5 SAP CO Level-1 Training
Transcript of 5 SAP CO Level-1 Training
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Welcome
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SAP Controlling Module
By:Kishore Sunkara
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FI and CO:
CO
FI
Internal AccountingCost Accounting
Managerial Accounting
Different Valuations Flexibility
Taxaudit
External AccountingFinancial Statements
Legal RequirementsStandards
Controlling
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CO Organizational Structure
Profit Center(master data)
Profitability Segment(master data)
A A
A
Operating Concern
Controlling Area (s)
Company Code
Sales organization
Focus on External Markets
Focus on Controlling andInternal Accounting
Focus on External Accounting
Focus on Sales
PlantFocus on Manufacturing 4
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Company Code and Controlling Area
Company Code
Company Code
Controlling Area Company Code
Controlling Area Company Code
One to Many Relationship
One to One Relationship
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Components of controlling
• Cost element Accounting• Cost center Accounting• Profit center Accounting• Internal Orders• Product Costing • Profitability Analysis
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How can we reduce our overhead? Are the responsibility areas working efficiently? How high are the organizational activity costs? Are they within their budgets? How can we optimize our internal business processes?What costs occur within the organization?
COOM
What are the Manufacturing
Costs of a product?
COPCA Product
CostControlling
Profitability AnalysisHow profitable are individual market segments?
Profit Center Accounting
How Profitable are Individual areas ?
COPA
ECPCA
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Integration with Other Modules
Overhead Cost Controlling
Product CostControlling
Cost Center Acc.
OverheadOrder
Accounting
CostObject
CO
Profitabilitysegments
ProfitabilityAnalysis
FI AA
FI MM PP
HR
FI SD
SD
PP
ProfitCenterAcc.
ProfitCenter
PrCtrPrCtr 1 1
PrCtrPrCtr 3 3
PrCtr 2
PrCtrPrCtr 4 4
PrCtrPrCtr 5 5
Cost
& R
even
ue E
lem
ent
Acco
untin
g
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Master Data in Controlling
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Activity Type
StatisticalKey
Figure
Cost Center
Master Data in CCA
Cost Element
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Cost Elements
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Cost element accounting
Cost element is the cost carrier.
• Primary cost elements
All P&L accounts Will be created as primary cost elements. It’s the Integration between FI and CO
• Secondary cost elements
Secondary cost elements will used for transferring cost from one cost object to another cost object
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Cost Centers
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Cost center accounting
• Cost center is the cost collector where actually incurred the expenses
• Cost centers can be created at any level either at department level, location wise, division wise, functionality wise and product group wise etc. or the combination of the above.
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Cost Center Hierarchy
• Cost Centers are Structured into Organizational and/or Functional Hierarchical Groups .This is known as the Cost Center Hierarchy.
• The Hierarchy created for Operational Management is called the
Cost Center Standard Hierarchy • Multiple Alternate Hierarchies can be created for Functional
Management. These are simply called Cost Center Groups
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Cost Center Hierarchy Cont Area.
Corporate
1710Marketing
Prodn 1 Prodn 2 Support1300Press Shop
1201Auto
1502R&D
1301Quality
1202Gears
1504Projects
1330Testing
1232Maint - Mod
1520Purchase
Plant 2
Plant 3
Assembly
9010
Sales
9000
Finance
Plant 1
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• The primary costs are posted from FI via the primary cost element.
Examples:– FI - Posting of primary costs through FI entries.
Assignment to cost object at time of FI posting.– AA - Assignment of asset made to cost center. Post to
CC at time of depreciation or gain/loss calculation.• Two documents are created when primary costs are posted to
CO from FI:– The original document in FI.– A parallel document in CO that displays the data from a
cost accounting viewpoint.
Cost Center Actual Postings
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Activity Types
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Cost Center Cost Object
Activity TypeActivity types define functions or services performed by a cost center, and are used
to allocate that center’s costs to other cost objects.(Prod order)
Ex. Machine , Labor and cleaning etc.
Activity Types are assigned to Production Cost Centers representing the activity performed there.
Activity types are frequently used in the allocation of overhead to production.
AllocationActivity Types
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Statistical Key Figures
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Statistical key figure • Statistical key figures will be used as a base for allocation of cost
from one cost center to another cost center.
Ex:• No of employees• Square feet• Light points• No of telephone lines
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Type 01: Telephone sets
Dept. 01 Dept. 02 Dept. 03
Type 02: No of employees
Dept. 01 Dept. 02 Dept. 03
50% 33%17%
14%28% 58%
Statistical Key Figures
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Primary Cost:Telephone Expense
G/L #467000
Common Cost Center:#995000
Planned Telephone Expense:
$12,000
Distribution Rule:
Cctr. #11500040%
Cctr. #18700025%
Cctr. #14500020%
Cctr. #18900015%
#467000 $4,800
#467000 $3,000
#467000 $2,400
#467000 $1,800
#115000 #187000 #145000 #189000Cost Ctr:
Distribution
Distribution
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Activity rate calculation
PRODUCTION COST CENTER 1010
Activity type LABOUR
Planed activity hours(per month) 1000 (hr)
Primary costsWages (In Rs.) 100000
Salaries (In Rs.) 200000
Total cost 300000
Activity rate per hour 300
Activity rate of Prod c.center =Total cost /Total activity hours
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Profit Center Accounting
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Profit center accounting
Profit center is a management-oriented organizational unit used for internal controlling purposes.
