modification: Z0F
Account No: 300200
General modification: VAY
106
Account No: 300200
General modification: VAX
Account No: 300200
Save
Document types & number ranges: (OBA7)
Select document type: WE (Goods receipt)
Note down the number range: 50
Select No. range information button
No. range: 50; year: 2006
From no: 800001 to 900000
Enter & Save
Select type: WA (goods issue)
107
No. range: 49 year: 2006
From no: 900001 to 1000000
Enter & Save
Select type: RE (Gross invoice receipt)
No. range: 51 year: 2006
From no: 1000001 to 1100000
Enter & Save
Creation of vendor master in MM (Path: XK01)
Purchase organization: AMLR
108
Account group: AML2
Enter
Give the name of the vendor: Reliance industries
Country: In (India)
Select next screen button 3 times
Reconciliation account: 100501

Sort key: 012
Select next screen button
Payment terms: 0001
Select next screen button 3 times
Order currency: INR
Select GR based invoice verification check box
Save
Material master creation:
Path: Logistics  materials management  material master  material  create

(General)  Immediately (MM01)
Give the material No: AMLRM!
Industry sector: Mechanical Engineering
Material type: Raw material
Press select views button
Select: Basic data 1
Select: purchasing
Select: General plan data/storage/ accounting1
Select organization levels button
Storage location: Hyd
Enter
Give the description: Raw material 1
109
Base unit of measurement: Kg
Material group: Chem (Chemical)
Select purchasing tab
Purchasing group: AML (Raw material purchase group)
Select accounting 1 tab
Division: A1 (Cement division)

Valuation class: AML1 (Raw materials local)
Price control: V (Moving average price)
Moving price: 50/-
Total stock: 0
Total value: 0
Save
To open material periods:
Path: Logistics  materials management  Material master  other  Close period

(T. code: MMPV)
Give the from company code: AML
Period: 8
Fiscal year: 2006
Select check & close period radio button
Execute
Select back arrow
From company code: AML
Period: 9
Fiscal year: 2006
Select check & close period radio button
Execute
Purchase order creation:
110
Path: Logistics  Materials management  Purchasing  Purchase order  Create 
Vendor/supplying plant known (T. Code: ME21N)
Give the vendor number: 6400001
Purchasing organization: AMLR
Company code: AML
Purchasing group: AML

Item: 10
Material: AMLRM1
P. O. quantity: 100
Net price: 75/-
Plant: AMLP
Save
Note down the P. O. No: 4500014522
Goods receipts:
Logistics  materials management  inventory management  goods movement 

Goods receipt  for purchase order  P. O. No known (T. Code: MIGO)
Give the purchase order No: 4500014522
Enter
Select quantity tab
Quantity in delivery note: 100 Kegs
Select item OK check box
Select where tab
Save
Display material document:
Path: Logistics  materials management  Inventory management  Material

document  Display (T. Code: MB03)
Enter
111
Select accounting documents button
Select accounting document number
Inventory RM local 7500 – AMLRM1 – AML1 (BSX0

To GR/IR RM local 7500 – AMLRM1 – AML1 (WRA)
Qty in GR * rate as per PO 100 * 75 = 7500
Invoice verification:
Path: logistics  Materials management  logistics  Invoice verification 

Document entry  enter invoice (MIRO)
Invoice date: 25.11.2006
Reference party bill no: 5678
Amount: 7500/-
Text: Invoice verification
Select payment tab
Give the base line date: 02/12/2006
Payment terms: 0001
Give the purchase order No: 4500014522
Enter
Save
Ignore the warning message, enter
From the menu select invoice document  display
112
Select follow on documents button
Double click on accounting document No:
Reliance industries A/C Dr 7500 (From purchase order)

To GR/IR clearing RM local 7500  AMLRM1 – AML1 (WRX)
Goods issue for consumption:
Path: Logistics  materials management  inventory management  goods movement

 Goods issue (MB1A)
Give the movement type: 201
Plant: AMLP
Enter
Material number: AMLRM1
Qty: 10 kegs
Save
From the menu select goods issue  Display
Enter
Select accounting document No
113
Inventory RM local 750 (AMLRM1 – AML1 (BSX0
RM consumption  750  AMLRM1 – AML1  GBBVBR
To view material ledger:
Logistics  Materials management  Inventory management  environment  stock

 stock for posting date (MB5B)
Give the material No: AMLRM1
Company code: AML
Plant: AMLP
Select date: 01.04.2006 to 31.03.2007

Select: value added stock radio button
Execute
SD to FI Integration
Insert regions:
SPRO  general settings  set countries  Insert regions
Region: AP; Description: Andhra Pradesh
Save
Define sales organization
SPRO  Enterprises structure  Definition  sales & distribution  define, copy,

delete check sales organization
Double click on define sales organization
Sales organization: AMLS
Description: Hyderabad sales organization
Statistics currency: INR
114
Name: Hyderabad sales organization
Country: IN (India)
Enter
Short description: SD Customization for AML
Enter
Press enter to saving the request

Define distribution channel
Same path
Double click on define distribution channel
Distribution channel: AD
Description: Direct sales
Save
Define shipping point:
SPRO  enterprises structure  definition  logistics execution  define, copy,

delete, check shipping point.
Double click on define shipping point
Give the shipping point: AMSH
Description: Hyderabad shipping point
115
Save
Give the name: Hyderabad shipping point
Country: IN (India)
Enter
Assign sales organization to company code
SPRO  enterprises structure  Assignment  sales and distribution  Assign sales

organization to company code
Select final button
Enter
Select: AMLS check box
Enter
Assign distribution channel to sales organization
Same path
Select find button
116
Give: AMLS
Enter
Select: AMLS
Select: Assign button
Select: AD check box (Direct sales)
Enter & Save
Assign division to sales organization
Same path
Select find button
Give: AMLS
Enter
Select: AMLS
Select: A1 (Cement division)
Enter & Save
Set up sales area:
Path: same path
Select find button
Give: AMLS
117
Enter
Select: AMLS
Select: AD check box (Direct sales)
Enter
Keep the cursor on AD
Select: assign button
Select: A1 (Cement division check box)
Enter & Save

