SAP Project Manager -...

SAP Marines

SAP Project Manager Finance Accounting

Sherief Essam Youssef SAP MARINES

Management Accounting

SHERIEF ESSAM YOUSSEF 1

1 SAP Marines Contents Financial Accounting .................................................................................................................................... 2

Financial Accounting (FI) Overview ........................................................................................................... 2

Company Code .......................................................................................................................................... 8

Segment .................................................................................................................................................... 8

General Ledger Chart of Accounts ......................................................................................................... 11

Reconciliation Accounts .......................................................................................................................... 15

Financial Statement Versions ................................................................................................................ 16

Profit Centers .......................................................................................................................................... 17

Accounts Payable ................................................................................................................................... 18

Integration with Purchase to Pay Business Process .............................................................................. 21

Accounts Receivable ............................................................................................................................... 25

Accounts Receivable Master Data .......................................................................................................... 25

Order to Cash Business Process Integration with Financial Accounting ................................................. 26

Sales Order Process from the Accounting View ..................................................................................... 27

Fixed Asset Accounting ........................................................................................................................... 31

Assets in FI Organizational Units ............................................................................................................. 31

Asset Transactions .................................................................................................................................. 33

Management Accounting ............................................................................................................................ 35

Overview of Management Accounting ................................................................................................... 35

Organizational Levels in Management Accounting ................................................................................ 36

Cost Center Accounting .......................................................................................................................... 37

G/L Accounts and Cost Elements ............................................................................................................ 37

Cost Center Data ..................................................................................................................................... 39

Activity Types .......................................................................................................................................... 40

Cost Center / Activity Type ..................................................................................................................... 41

Direct Activity Allocation ........................................................................................................................ 42

Periodic Allocations with Sender/Receiver Relationships ...................................................................... 43

Internal Order ......................................................................................................................................... 45

Posting to an Internal Order ................................................................................................................... 45

Commitments ......................................................................................................................................... 45


2 SAP Marines Financial Accounting Financial Accounting (FI) Overview

The component Financial Accounting (FI) focuses on the General

Ledger, the

Processing of receivables and Asset Accounting. Important tasks of

Financial

Accounting are the recording of monetary and value flows as well as the

evaluation

of the inventories.

The General Ledger (GL) contains the recording of all accounting-

relevant business transactions on to G/L accounts from a business point


3 SAP Marines of view. Every general ledger is structured according to a chart of

accounts. The chart of accounts contains, in orderly form, the

definitions of all G/L accounts of the General Ledger. These definitions

basically include the account number, the G/L account designation and

the categorization of the G/L account as an income statement or

balance sheet account.

For reasons of clarity, the General Ledger often contains only collective

postings. In such cases, the posting data is represented in a more

differentiated way in so-called subledgers which pass on their data in

compressed form to the General Ledger.

Reconciliation accounts connect the subledgers to the General ledger in

real-time, that means, as soon as a posting is made to a subledger, the

posting to the respective reconciliation account in the General Ledger

takes place analog to this.

The Accounts Payable Accounting (AP) records all business

transactions that have to do with the relationships to suppliers. It takes

much of its data from the Procure to Pay business process

The Accounts Receivable Accounting (AR) records all business

transactions that

have to do with the relationships to customers. It takes much of its data

from the

Order to Cash business process.

The Asset Accounting (AA) records all business transactions that have

to do with the

management of assets.

The Bank Ledger (BL) supports the booking of cash flows.


4 SAP Marines

The General Ledger is managed at company code level and, from this,

the required balance sheet and the P/L statement are compiled. The

assets of a company are listed in the balance sheet, divided into Assets

and Liabilities . In terms of integration, the business transactions that

are entered in the subledgers, but also those entered in Materials

Management (material stock) or in Treasury flow into the balance sheet

in real time. The component “Treasury” (TR) focuses on functions

such as payment means, Treasury Management (this includes, for

example, financial means, foreign exchange, derivatives and bonds),

loans and Market Risk Management


5 SAP Marines

The aim of recording business transactions is to create a Balance Sheet

and Profit & Loss Statement in the sense of a report. These reports

must be adapted to the specific national requirements. Different Balance

Sheet and Profit & Loss structures can be set up for the different

reporting requirements. In these Balance Sheet and Profit & Loss

structures, it is defined exactly which accounts should appear in which

balance sheet items. Many Balance Sheet/P&L Structures are already

delivered. Financial reports that are required for external Reporting


6 SAP Marines purposes (for example, Balance Sheets and P/L Accounts) are created in

FI.