PCA lets you analyze internal profit and loss for profit centers. This makes it possible for you to evaluate different areas or units within your company. You can structure profit centers according to region (branch offices, plants), function (production, sales), or product (product groups).
Profit Center Accounting is a component of the "Enterprise Controlling" module.
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All the business transactions in the R/3 System which are relevant for cost and profits are monitored in the profit centers at the same time they are processed in the original module, and organized according to cost and revenue elements. This transforms all the flows of goods and services within the company into exchanges of goods and services between profit centers.
It is also possible to treat a profit center as an investment center. In addition to the flows of goods and services, you can transfer selected balance sheet line items (fixed assets, payables and receivables, material stocks, and work in process) to profit centers on a periodic basis. This makes it possible to calculate such key figures as profit on sales, return on investments and cash flow.
Responsibility Accounting
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Master Data in Profit Center Accounting
Profit Centers
Profit Center Groups
Accounts P&L, Balance Sheet Items
Statistical key figures
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Address / Communications
Data Basic data
Company CodeAssignment
Master Data – Profit Center
Validity Period
Profit Center
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Cost center
Internal order
Sales order
Material
Asset
Production order
Profit Profit CenterCenter
Profit Center Assignments
Profit center
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Flow of Actual values in Profit Center Accounting
– Flow from Profit and Loss accountsFlow from materials managementFlow from sales and distribution
– Flow from Balance Sheet items – Period end closingFlow from Asset ManagementTransfer of Material StockTransfer of Work In ProcessFlow from Accounts payable and receivable
– Flow from controlling – Period end closingFlow from Overhead Cost ManagementProfit Center Document EntryAssessment & Distribution
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Internal Orders
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Internal orders
Internal orders will be used to monitor the cost of specific jobs, events or short terms activities.
Internal orders support planning ,collecting actual cost and allocation of costs.
Ex: Official parties , Marketing exhibitions, Asset under construction etc.
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Function of Orders
Planning CostsBudgeting Costs
Posting Actual CostsSettling Costs
Evaluating Costs34
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Internal Orders: Overview
Cost Accounting Functions
Internal Orders
Orders withrevenues
Investment ordersOverheadorders
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Timeframe of Orders
One-Time
Activity
Regular
Activity
IndividualOrder
StandingOrder
SmallRecurring
Jobs
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Account Assignment Logic:
1 TrueCost Object
(… the rest are just statistical)
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REAL and Statistical Orders
Statistical Order
“Real”Posting
Real orders
Document
StatisticalPosting
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Product Costing
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Product Cost Controlling - Benefits
Legal Requirements
l Valuation of:
n Raw Materials
n Semi finished Goods
n Finished Goods
l Work-in-Process
Management Requirements
l Support cost reductionconcepts
l Strategic Decision Support
n which products
n where or how to produce
l Operating Decision Support
n pricing of products
n effectiveness of manufacturing
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What can Cost Object Controlling do for me?
• What actual costs did we incur in our area in the current period?
• What costs were we expecting based on the quantities manufactured?
• Are some product groups performing significantly better than others?
• What is causing these variances?• What are the scrap costs of our new line?• Did continuous improvements show cost
effects?