Assign sales organization – Distribution channel – plant
Select find button
Give: AMLS
Enter
Select: AMLS
Select AMLP check box
Enter & Save
Define rules by sales area:
SPRO  enterprises structure  Assignment  Sales and distribution  Business area

account assignment  define rules by sales area
Give the sales organization: AMLS
Enter
118
For AMLS select rule 001 (Business area determination from plant/division
Save
Assign shipping point to plant
SPRO  enterprises structure  assignment  logistics execution  assign shipping

point to plant
Select find button
Give: AMLP
Enter
Select: AMLP
Select: AMSH (Hyderabad shipping point) check box
Enter & save
Define pricing procedure determination
SPRO  sales & distribution  Basic functions  pricing  pricing control  define
& Assign pricing procedures
Double click on define pricing procedure determination
Distribution channel: AD (Direct sales)
Division: A1 (Cement division)
Document procedure: A (Standard)
Customer pricing procedure: Select 1 (Standard)
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Pricing procedure: Select RVW01 (Standard)
Condition type: Select PRO0 (Price)
Save
Define tax determination rules:
SPRO  Sales & distribution  Basic functions  Taxes  define tax determination
rules
Tax country: select IN (India); sequence: 1

Tax category: Select MWST (Output tax)
Save
Creation of G/L master, sales local own goods (FS00)
Company code: AML
G/L account No: 300000 (Sales account)
Company code: AML
Enter
Change short text & G/L account long text to: Sales local own goods
Field status group: G029 (Revenue accounts)
Save
Valid from date: 01.04.2006 to 31.12.9999
Enter
120
Cost element category: 11 (Revenues)
Save
Assignment of accounts for automatic postings:
SPRO  sales & distribution  Basic functions  accounts assignment/costing 

Revenue account determination  Assign G/L accounts (T. Code: VKOA)
Double click on table: 001
Application area: Select V (Sales & distribution)
Condition type: Select KOFI
Chart of accounts: AML

Account assignment group for customer: select 01 (Domestic revenues)
Account assignment group for materials: Select 03 (finished goods)
Account key: select ERL (Sales revenues)

G/L account No: 300001 (Sales local own goods)
Save
Set up partner determination:
4 types of partners:
SP – Sold to party – fixed – Net modifiable

SH – Ship to party
BP – Bill to party
PY – Payee
Path: SPRO  sales & distribution  Basic functions  partner determination  set
up partner determination
Double click on set up partner determination for customer master
Double click on partners function folder
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Select: SP (Sold to party)
Double click on account groups – function assignment folder
Partner function: SP (Sold to party), enter: SH (AML); BP (AML2), PY (AML2)
Account group: AML2 (SD customers for AML)
Enter & Save
Double click on partner’s determination procedures folder
Give the partner determination procedure: AML
Name: AML (Partner determination procedure)
Save
Select: AML
Double click on partner functions in procedure folder
Give the partner function: SP (Sold to party)
Select not modifiable check box
Select mandatory function check box
Partner function: SH (Ship to party)
Select mandatory function check box
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Select: BP (Bill to party); select mandatory function check box
Select: PY (Payee); select mandatory function check box

Select: AML
Double click on partner determination procedure assignment folder
Account group: AML2

Enter
For AML2: Assign AML
Save
Assign shipping points:
SPRO  logistics execution  shipping  Basic shipping functions  shipping point

& goods receive point determination  assign shipping points
Shipping condition: 01 (As soon as possible)
Loading group: 0003 (Manual)
Plant: AMLP
Proposed shipping point: AMSH
Creation of customer master: (XD01)
Account group: Select SD customers for AML
Company code: AML
Division: A1
123
Enter
Give the customer name: VBC Industries Ltd
Country: IN (India)
Region: AP
Select company code data button
Reconciliation A/C: 200110 (Sundry debtors)
Sort key: 031
Select payment transactions tab
Terms of payment: 0001

Select sales area button
Customer pricing procedure: Select 1 (standard)
Select: shipping tab
Delivery priory: Select 02 (Normal)
Shipping conditions: Select 01 (As soon as possible)
Select: Billing document tab
Select: Price determination check box
Inco terms: select EXW (From plant)
Account assignment group: Select 01 (Domestic revenues)
Output tax classification: select 1 (Liable for tax)
Save
Creation of finished goods material master: (MM01)
Give the material no: AMLFG
Industrial sector: Mechanical engineering
Material type: Finished product
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Press: select views button
Select: Basic data
Select: Sales: sales Org data1
Select: sales: sales org data2
Select: Sales: general/plant data
Select: MRP
Select: General/plant/data/storage
Select: accounting 1
Enter
Give the description: Finished product
Base unit of measurement: Kg
Gross weight: 1000 Grams
Select: Sales: sales organization data1 tab
Division: A1
Tax classification: Select1 (Full tax)
Select: Sales: sales organization to tool tab
Account assignment: select 03 (Finished goods)
Select: sales: general/plant
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Availability check: Select KP (No check)
Transportation group: 0003 (Container)
Loading group: 0003 (Manual)
Select: MRP1 tab
MRP Type: Select ND (No planning)
Select: accounting 1 tab
Valuation class: AML2 (Finished products)
Price control: Select S (Standard price)
Standard price: 400/-

Select save button (or) (Ctrl + s)
Creation of condition types:
Logistics  sales & Distribution  Master Data  conditions  select using condition
type  Create (VK11)
Give the condition type: PR00 (Price)
Select: Key combination button
Select: Material with release status radio button

Enter
Give the material No: AMLFG
Amount: 500/-
Valid on: 01.04.2006 to 31.03.2007