In new General Ledger Accounting, one ledger has the role of “

leading” ledger. However, as previously in older releases, you can

still manage accounts in parallel using additional accounts (accounts

approach), despite new General Ledger Accounting. In this case,

there is only exactly one ledger in new General Ledger Accounting -

the leading ledger.


7 SAP Marines

Financial Accounting versus Management Accounting

Financial Accounting, the focus of this unit, is meant for legal

reporting. You can draw up a balance sheet and income statement at the

level of legal units. Management Accounting's purpose is for internal

management information regarding cost and revenues. The level on

which financial accounting is needed, will primarily be determined by

law, because its an external obligation. This means legal reporting will

be different for each country. Management accounting could analyze

cost and revenues at a higher level, so across the boundaries of

countries. For example, analyzing costs for all production departments

worldwide.

Costs and revenues from financial accounting will be used in

management accounting. In management accounting those financial data

could be allocated across several (financial accounting) boundaries. For

many would like to make sure that the results in management accounting

can be compared with the result in financial accounting (reconciliation).


8 SAP Marines Management Accounting provides Controlling Objects (CO objects)

which allow an organization to internally track both costs and revenues.

Business Example

Your organization is implementing Financial Accounting (FI). You need

to explain the Financial Accounting organizational levels and their

functions.

Company Code The company code does not usually extend across national boundaries.

You should create a company code according to tax law, commercial

law, and other financial accounting criteria. Company codes are usually

created based on geographic considerations.

The company code is the smallest SAP entity that supports a full legal

set of books.

There must be at least one company code in the production environment

for a business to be live.

The company code key is a 4 digit alphanumeric field.

Segment The segment is a new organizational unit available as of SAP ERP 2004 (ECC

5.0).


9 SAP Marines In new General Ledger Accounting, segments can also be used as a dimension

for

Reporting purposes.

The aim of segmented reporting is to:

• Provide an insight into different business activities of a diversified company

• Provide information about the general environment

Purpose (includes):

• To provide a better overview of a company's economic performance

• To improve forecasting of the potential sales and financial reserves of a

company

• To better anticipate risks and opportunities of a company

IAS (International Accounting Standards) distinguishes between business and

geographical segments

• A business segment represents a subactivity of a company, involving the


10 SAP Marines manufacture of a product or provision of a service, with risks and revenues that

differ from those of other business segments.

• A geographical segment provides information about risks and revenues that

differ from other geographical segments in terms of economic or political

factors, for example.

According to US-GAAP, a segment is a part of the company that incurs costs,

generates

revenue, and has its own financial data with regard to profit and resource

consumption

The controlling area identifies a self-contained organizational structure for

which

costs and revenues can be managed and allocated. It represents a separate unit

of

cost accounting.

One or more company codes can be assigned to a controlling area, which

enables you


11 SAP Marines to carry out cross-company code cost accounting between the assigned

company

codes. However, this is only possible if the assigned company codes and the

controlling area all use the same operating chart of accounts and fiscal calendar

year

General Ledger Chart of Accounts

Each general ledger is set up according to a chart of accounts. The chart

of accounts contains the definitions of all G/L accounts in an ordered

form. The definitions consist mainly of the account number, account

name, and the type of G/L account, that is, whether the account is a P&L

type account or a balance sheet type account. You can define an

unlimited number of charts of accounts in the system. Many country-

specific charts of accounts are included in the standard system.


12 SAP Marines

For each company code, you have to specify one chart of accounts for

the general

ledger. This chart of accounts is assigned to the company code. A chart

of accounts

can be used by multiple company codes (see diagram). This means that

the general

ledgers of these company codes have the identical structure.


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G/L Account Master Record

There are two segments to the G/L master record. The first, the chart of

accounts

segment, has high level control features the like description of the

account, whether the account is a balance sheet account or a P/L

account, the account group (which controls company code segment

fields) and the consolidation account number.