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Overview – Product CostingProduction Planning
RM Requisition to Stores
Procure material
RM issue to Production
Material available in stock
Process the Materials
Quality check of SFG / FG Produced
Return to production for reprocess
Delivery of SFG /FG to stores
Customer order Inventory
Despatch to Customer
No
No
No
Yes
Yes
Yes
Direct Material
Direct LabourDirect Utilities
Procurement OHs
Storage OHs
Indirect Material
Indirect LabourIndirect Mfg OHs
Selling & Distr OHs
Quality Overheads
• RM = Raw Material• SFG = Semi Finished
Goods• FG = Finished Goods• OH = Overhead
Direct cost
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Overview : Flow of data for Valuating a MaterialMM
PP
Raw Material rates from Material Master
Raw Material Quantities from Bill of Material
Activity units ( Hours / KWH)from Routing specifying details of work centers which are attached to Cost center
CO
Activity unit Rate from Activity rates for the period / fiscal year specified cost center wise
Overhead Rates (% or Qty based overheads basing on Direct costs)from Costing sheet / Costing Variant
(A) Direct Material Cost
(B) Direct Activities Cost
(C) Indirect/ Overhead Cost
(A)+(B)+(C)=COGM
MM
SD
Up Material Master of SFG / FG for issuing SFG to PP and FG to SD modules respectively
PP
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Overview : Product Cost
Consumables
Maintenance
Labor
Depreciation
RAW MATERIALS
Electricity COMMON/SERVICE COST CENTER
BILLS OF MATERIAL
PRODUCTION COST CENTER
ACTIVITY TYPES
WORK CENTER /RESOURCE
ROUTING
PRODUCTION ORDER
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UOM Qty/Usage units Rate(Rs.) Cost / Cost/For a batch / lot size of 10 kgs Batch(Rs) Unit(Rs)Material cost:
Raw material 1 Kg 200 * 5 = 1000 100
Raw Material 2 Lts 500 * 4 = 2000 200
Raw Material 3 KG 300 * 10 = 3000 300
Total Material Cost (A) 6000 600
Direct Utilities:
Activity 1 Eg: Mach HR 80 * 5 = 400 40
Activity 2 Eg. Labour HR 100 * 1 = 100 10
Total Activities Cost (B) 500 50
Overhead 1 Eg. Mat Overhead (as a % to Total Mat Cost = (A)*10%) 600 60
Overhead 2 Eg. Manufacturing Overhead (Rs. 400 per 10 Kgs ) 400 40
Total Overhead Cost (C) 1000 100
Total cost of Manufacturing (A)+(B)+(C) 7500 750
Overview : Flow of data for Valuating a Material
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Stages of Production and the Flow of Costs
Raw MaterialsBeg. Inventory
Add: Purchases= Raw Materials
Available for Production
Less: Raw Materials Transferred to Production
= Ending Inventory
Work-In-ProcessBeg. WIP Inventory
Add: Raw Materials Transferred InDirect LaborAllocated Manufacturing Overhead
= Manufacturing Costs for the Period
Less: Goods Completed and Transferred to Finished Goods
= Ending WIP Inventory
Finished GoodsBeg. Inventory
Add: Goods Completed and Transferred from WIP
= Goods Available for Sale
Less: Cost of Goods Sold= Ending Inventory
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Profitability AnalysisCO-PA
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Profitability Analysis
– Profitability Analysis (CO-PA) lets you analyze the profitability of segments of your external market. These segments can be defined according to products, customers, countries, and numerous other characteristics, as well as your internal organizational units such as company codes (i.e. 9100) or distribution channels (I.e. direct, wholesale, e-Commerce). It is a multi dimensional analysis.
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Typical Questions in Profitability Analysis
customer
region
salesdivision
product
MarketMarket
CompanyCompany
u Who are the largest and fastest growing
customers ?
u How the sales and contribution margins have
changed in the last period for each product ?
u What are my worst and best performing
products in different regions ?
Billingdocuments
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Flows of Actual Values - Contents
• Flows of Actual Values• Transferring Data from SD• Transferring Cost Center • Settling Orders • Direct Postings from FI
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Sources of Value Fields
R
SDSD
CO-PCCO-PC
Cost CenterOrderProcess
Cost Estimate
General Ledger Posting
Billing Document
FIFI
CO-OMCO-OM
PSPS
CO-PACO-PA
WBS ElementNetwork Operation
Additional Costs
Quantity
Sales Revenues
Sales Deductions
Cost of Goods Sold
Variable Cost of Goods Mfd
Fixed Cost of Goods Mfd
Bonuses
Freight Costs
Sales and Administration Costs
Marketing Costs
Variances
Research & Development Costs
Cost Discounts
Cost Bonuses1996 1997 1998
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Transfer of Overhead - Overview
Process
Cost Center
Order
CO-CO-PAPA
Assessment, Process Allocation
Order Settlement
Assessment, Process Allocation
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PCA Vs COPA• Profitability Reporting:
– Profitability Analysis (CO-PA) lets you analyze the profitability of segments of your external market. These segments can be defined according to products, customers, countries, and numerous other characteristics, as well as your internal organizational units such as company codes (i.e. 9100) or distribution channels (I.e. direct, wholesale, e-Commerce). It is a multi dimensional analysis.
– The aim is to provide your executive management, sales, marketing, planning, and other groups in your organization with decision-support from a market-oriented viewpoint.
• Responsibility Reporting:
– EC-PCA lets you analyze internal profit and loss for profit centers. This makes it possible for you to evaluate different areas or units within your company. You can structure profit centers according to region (branch offices, plants), function (production, sales), or product (product groups). Profit Center Accounting is a component of the "Enterprise Controlling" module. It is a two dimensional analysis.
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Basic Report of profitability analysis
CharacteristicValues
Key Figures
Revenue COGS product
North
East
South
Region
You select the desired variables, characteristics, and key figures.
The selected characteristics form the dimensions of a multidimensional "data cube".
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