SAP CONTROLLIN

G AND COST

CENTER ACCOUNTIN

G(CO-CCA)

Overview of SAP Controlling Module

The Controlling (CO) component of SAP R/3 system contains all accounting functions necessary for effective controlling for businesses. Every organization normally have an external and internal accounting viewpoints. The external viewpoints is represented by Financial Accounting (FI) component and Controlling (CO) represents the internal accounting viewpoint. CO component of SAP system offers a broad selection of functional tools that can be used to provide management accounting information that are useful for management decision making. Do remember that Financial Accounting and Controlling are independent components of the SAP system. The data flow from the CO component to FI component takes on a regular basis.

Cost Center Accounting determines where costs are incurred in the organization. To achieve this aim, costs are assigned to the sub areas of the organization where they have the most influence. By creating and assigning cost elements to cost centers, you not only make cost controlling possible, but also provide data for other application components in Controlling, such as Cost Object Controlling. You can also use a variety of allocation methods for allocating the collected costs of the given cost center/s to other controlling objects.

SAP CONTROLLING AND COST CENTER ACCOUNTING CONCEPT

Concept of Over head cost controlling

Over head cost management

CO – CCA Master Data

Concept of Cost element and GL

Cost Center

Cost Center Activity Type Statistical Key

Figure Internal Order Actual Expense /

Revenue Posting Period end closing Reporting

Profit Center Accounting (EC-PCA)

A profit center is a management-oriented organizational unit used for internal controlling.For instance, you may treat each of your product group as profit center in the system. This enables you to monitor the revenues and costs attributable to each product group. You can do an evaluation on each profit center; profit and loss and balance sheet.

Profitability Analysis (CO-PA)

The profits and contribution margins for market segment of a company can be analyed using Profitability Analysis application component of SAP.

The objective of COPA is to support sales, product management, and corporate wide planning and decision making, using an external view from a market oriented perspective.

Controlling: Controlling provides you with information for management decision-making. It facilitates co-ordination, monitoring and optimization of all process in an organization.

Features of Controlling: Cost Center Accounting, Activity Based Accounting, Internal Orders, Product Costing, & Profitability Analysis.

Controlling Area: Organization unit that represents a closed system Used for accounting purposes.

You can assign one or more company codes to one controlling area. If you assign more than one company code to one controlling area, then you need to note the following.

1. Consistent Chart of a/c’s (Treat each cost element in all company codes in same way).

2. The Operative fiscal year variants in the company codes must match the fiscal year variant in controlling area.

3. You should execute period end closing in controlling for all company codes at same time.

4. The system only post reconciliation posting across company codes without taxes, which means that it cannot automatically create invoice.

5. Maintain controlling area - OKKP . 6. Maintain no. ranges for controlling documents

KANK 7. Maintain versions in - OKEQ

Cost centers - are divisions that add to the cost of the organization, but only indirectly add to the profit of the company. Typical examples include Research and Development, Marketing and Customer service Cost Element - Basically, cost element are carriers of costs.

Primary cost elements are like material costs, personnel costs, energy costs... where a corresponding GL account exists in FI.. to allow costs to flow...

Secondary cost elements are like production costs, material and production overheads, they can be created and administered in only CO. These are used in internal cost allocation, overhead calculation, settlement transactions., these do not flow to FI...

Controlling is broken down into the following sub modules:

Overhead Cost Controlling Product Cost Controlling Sales and Profitability

Analysis Activity Based Costing

Controlling in sap consists of:

Controlling area Organizational unit for cost accounting

Cost center Organizational unit for cost control

Profit centerOrganizational unit for internal profit analysis

SAP R/3 Organizational Elements for Financial Reporting and Analysis

Internal accounting is purely for internal use and serves to control and manage the organization. It is constructed along the lines set by management and must be flexible

The Audit TrailEvery transaction in the system is represented by a document, a document records a business transaction. Documents are accessible in real time and are stored centrally. Data resulting from transactions posted to the system can be viewed at every level of detail from the original document, to the final report. The system provides an audit trail of the reporting information through the drill down capabilities.

All data relevant to cost, flows automatically to Controlling from Financial Accounting. At the same time, the system assigns the costs and revenues to different CO account assignment objects, such as cost centers, business processes, projects or orders. The relevant accounts in Financial Accounting are managed in Controlling as cost elements or revenue elements.  Controlling provides you with information for management decision-making. It facilitates coordination, monitoring and optimization of all processes in an organization. This involves recording both the consumption of production factors and the services provided by an organization. As well as documenting actual events, the main task of controlling is planning. You can determine variances by comparing actual data with plan data. These variance calculations enable you to control business flows. Income statements such as, contribution margin accounting, are used to control the cost efficiency of individual areas of an organization, as well as the entire organization.

TRANSACTION CODES USED IN SAP CONTROLLING

Maintain Controlling Area                                            OKKP

Maintain No. ranges for controlling Area                              KANK

Creation of Primary cost element for

controlling area               KAO1

Make Default Settings                                               OKB2

 Maintain Plan/actual Versions                                     OKEQ

Maintain Controlling Area settings                                 OKE5

To view the cost elements created                               KA03

Creation of Profit Center KE51

Creation of cost center                                             KS01

Creation of cost center groups                                   KSH1

Creation of cost element group                                  KAH1

To view the cost center line item report                       KSB1

Line item report for Profit Center                                  KE5Z

Table to look up cost centers CSKS

To view all controlling reports                                 GR55