The second, the company code segment, details how the company code

that uses that specific account manages the account. Controls for the

following are found in this segment: account control, account

management, bank/financial details, joint ventures, interest calculation,

and document control .


14 SAP Marines

Account Groups for G/L Accounts

Account groups classify G/L accounts into user-defined segments They

also determine the number range of the accounts that will fall into

theseuser-defined segments. Finally, field status of the company code

segment of the master record is determined when creating, changing or

displaying the same. The four field statuses of a field can be Suppress,

Required, Display, and Optional.


15 SAP Marines Reconciliation Accounts

Reconciliation Accounts and Sub-Ledgers

The reconciliation account ensures real-time integration of a subledger

account with the general ledger. The G/L account reconciliation account

itself is not designed for direct posting. In this way, the reconciliation

between subledger and general ledger is always guaranteed. In the

general ledger, postings are limited to reconciliation accounts by the use

of reconciliation account types.


16 SAP Marines Financial Statement Versions

A general ledger is kept in order to provide the information

needed to create a balance sheet and a profit-and-loss statement.

These reports have to meet country-specific requirements. To

meet the various reporting requirements, various financial

statement versions have be created in the system. In these

financial statement versions, you define exactly which accounts

are to appear in which line items of the financial statement. Many

financial statement versions are included in the system. When


17 SAP Marines running financial statement reports, select a financial statement

version that contains the details of the report structure.

Profit Centers

In new General Ledger Accounting, profit centers are part of

Financial Accounting. Like company codes, they function as a

dimension for reporting. This means that financial statements can

be created for profit centers as standard. (In earlier releases,

profit center accounting was only part of Controlling.)

A profit center can represent:

• An organizational unit within the company (such as a plant)

• A line of business


18 SAP Marines • A geographical location

Important to remember is that this is a "profit" area of

responsibility and must not be confused with a cost center. As of

SAP ERP 2004 (ECC 5.0), profit centers are not separate

components but rather an integral part of the General Ledger

itself.

However, unlike the other dimensions in new General Ledger

Accounting, profit centers are still considered as master data,

despite being organizational units

Accounts Payable Accounts Payable is used to record vendor's invoices that do not relate to

a purchase order and also to pay open vendor's invoices. It also

integrates with the Purchase to Pay business process.


19 SAP Marines Vendor Master Record and Accounts Payable Postings

the Vendor Master Record

Vendor master records contain data that controls how transaction data is posted and

processed. This includes all the information about a vendor that is needed to be able

to conduct business with them.

Vendor specific information, such as name and address is stored at the client level. Any

company code defined in the client will have access to the vendor general information.

Master data that is needed by a company to define how that particular company code

will process transactions with the vendor is stored in company specific records.

This technique prevents individual company codes from maintaining data that would


20 SAP Marines be identical in nature.

The purchasing organizations purchase goods and services from suppliers, who are

paid by accounts payable. The various purchasing organizations of the group have to

enter data specific to purchasing in the vendor master record before the supplier's

master record can be used.

Invoice/Credit Memo Entry

You can easily create and post a vendor invoice or credit memo using a one-screen

Transaction. This type of invoice entered directly in A/P is a miscellaneous invoice,

Without reference to a purchase order. The A/P entry screen is divided into the following

areas:

• Work templates - here, you can select screen variants, account assignment templates,

or held documents as references.


21 SAP Marines • Header and vendor data - document header and vendor line item data is entered here.

• Line item information - the G/L line items for the document are entered here.

• Information area - The document balance and information about the vendor are

displayed here.

This transaction can also be used to create documents in a foreign currency. The

foreign currency amount is translated into local currency using defined exchange rates.

Integration with Purchase to Pay Business Process

The purchasing for the plants is carried out by Purchasing

Organization. The purchasing organization buys from suppliers

who are then paid by the vendor accounting. The different

purchasing organizations of the group must create purchase-


22 SAP Marines specific data in the Vendor Master Record before that can use

the supplier master record. An order is a formal request from a

purchasing organization to a supplier or a plant to provide or

deliver a certain amount of goods or services at a particular time.