Save (or) (ctrl +s)
Select back arrow
Give condition type: MWST (Output tax)
Select key combination button
Select domestic taxes radio button
Enter
126
Valid on 01.04.2006 to 31.12.9999
Tax classification customer: 1 (Liable for Tax)
Tax classification for material: 1
Tax code: Select AO
Save
Profitability analysis (CO – PA)

Co – Controlling
PA – Profitability analysis
This is used to view profitability for number of parameters at a time.
If the client want to view profitability
Product wise/customer wise/sales order wise/plant wise/sales organization wise
- This is called data cube

- This is a reporting tool
- Product costing is based on the based on data flown
from MM, PP, FI, CO
Here we have
- Account based/costing based/both wise profitability

analysis
- Here we create operating concern
Operating concern can be
- equal to controlling area (or) above controlling area
Controlling area can be equal to company code (or) above company code
Structure: company code = controlling area = operating concern
127
We are using called data structure
Data structure
| |
Characteristics value fields
↓ ↓
Sales order
Customer
Product Sales
Sales organization Cost of goods sold
Plant Net profit
Sales employee
Industry
Profitability segment:
In consist of  system defaulted characteristics
Client required characteristics
Example of client required characteristics:
1. Sales employee wise profitability

2. Industry wise profitability
Data flow in profitability analysis
SD to FI
a) Enquiry & quotation

b) Sale order: customer, product plant, sales organization, quantity, price, delivery
terms & payment terms
c) Delivery: with out post goods issue/with post goods issue
d) Billing
Define operating concern:
SPRO  controlling  profitability analysis  structures  define operating concern

 Maintain operating concern.
Operating concern: 1234 (It should be 4)
Give the description: Operating concern for AML
128
Select costing based check box, actual based check box
Select attributes tab
Give the operating concern currency: INR
Select company code currency check box
Fiscal year variant: V3
Save
Select data structure tab
Select create button under data structure
Select the characteristic: KNVTNR (Sales employee)
Select left arrow
Select value fields tab
Select: VV010 (Revenues)
Select: VV140 (Cost of goods sold)
Select left arrow
From the menu select data structure  save

From the menu select data structure  Activate
Select back arrow
Select ‘yes’ button for the message to generate the operating concern environment.
Define profitability segment characteristics: (In segment level characteristics)
Path: same path (T. Code: KUQ3)
Give the operating concern: 1234
Enter
For product & Customer
Select costing base & Account base radio butt
129
Save
Assign controlling area: to operating concern:
Path: SPRO  enterprises structure  assignment  controlling  assign controlling

area to operating concern
Enter: for controlling area: AML, assign operating concern: 1234
Save
Define No. ranges for actual postings:
SPRO  controlling  profitability analysis  flows of actual values  initial steps 

define number ranges for actual postings (T. Code: KEN1)
Give the operating concern: 1234
Select generated groups check box
From the menu select interval  maintain
Give the No from: 1 to 999999999

Save
Maintain assignment of SD conditions to Co – PA value fields
Path: SPRO  controlling  profitability analysis  flows of actual values  transfer

of billing documents  assign value fields
Double click on maintain assignment of SD conditions to CO-PA value fields (T. Code:
KE41)
Open one more session & set operating concern idea
130
Path: SPRO  controlling  profitability analysis  structures  set operating
concern
Give the operating concern: IDEA
Enter
Use the transaction code: KE41
Come to the 1st session
Give the condition type: PR00 (Rice)
Select value fields – VV010 (Revenues)
Select VPRS (Costs)

Select value fields – VV140 (Cost of goods sols)
Save
Maintain PA (Profitability analysis) structure for direct postings:
SPRO  controlling  profitability analysis  flows of actual values  direct postings

from FI/MM  maintain PA transfer structure for direct postings (T. code: KET2)
Select the structure: FI (Financial accounting to CO – PA)
Double click on assignment lines folder
Select: 20 (Direct revenues from FI)
Give the cost element: from 300000 to 399999
Double click on value fields’ folder
Qty/value  select value field
Fixed variable  select 1 (Fixed amounts)
Value fields  select VV010 (Revenue)
Save
131
Double click on assignment lines folder
Select assignment: 10 (Direct costs from FI)
Give the cost element: from 400000 to 499999
Double click on value fields’ folder
Qty/value  select value field
Fixed variable  select 1 (Fixed amounts)
Value fields  select VV140 (Cost of goods sold)
Save
Activate profitability analysis:
Path: same path (T. Code: KEKE)
Enter
For controlling area: DRL – Active status select a4 (Component active For both types of
profitability analysis)
Save
Sale order creation:
Path: Logistics  sales & distribution  sales  order  create (T. Code: VA01)
Give the sales organization: AMLH
Division: A1
Order type: OR (standard order)
132
Enter
Sold to party: VBC Industries Pvt. Ltd
Give the P. O. order: 5678
Required delivery date: 03.12.2006
Delivery plant: AMLP
Payment terms: 0001
Item: 10;
Material No: AMLFG
Order qty: 1 kg
Enter
Ignore the messages, press enter
Select item 10
From the menu select  go to item condition
Select: Shipping tab
From the menu select edit  Incompletion log
Note: Sales order No: 8209
Production receipt with out production order:
Path: Logistics  Materials management  Inventory management  Goods

movement  goods receipt  Other (MB1C)
Plant: AMLP
133
Enter
Give the material type: AMLFG
Qty: 20 Kegs
Save
From the menu select other goods receipts  display
Enter
Select accounting document No:
Account No Description INR
200122 Inventory FG 10000 – DRLFG1 – DRL1 (BSX)

300201 Inc/Dec in stock FG 10000 – DRLFG1 – DRL1 – (GBBZAX)
↓
Qty & standard price
Delivery:
Logistics  sales & Distribution  sales  order  subsequent functions  outbound

delivery (VL01N)
Give the shipping point: AMLS
Give the sales order number: 8209 (What it is created in sales order)
Enter
Actual GI date (Goods issue date): 03.12.2006
Select item: 10
Select picking tab
Pick quantity: Enter 1
Select post goods issue button
134
From the Menu select out bound delivery  display
Enter
From the Menu select environment  Document flow
Keep the cursor on goods issue
Select display document button
Select accounting document No:
200122 Inventory FG 500  DRLFG1  DRL1 – (BSX)

300201 Inc/dec in stock FG 500  DRLFG1  DRL1 – GBBVAY
Billing document:
Same path: (VF02)
Select the delivery document No: 11341
Enter
Save
From the menu select billing document  display
Select accounting button
Report generation through report painter
Define forms
SPRO  Controlling  Profitability analysis  information system  report

components  define forms  define forms for profitability reports
Double click on create form
Give the form name: AML
Description: AML Form (T. Code: KE34)
135
Select two axes (Matrix) radio button
Select operating concern currency radio button
Enter
Double click on: Row 1
Select value field with characteristics radio button
Enter
Value field select: VV01 (Revenue)
Select: Confirm button

Double click on: Row2
Select value field with characteristics radio button
Enter
Value field select: VV140 (Cost of goods sold)
Select: Confirm button
Double click on: Row3
Select formula radio button
Enter
Select Y001 (Revenue)
Select Minus (-) button
Select Y002 (Cost of goods sold button)
Enter
Short description: Net profit
Select copy short text button
136
Enter
Double click on column1
Select characteristics radio button
Enter
Select from the available characteristics plan/actual indicator
Select left arrow
For plant/actual indicator: Select 0 (Actual data)
Save
From the menu select edit  General data selection  General data selection
From the available characteristics select record type, select period/year
Select left arrow
For record type: select from column B to column select F (Billing data)
For period/year
For from column: Select variable on/off check box
Local variable: enter1
Enter
For to column: Select variable on/off check box
Give the local variable: 2
Enter
From the menu select extras  Variables  variables of definition
1- description: From period/year

2- description: To period/year
137
Enter & Save
Create profitability report:
Same path
Double click on create profitability report
Transaction code: KE31
Give the report name: AML Profit
Description: AML Profitability
Select: Report with form radio button
Give the form name: AML

Select customer, product, plant, select sales organization from characteristics list
Select left arrow
Select output type tab
Select: Class drill down radio button
Select available on selection screen check box
Save
Select execute button
Give from period/year: 01.2006
To period/year: 12.2006
Execute
Ignore the message, select ‘yes’ button
To view product wise:
From the menu select navigate  switch drill down
138
Double click on product
Product costing
This is used for valuation of inventories like work in process & finished goods.
- Data is flow from MM, PP, FI&CO modules

- Product costing made easy- sap labs
- When we will take production – It will be standard cost
- In the month ending we will knows the actual cost
- The differences will be settle variances of accounts
Data flow in product costing:
Example: Product AMLFG1
Cost sheet AML finished goods
Raw material XXX (Qty from BOM * Rate from material master
Raw material overheads XXX (10% of raw material)
Production cost XXX (hours required * machine hour rate)
---------
Cost of goods manufacturing XXX
(COGM)
Admn& selling& dist exp XXX
------
Cost of goods sold XXX
139
Sales budget  Production budget
Sales budget: Make to order

Make to stock
Production budget: Material requirement plan

Overheads planning
MM
Material master
Accounting view
Raw material (AMLRM1) – Moving average price – 75/-
(AMLRM2) – Moving average price – 100/-
PP: Bill of material (BOM) required for production
AMLRM1 – 1kg
AMLRM2 – 1kg
Dept A Dept B Dept C Dept D  Work centre in PP
 X   (Finished goods (AMLFG)
Finished product (AMLFG) process flow A  C  D (Routing)
Salaries – 200000
Wages - 500000
Rent - 20000
-----------
720000
Machines – 100 Machines
Machine hours = 100 * 24 hours * 30 days = 72000 machine hours
Machine hour rate = 720000/72000 = 10/- per hour
To produce finished product AMLFG say 5 machine has = 5 * 10 = 50
140
Creation of secondary cost elements:
1. Overhead cost element

2. Activity cost element
Use the transaction code: KA06
Use the cost element: 1100000
Valid from: 01.04.2006 to 31.12.9999
Enter
Give the name: RM overhead rate
Description: RM overhead rate
Cost element category: select 41 (Overhead rate)
Save
One more cost element: 1200000
Valid from: 01.04.2006 to 31.12.9999
Enter
Give the name: Activity cost element
Description: Activity cost element
Cost element category: select 43 (Internal activity allocation)
Save
Creation o f activity type: (Called machine hour)
Accounting  controlling  cost centre accounting  master data  activity type 

individual processing  create (KL01)
Activity type: AML
Valid from: 01.04.2006 to 31.12.9999
Enter
141
Name: Machine hour
Description: Machine hour
Activity unit: Select H (Hour)
Cost centre categories: Select * (All cost centre categories)
Enter
Activity type category: select 1 (Manual entry, manual allocation)
Allocation cost element: select 1200000
Save
Creation of 2 cost centers: (KS01)
Give the cost centre: Dept G
Valid from: 01.04.2006 to 31.12.9999
Enter
Change the name to dept G
Description: Cost centre dept G
Other fields are common
One more cost centre: Dept H
Valid from: 01.04.2006 to 31.12.9999
142
Enter
Change the name to dept H
Cost centre: Dept H
Cost centre category: Select 9 (Allocation cost centre)
Save
Creation of cost centre group: (KSH1)
Give the cost centre group: AML Prod
Enter
Give the cost centre group: AML prod
Select insert cost centre button
Give the cost centre: Dept G
Define overhead keys:
SPRO  Controlling  product cost controlling  basic settings for material costing 
overhead  define overhead keys
Overhead key name: AML
Description: AML Overhead key
Save
143
Define overhead group:
Same path
Valuation area: AMLP
Overhead group: AML
Overhead key: AML
Name of overhead group: Overhead group for AML
Save