An order does not create a posting in Financial Accounting.

However, it can create a commitment if, for example, it is not an

order to the warehouse, but a consumption order (e.g. for Cost

Center). In the case provided here, we will look at a general order

to the warehouse.

During purchase order handling, data such as supplier,

material, plant, and other data relevant to the purchasing

organization must be provided by the user. No postings are made

yet in financial accounting.

When goods are received, the system checks, among other things, the

quantity of

goods received against the order quantity. A material document is

created to update

the stock. At the same time, a document is created in financial

accounting to post the valuated goods receipt to the material stock

account or the consumption account (debit) and to a goods

receipt/invoice receipt account (credit).


23 SAP Marines After the invoice has been received in logistics invoice verification, the

vendor

invoice is checked for correctness of computation and content. All of

these purchasing processes are handled as part of logistics in the SAP

system. The vendor invoice is posted and, at the same time, a document

is created in financial accounting to post the invoice amount to the goods

receipt/invoice receipt account (debit) and the vendor account (credit).

The goods receipt/invoice receipt (GR/IR) account is used to make sure

that a goods receipt is executed for every invoice, and vice versa.

Payment processing takes place in accounts payable. It is here that

decisions are

made about the payment process, such as, for example, the payment

methods and

the bank settlement.


24 SAP Marines


25 SAP Marines Accounts Receivable

Accounts Receivable Master Data

The Customer Master Record

Customer master records contain data that controls how transaction data is posted and

processed. This includes all the information about a customer that is needed to be able

to conduct business with them. Customer specific information, such as name and

address, is stored at client level. Any company code defined in the client will have

access to the customer general data information. Master data that is needed by a

company to define how that particular company code will process transactions with the

customer is stored in company specific records. This technique prevents individual

company codes from maintaining data that would be identical in nature.


26 SAP Marines A sales area (combination of sales organization, distribution channel, and division) must

define sales area-specific settings for a customer before it can start doing business

with that customer. These could be special conditions and terms of payments that the

customer has arranged with the specific sales area.

Order to Cash Business Process Integration with Financial

Accounting

During order processing a sales order is normally the first object created. The sales

order contains all relevant information for processing the customer order within the

framework of sales order transaction.

On the day of shipping, an outbound delivery document is created. The goods to be

delivered are posted as a goods issue. A goods issue document is created in MM, and

an accounting document is created in FI so that the goods issue is posted to the correct


27 SAP Marines G/L accounts. The accounting document debits cost of goods sold and credits

inventory. The last stage in the sales process is billing. A billing document is created

in SD, and a printed invoice is sent to the customer. At the same time, a document is

created in FI so that the receivable and revenue can be posted to the correct accounts.

The accounting document debits the customer and Credits revenue

Sales Order Process from the Accounting View In the overview, the external stock sales process creates several central documents

from the account point of view. In order to reach a more exact understanding, you

first of all have to look at the activity output of the product. An expenditure (for

example, costs of the production order), that is paid through bank accounts (compare

lesson 'Plan to Product Process') precedes both the external procurement of services

and in-house production. In in-house production, a finished inventory was created from

the delivery or settlement of the production order.


28 SAP Marines The delivery in the Order to Cash process withdraws from this produced stock, thereby

reducing the stock account. Billing creates the income and the corresponding customer

receivable. The payment settles these receivables, leading to a credit memo on your

bank account. In the ideal case, all accounts are settled exactly, except with an

adjusted, higher bank balance, because the income is higher than the expenditure,

which is also shown in the profit and loss statement by a corresponding profit.

In the overview, the service sale process creates several central documents from the

account point of view. In order to understand more exactly, you first of all have to look at

the activity output of the product. Expenses are incurred when services are procured

outside the company and provided internally. External services are posted without and


29 SAP Marines internal services with an account assignment to the cost center performing the activity

(personnel expenses). In comparison to the ex stock sales process, the delivery of

goods does not apply here. Billing creates the income and the corresponding

receivables vis-à-vis the customer.

The payment settles these receivables, leading to a credit memo on your bank account.