Define calculation bases:
SPRO  controlling  product cost controlling  product cost planning  basic

settings for material costing  overhead  costing sheet components  define
calculation bases
Base: A1
Name: Raw materials

Select: A1
Double click on details folder
Enter
From cost element: 400000 to 400099
Save
144
Base: A2
Name: Production cost,
Save
Select: A2
Enter
: 400500
: 1200000
Define percentage overhead rates:
Path: same path
Select: new entries button
Overhead rate: A3
Name: Raw material overhead rate
Dependency: Select DO10 (Overhead type/H key)
Save
Select: A3
Valid from: 01.04.2006 to 31.03.2007
145
Overhead type: Select 2 (Planned overhead rate)
Overhead key: AML
Percentage: 15%
One more:
Valid from: 01.04.2006 to 31.03.2007
Overhead type: Select 1 (Actual overhead rate)
Overhead key: AML

Percentage: 10%
Save
Define credits:
Same path
Give the credit key: A4
Name: Raw Material credit key
Save
Select: A4
Enter
Valid to: 31.03.2007
Cost element: 1100000 (Raw material overhead rate)
146
Fixed percentage: 100%
Cost centre: Dept H

Save
Example:
RM1 – Handling charges Dr - Dept H – 3000

To Bank 3000
RM2 – Handling charges Dr – Dept H – 7000
To Bank 7000
Dept H
Handling 10000 | 3000
Charges | 7000
(7000 + 3000) | -------
10000
Production 1 production2
RM cost 30000 RM Cost 70000
10% of cost 3000 10% of cost 7000
Define costing sheet:
SPRO  Controlling  product cost controlling  basic settings for material costing 
overhead  define costing sheets
Costing sheet: AML
Description: AML costing sheet
Select: AML
Double click on costing sheet rows folder
Give Row: 10, Basic: A1 (Raw materials)

Row: 20, overhead rate: A3 (Raw material overhead rate)
From: 10 to Row 10: Credit: A4
Row: 30, Base: A2 (Production cost)
Row: 40, Description: Cost of goods manufacture
From Row 10 to Row 30
Assign costing sheet to costing variant:
147
SPRO  controlling  Product cost controlling  product cost planning  material
cost estimate with quantity structure  define costing variants
Transaction code: OKKN
Select costing variant: PPL1 (Standard cost estimate (Material))
Select valuation variant button
Select create button (Beside valuation variant/plant)

Select back arrow
Select valuation variant: 001 with plant: AMLP
Select overhead tab
Give the costing sheet: AML – costing sheet

The costing sheet: AML – costing sheet
Save
Define cost component structure:
SPRO  controlling  product cost controlling  product cost planning  basic

settings for material costing  define cost component structure
Select structure: 01
Double click on: Cost components with attributes folder
Select: cost component 10 (Raw materials)
Double click on assignment cost components – cost element interval folder
148
Cost component structure: 01
Cost element: 010 (Raw materials)
Save, ignore the warning message, and enter
Double click on cost components with attributes folder
Select component: 80 (Material overhead)
Double click on assignment cost component – cost element interval
Select: new entries button
From cost element: 1100000 (Overhead rate)
Cost component: 080 (Material overhead)
Save
Double click on cost elements with attributes folder
Select cost component: 50 (Production machine)
Double click on assignment cost component – cost element interval folder
Cost element structure: 050
149
One more

Save
Double click on cost element structure folder
For ‘0’ select activate check box
Determine person responsible for work centre:
Path: SPRO  production  Basic data  work centre  general data  determine
person responsible
Give the responsible: Mr. A
Save
Define MRP controller: (MRP: Material requirement planning)
SPRO  production  material requirements planning  master data  define MRP

controllers
Give the plant name: AMLP
MRP controller: B
150
Description: Mr. B
Save
Define floats (Scheduling margin key) (Floats: Cushion period)
Path: SPRO  production  materials requirement planning  planning  scheduling

& capacity parameters  define floats (Schedule margin key)
Give the plant name: AMLP
Schedule margin key: AML
Opening period: 2 days
Float before production: 2 days
Float after production: 2 days
Release period: 2 days
Save
Define production scheduler:
SPRO  production  shop floor control  master data  define production scheduler
Plant: AMLP
Production scheduler: C
Production scheduler name: Mr. C
Planning cost centre wise (KP06)
151
Version: 0
From period: 9 to 9
Fiscal year: 2006
Cost centre: Dept G
Next page
Cost centre: 400100 (Salaries)
Select over view screen button
Give plan fixed cost: 720000
Save
Planning for machine hours:
Accounting  controlling  cost centre accounting  planning  activity ad put/prices

 change (KP26)
Version: 0
Year: 2006
Cost centre: Dept G
Activity type: AML
Give plan activity 72000 (100 machines * 3 shifts * 30 days)
Save
Machine down rate calculation:
Accounting  controlling  cost centre accounting  planning  allocations  price

calculation (KSPI)
152
Select cost centre group radio button
Give the cost centre: AMLPRODN
Version: 0
Fiscal year: 2006
Execute
Creation of material master: (MM01)
Give the material number: AMLRM2
Industry sector: Mechanical engineering
Material type: Raw material
Press: select use button
Select: Basic data, purchasing, general plant data/storage one, accounting
Give the plant: AML
Enter
Give the description: Raw material
Basic unit of measurement: Kg
Material group: Chem
Select purchasing tab
153
Purchasing group: AML
Select: Accounting1 tab
Price control: V
Moving price: 100
Save
Creation of finished goods master (MM01):
Material No: AMLFG1
Industrial sector: Mechanical engineering
Material type: Finished product
Select: Basic data1, MRP1, MRP2, work scheduling, general plant data/storage1,
Accounting1, costing1.
Plant: AMLP
Enter
Give the description: Finished product1
Basic unit of measurement: Kg
Select: MRP1 tab
154
MRP type: select PD (MRP)
MRP controller: Select B (Mr. B)
Lot size: select Ex (Lot for lot order quantity)
Select MRP2 Tab
In house production: 0 days
Schedule margin key: AML
Select work schedule time tab
Ignore the warning message, enter
Production: Scheduler C
Select accounting1 tab
Price control: S (Standard)
Give the standard price: 300/-
Select costing1 tab
Overhead group: Select AML
Availability check: Select KP (No check)
Save
Creation of Bill of material:
Logistics  production  master data  bills of material  bill of material  material