In the ideal case, all accounts are settled exactly, except with an adjusted, higher bank

balance, because the income is higher than the expenditure, which is also shown in the

profit and loss statement by a corresponding profit.

The items are cleared if the customer pays his or her open items to the full amount or


30 SAP Marines with an authorized deduction of cash discount.

If a minor payment difference exists, this can be charged off automatically.

The maximum amount that constitutes a minor payment difference is defined in

tolerance group settings.

Any greater payment difference (outside of tolerance) must be dealt with manually.

• Partial payment: The item being short-paid does not clear.

• Residual item: The open invoice is cleared and a new open item (residual item)

in the amount of the payment difference is created.


31 SAP Marines Fixed Asset Accounting

Assets in FI Organizational Units

Each asset belongs to a company code and business area. All postings made for the

asset (acquisitions, retirements, depreciation, etc.) are applied in the assigned company

code and business area. Additionally, you can assign the asset to various CO objects

(cost center, internal order, and activity type) and logistic organizational units (for

selection purposes only).


32 SAP Marines

The asset class is the main criteria for defining the asset. Each asset has to be

assigned to an asset class. In the asset class, you can define certain control parameters

and default values for depreciation and other master data. Assets that do not appear in

the same line item of the balance sheet (such as buildings and equipment) have to be

assigned to different asset classes. Additionally, there is at least one special asset class

for assets under construction and one for low-value assets. The asset classes used by

IDES for this are:

• 4000 For assets under construction

• 5000 For low-value assets


33 SAP Marines Note: You can also create asset classes for intangible assets and leased assets. There

are functions available for processing leases.

Note: The application component PM (Plant Maintenance) is used for the technical

management of assets. The application component TR (Treasury) is used for managing

financial assets.

Asset Transactions

Asset transactions (acquisitions, retirements) can be posted in various ways to meet

the organizational and business requirements of the company. In FI-AA you can post in

the following ways:


34 SAP Marines • Without a vendor or a purchase order; the offsetting entry is made to a G/L clearing

account

• To a vendor, but without reference to a purchase order

• Via materials management using the MM functions (purchase order, goods receipt

and invoice receipt)


35 SAP Marines Management Accounting Overview of Management Accounting Comparison of Financial and Management Accounting

Management Accounting contains all the functions necessary for effective cost and revenue controlling.

It covers all aspects of management controlling and includes many tools for compiling information for

company management

Financial reports used for external reporting purposes, such as balance sheets and profit and loss

statements, are created in Financial Accounting. Similar to the various legal requirements set by the

relevant financial authorities, these external reporting requirements are usually prescribed through

general accounting standards, such as Generally Accepted Accounting Principles (GAAP) or International

Accounting Standard (IAS).


36 SAP Marines Organizational Levels in Management Accounting

The controlling area is the basic organizational unit in Management Accounting. A controlling area is a

closed entity used for cost accounting. You can allocate costs only within a controlling area. These

allocations cannot affect objects in other controlling areas. You can assign more than one company code

to a controlling area. This enables controlling across company codes. The controlling area and its

company codes must use the same operating chart of accounts and the same fiscal year variant. (Only

the number of special periods may vary). Profitability Analysis (CO-PA) is used with the operating

concern. The operating concern represents the structure of external market segments for the

enterprise. You can assign several controlling areas to each operating concern so you can analyze them

together.

The company code is an independent accounting unit. Financial and profit and loss (P&L) statements are

prepared at company code level to meet legal reporting requirements.

Business areas (BA) can be used to group strategic business units for reporting P&L and financial

statements (not suitable for auditing, suitable for reporting purposes only). Business areas can also be

cross-company code.


37 SAP Marines The plant represents a production unit and is the central organizational unit in Materials Management

and Production Planning. A plant is assigned to a company code.

The purchasing organization is an organizational unit used in Materials Management – Purchasing.

The sales organization is an organizational unit used in Sales Order Management.

Cost Center Accounting

G/L Accounts and Cost Elements The chart of accounts is created in Financial Accounting. All expense accounts are grouped in one class

(class 4) and all revenue accounts (class 8).

Expense accounts to which costs are posted for cost accounting purposes must also be created as cost

elements in Management Accounting. This ensures that all postings to this type of expense account

always arrive in CO at the same time.