BOM  Create (CS01)
Give the material No: AMLFG1
Plant: AMLP
BOM usage: Select 1 (Production)
Enter
155
Give the component
For item 10: AMLRM1; Qty: 1 Kg
Item 20: AMLRM2; Qty: 1
Save
Creation of work centre:
Logistics  production  master data  work centers  work centre  create (CR01)
Work centre: Dept G
Work centre category: select 0001 (Machine)
Select basic data button
Give the description: Work centre Dept G
Usage, select 009 (All task lists types)
Standard value key: SAP1 (Normal production)
Select costing tab
Start date: 01.04.2006
Cost centre: Dept G
For activity machine: Give the activity type AML
Performance unit: H (Hour)
Formula key: SAP002 (Production machine types)
Save
Creation of routing:
Logistics  Production  master data  routings  routings  standard routings 

create (CA01)
156
Plant: AMLP
Enter
Usage: select1 (Production)
Status: Select 4 (Release (General))
Select operation button
For operation at tab give the work centre: Dept G
Control key: Select PP01 (In house production)

Select operation: 10 and double click
Machine: standard values: 5
Unit: H (hours)
Save
Creation of cost estimate with quality structure:
Accounting  controlling  product cost controlling  product cost planning 

material costing  cost estimate with quantity structure  create (T. Code: CK11N)
Give the material: AMLFG
Plant: AMLP
Costing variant: PPC1 (Standard cost estimate)
Enter
Give the costing date from: 08.12.2006 Costing date to 31.12.9999
Qty structure date: 08.12.2006
Valuation date: 08.12.2006
Enter
Standard cost should be: 251.25
Cost sheet
RM – AMLRM1 – 75
- AMLRM2 - 100
157
------
175.00
RM overhead 15% 26.25
Production costs
(5*10) machine hours 50.00
---------
251.25
From the menu select: Cost  Display cost components
Enter
Marking & Releasing

Display material master:
Logistics  materials management  material master  material  display  display

current (MM03)
Give the material number: AMLFG1
Select costings2, view
Enter
Marking, updates future price – 09.2006 Price – 251.25

- 09.2006Price – 251.25
Release – updates current price – 251.25
Use of marking & Releasing is  for the next month if the product
Value is increased it is estimated in the current month and applicable in the next month
158
Path for Marking & Releasing:
Accounting  controlling  product cost controlling  product cost planning 

material costing  price update (T. Code: CK24)
Give posting period/fiscal year: 9.2006
Company code: AML
Plant: AMLP
Material: AMLFG1
Select test run check box
Select marking allowance button
Give the costing variant: PPC1 (Standard cost estimate)
Save
Select back arrow
Execute
Select: AMLFG1
Select costing2 tab
Select release button
Executes
Select: AMLFG1
Select: costing 2 tab
Actual costing: (check costing variants for manufacturing orders)
159
SPRO  controlling  product cost controlling  cost object controlling  product
cost by order  manufacturing orders  check costing variants for manufacturing orders
(PP) (T. Code: OPL1)
Select costing variant: PPP1 (Production order plan)
Select create button beside valuation variant/plant
In Plant: AMLP
Save
Select back arrow
Select valuation variant: 006 (with AMLP)
Select overhead tab
Costing sheet: Assign AML costing sheet
Save
Select back arrow
Select: Costing variant: PPP2 (Production order actual)
Select create button beside valuation variant/plant
In plant: Give AMLP
160
Select overhead tab
Save
Select back arrow
Select: 007 with AMLP
Select: AML closing sheet
Save
Define goods received valuation for order delivery:

cost by order  define goods received valuation for order delivery
Valuation area: AMLP
Valuation variant: 007 (Production order – Actual)
Save
Define results analysis keys:

cost by order  period end closing  work in process  define results analysis keys (T.
Code: OKG1)
Result analysis key: FERT (WIP calculation for production orders)
Save
Define cost element for WIP calculation:
161
Same path
Double click on create cost element
Transaction code: KA06
Give the cost element: 1300000 (Secondary cost element)
Valid from: 01.04.2006 to 31.12.9999
Enter
Name: order/project result analysis
Description: order/project result analysis
Cost element category: 31 (Order/project results analysis)
Save
Valid from: 01.04.2006 to 31.12.9999
Give the reference cost element: 1300000
Enter & Save
Valid from: 01.04.2006 to 31.12.9999

Enter & Save
Valid from: 01.04.2006 to 31.12.9999
162
Enter & Save
Valid from: 01.04.2006 to 31.12.9999
Enter & Save
Creation of 2 G/L accounts: (FS00)
1. work in process – under current assets, loans & advances

2. increase/decrease in stocks WIP under increase/decrease of stocks group
Transaction code: FS00
Company code: AML
Give the G/L account No: 200121 (Inv. Raw material local)
Company code: AML
Enter
Change short text & long text to: work in process
Deselect post automatically check box
Save
163
Company code: AML
Give the G/L account No: 300200 (Increase/decrease in stocks)
Company code: AML
Enter
Change short text & long text: Increase/decrease in stocks in WIP
Save
Define results analysis versions:

cost by order  period and closing  work in process  define results analysis versions
Select: AML
Technical result analysis cost element: 1300000
Save
Define valuation method: (Actual Costs)
Same path
Select actual costs button
Result analysis version: 0
164
Result analysis key: FERT
Enter
Save
Define line ID’s:
Same path
Select line ID: ABR, EK, EL, & FK for controlling area 1000
Give your controlling area: AML for all the 4 items

Enter & Save
Define assignment:
Path: same path
Select EK (Direct costs) for controlling area: 1000
In the masked cost element enter: 00004000 + +
Enter & Save
Select: EL for controlling area: AML
Masked cost element: enter 00003 + + + +
Enter
Select line ID - EK (production costs) for controlling area: 1000
165
Masked cost element: enter 00004001 + +
Enter
Select the item what we are created
Give the mask cost element: 00004002 + +
Enter
Select the both items what we are created

For 1st one mark cost element give: 00004005 + +
For 2nd one give mask cost element give: 0001 + + + + + +
Enter & save
Define update:
Path: same path (T. Code: OKGA)
Version: 0
Line ID: EF (Direct costs)
Category: Select K (Costs)
Work in process cost element: 1300001
Results: 1300002
Version: 0
Line ID: FK (Production costs)
166
Category: K (Costs)
WIP: 1300003
Results: 1300004
Version: 0
Line ID – ABR
Category: A (Settled cost)
Save
Define posting rules: for settling work in process:
Path: same path (T. Code: OKG1)
Company code: AML
Result analysis version: 0
Result analysis category: WIPR (Work in process with requirement to capitalized)
P&L account: 300201 (Increase/decrease in stock WIP)
Balance sheet account: 200123 (Work in process balance sheet accounts)
Save
Define results analysis versions:
Path: same path (T. Code: OKG9)
Select controlling area: AML
167
Select transfer to financial accounting check box
Select save button (or) (Ctrl + s)

Define variance keys:

cost by order  period end closing  variance calculation  define variance keys (T.
Code: OKV1)

Variance key name: AML
Description key: Variance key for AML
Define default variance keys for plants:
Same path
Enter
For AMLP plant assign variance key: AML
Save
Define target costs versions:
Path: same path
Select target cost version for controlling area: 1000
Description: Target cost version for AML
168
Enter & Save
Create allocation structure:

cost by order  period end closing  settlement  create allocation structure.
Text: AML allocation structure for product costing
Select: A4 (What we are created)
Double click on assignments folder
Give the assignment: AML
Text: overheads
Save
Select: AML
From cost element: 400000 to cost element 499999
Save
Double click on settlement cost elements folder
Receiver category: select ord (order)
Settlement cost element: 1000001
169
Save
Create settlement profile:
Same path
Settlement profile: AML1
Description: Settlement profile for AML
Select: To be settled radio button
Select % settlement check box
Select equivalence number check box
Select amount settlement check box
Under valid receivers for order settlement required
Maximum number of distribution: 999
Residence time 12 months
Save
Assign Co number range interval for the process
KZPI (Actual overhead periodic)

RKL (Actual activity allocation)
Transaction code: KANK
Double click on KZPI
Double click on RKL
Select co document No. range intervals for AML check box
170
Save
Maintain exchange rate type for M & P for INR to EURO:
M – Average rate
P – Cost planning
Transaction code: OB08
Exchange rate type: M
Valid from: 01.04.2006
From currency: INR
To currency: EURO
Direct quotation: 0.2
Save
Exchange rate: P
Valid date: 01.04.2006
From currency: INR to Currency: EURO
Direct quotation: 0-2
Creation of G/L account: (FS00)
Production order difference account
Company code: AML
171
G/L account No: 400200 (Conversion charges)
Company code: AML
Enter
Change short text & G/L text to: production order differences
Select create/Bank/interest tab
Field status group: G014 (MM Adjustment Accounts)
Save
One more account
Company code: AML
Give G/L account No: 100500 (Outstanding expenses)
Company code: AML
Enter
Change short text & G/L text to: stock taking account
Select create/Bank/interest tab
Field status group: G049 (Manufacturing costs account)
Deselect open item management check box
Save
Select the G/L account: 300200 (Increase/decrease stock FG)
172
Company code: AML
Field status group change to: G036
Save
Valid from: 01.04.2006 to 31.12.9999
Enter
Cost element category: select 22 (External settlement)
Save
Assignment of accounts for automatic postings:
Transaction code: OBYC
Double click on PRD (Cost price differences)
Give your chart of accounts: AML
Save
Account Number: 400201
Save
Select back arrow
Double click on GBB
General modification: AUA
173
Valuation class AML2
Account No: 300200
General modification: BSA
Account: 100599 (Stock taking account)
Save
Define order type dependant parameters:
SPRO  production  shop floor control  master data  order  define order type
dependant parameters (T. Code: OPL8)
Select order type: PP0K (For plant 1000)
Enter & Save
Define scheduling parameters for production orders:
Up to shop floor control the path is same
Operations  scheduling  define scheduling parameter for production orders (T.

Code: OPU3)
Select order type: PP01 (for plant 1000)
Change the plant to AMLP
Enter & Save
174
Define checking control:
Operations  availability check  defines checking control (T. Code: OPJK)
Select order type: PP02 (with business function) &

Order type: PP01 with business function 2 for plant 1000
Give your plant: AML1

Enter
Once again give your plant: AMLP
Enter & Save
Define confirmation parameters:
Operations  confirmations  Define confirmation parameters
Transaction code: OPK4
Select order type: PP010 (for plant 1000)
Enter & Save
Creation of production order:
Path: Logistics  production  production control  orders  create  with material

(T. Code: COOK)
Give the material no: AMLFG1
Production plant: AMLP
Planning plant: AMLP
175
Order type: PP01 (Standard production order)
Enter
Total quantity – 10kgs
Start date & Finished date: 10.12.2006

Select cost order button
Ignore the warning messages, enter
From the menu select go to  analysis
Select back arrow
Select release order button
Save
Note down order No: 60002846
From the menu select order  display
Transaction code: CO03
Enter
Select assignment tab
Note down the reservation number: 17516
AML Raw material to receipt by way of opening stock
Path: Logistics  materials management  Inventory management  gods movement

 goods receipt  other (MB1C)
Plant: AMLP
Enter
Give the material No: AMLRM2
Give the qty: 100Kgs
Save
From the menu select other goods receipts  display
Enter
176
89 - 200121 – Inventory RM local -10000 – AMLRM2 – AML – BSX
91 – 100599 – Stock taking A/C – 10000 – AMLRM2 – AML – AMLTGBB BSX
10000: Qty & rate as per material master
Goods issued for production order
Path: Logistics  materials management  inventory management  goods movement

 goods issue (T. Code: MB1A)
Select to reservation button
Give the reservation number: 17516
Enter
Give actual consumption AMLRM1 – 15kgs

AMLRM2 – 15kgs
Save
From the menu select goods issue  display
Enter
Work in process calculation:
Path: Accounting  controlling  product cost controlling  cost object controlling 

product cost by order  period end closing  single functions  work in process 
individual processing  calculate (KKAX)
Give the order: 60002845
WIP to period: 9 (December)
Fiscal year: 2006
RA (Result analysis) version: select 0
Execute
177
Select back arrow and deselect check run and execute
Settlement of work in process to accounts:
Up to period end closing the path is same
Single functions  settlement  individual processing (T. code: K088)
Give the order No: 60002845
Fiscal year: 2006
Execute
Select back arrow
Execute
Select detail list button
50 – 300201 – Inc/Dec in stock WIP – 2625 – P & L A/C
40 – 200123 – Work in process – 2625 – Balance sheet
Actual overhead calculation
Path: up to period end closing the path is same
Single functions  overhead  individual processing (KGI2)
Period: 9
Fiscal year: 2006
178
Select dialog display check box
Execute
Select back arrow
Execute
Confirmation of production order:
Logistics  production  production control  confirmation  enter  for operations

 time ticket (CO11N)
Give the order number: 60002845
Operation: 10
Confirmation type: select final confirmation
Yield: 10kgs
For activity2: give the qty: 60
Unit of measurement: H
Save
Production receipt against production order
Logistics  materials management  inventory management  goods movement 

goods receipt  for order (MB31)
Give the document date & posting date: 21.12.2006
Movement type: 101
Give order No: 60002845
Plant: AMLP
179
Enter, ignore the warning message and press enter
Save
From the menu select goods receipt  display
Enter
To make order technically complete (IECO)
Logistics  production  production control  order  change (CO02)

Enter
To close the order from the menu select functions  restrict processing  technically
complete
Save
Assign variance key in material master (MM02)
Plant: AMLP
Enter
Select costing 1 tab
Assign variance key: AML
Save
Calculation of variances:
Up to period end closing the path is same
Single functions  Variances  individual processing (KKS2)
Give the order: 60002845
180
Period: 9
Fiscal year: 2006
Execute
Select back arrow
Deselect run check box
Execute
Open one more session with (T. Code: CO03) (Order display)

Enter
From the menu select go to  costs  analysis
Calculation of work in process once again for December (KKAX)
Give the order number: 6002845
WIP period: 9
Fiscal year: 2006
RA version: 0
Execute
Select back arrow
Execute
Settlement of work in process of accounts (K088)
Fiscal year: 2006
181
Execute
Select back arrow

Execute
Select detailed list button
Select accounting document no
91 – 300200 – Inc/Dec in stock FG1 – 975 – (AMLFG1 – AML2 – GBBAVA

83 – 400201 – Prod. Order difference – 975 – AMLFG1 – AML2 – PRD
40 – 300201 – Inc/Dec in stock WIP – 2625
50 – 200123 – work in process.
THE END
182

Controlling

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Controlling (CO)

Controlling is used for internal reporting

1. Cost element Accounting

2. Cost centre Accounts: To view department wise cost

3. Internal orders: To view costs for a specific tasks

6. Profitability analysis: To view profitability for number of parameters at a time like

This is called data cube

Basic settings for controlling:

FI organization structure Co. organization structure

Controlling area at company code level, cost element is assigned to Business

Company = Controlling area

(Controlling area at company level)

Maintain controlling area:

Path: SPRO  Controlling  General controlling  Organization  Maintain

Double click on maintain controlling area (T. Code OKKP)

Select new entries button

1st scenario: company code: AML

Give controlling area: AML

Name: Controlling area for AML

Cost centre standard hierarchy: AMLHIER (AML Hierarchy)

Select save button (or) (ctrl + s)

Select create request button

Short description: Co. Customization for AML

Press enter once again to saving the request

Double click on Activate components/control indicators folder

Select new entries button

Fiscal year: 2006

For the field cost centre: select component active

Select activate type check box

Order management: select component active

Select profit center check box

Select save button (or) (ctrl + s)

Double click on assignment of company codes folder

Select new entries button

Select the company code: AML

Select save button (or) (ctrl + s)

1. Co. documents through posting from FI document: Controlling through posting of

2. Report Co. line items (RKU3)

Ex: Wages Dr Dept A 100000

2) Wages A/C Dr 600000

After Posting (repost to CO items) (RKU3)

We transfer 600000 to various cost centers (or) dept.

600000: 1) Dept A 100000

How we shown the total transaction amount transferred to department wise

4) Planning Primary Costs (RKP1) (Budgeting)

Maintain Number Ranges for controlling document (same path)

(Transaction Code KANK)

Give the controlling area: AML

Select Maintain group’s button

From the Menu select group  Insert

Text: Co. document No. range intervals for AML

From No: 1 to 100000

Double click on COIN (Co. through postings from FI)

Double click on RKU3 (Repost Co. line items)

Double click on RKU1 (Reposts costs)

Double click on RKP1 (Planning Primary cost)

- Planning for whole year (original Budget) – 0

Here actual are compared with original/revised (or) re revised budgets

Path: Same Path