Secondary cost elements are defined only in CO and are used for internal CO allocations (such as

assessments or settlements). Secondary cost elements do not have any corresponding G/L accounts in

FI.


38 SAP Marines

Standard hierarchy represents all Cost Centers per controlling area

The cost center is an organizational unit in a controlling area representing a clearly delimited location

where costs occur. You can make organizational divisions on the basis of functional, settlement-related,

activity-related, spatial, and/or responsibility-related standpoints.


39 SAP Marines Cost Center Data

The Basic Data section contains fields for the name and description of the cost center,

the name of the responsible person or cost center manager, the department to which

the cost center is assigned, and the profit center.

The Cost Center Hierarchy field displays the standard hierarchy node to which the cost

center is assigned. This field must be filled so it can be used as a control feature in Cost

Center Accounting. Each controlling area must have a unique standard hierarchy that

includes every cost center created in that controlling area.

The Profit Center field identifies the purpose of the cost center, such as production,

service, sales, or administration.

The Company Code and Business Area fields represent the close ties between

Management Accounting and Financial Accounting. If a controlling area has more than

one company code, you must specify the company code that is linked to each cost

center. If business areas are used for that company code (as defined in Financial

Accounting), a business area must also be specified in the cost center master record.

.


40 SAP Marines Activity Types The activity type classifies the activities that are to be performed within a company by

one or several cost centers. If a cost center provides activities for other cost centers,

orders, processes, and so on, then this means that its resources are being used. The

costs of these resources need to be allocated to the receivers of the activity. Activity

types serve as tracing factors for this cost allocation.

In an internal activity allocation, the quantity of the activity, such as the number of

consulting hours, is entered into the SAP ERP system, either manually or automatically.

The system calculates the associated cost based on the activity price and generates a

debit to the receiver and a credit to the sender for both the quantity and costs. Internal

activity is allocated using secondary cost elements, which are store in the master data of

the activity types as default values.

You can restrict the use of the activity type to certain types of cost centers by entering

the allowed cost center categories in the activity type master record. You can enter up

to eight allowed cost center categories, or leave the assignments “unrestricted” b

entering an asterisk (*).


41 SAP Marines Cost Center / Activity Type To enable internal activity allocations, you need to specify which cost centers provide

which activity types at what price. You do this in the SAP ERP system by planning the

activity output/prices for a cost center. To enable this, the SAP system provides a wide

range of options.

For direct activity allocation, you enter the quantity of the activity to be allocated

manually. In order for a cost allocation and an activity allocation to occur the SAP ERP

system has to valuate the allocated activity amount using the senders price for this

activity type. For a direct activity allocation, the plan price for the combination “cost

center/activity type” is used for this calculation.

You can enter the planned price either manually, or have it calculated by the system

automatically within planning. To enable both costs and activity to be allocated, the SAP

system has to valuate the activity quantity allocated at the price specified by the sender

for this activity type. You can use this procedure if your price calculation is not complex,

for example where prices required for your rates are determined within your

organization and do not depend on internally produced activities, or where the rate

depends on the prices of external suppliers and not on the costs of the cost center.


42 SAP Marines Direct Activity Allocation

Direct activity allocation deals with the measurement, posting, and allocation of an

organizational activity. You need to create the corresponding (measurable) tracing

factors in the SAP system.

These are know as activity types in Cost Center Accounting. To directly allocate activity,

create an activity type. If you want to enter a direct activity allocation, enter the cost

center that provides the activity (sender cost center), the object that receives the

activity (receiver), the type (activity type), and the quantity of the activity provided.

Note that only one cost center from the sender can be allocated to an internal activity

allocation. The receiver can be any real Management Accounting object such as a cost

center, an order, a project, and so on.

To allocated activities directly, you need to define which cost centers are to provide

which activity types, by planning activity output. You do this by planning activity output.


43 SAP Marines Periodic Allocations with Sender/Receiver Relationships

This is an example of a Sender-Receiver relationship within an Allocation Cycle. The

same principle applies to Periodic Reposting’s, Distributions and Assessments. Here, the

sending Cost Center has costs to allocate to the receiving Cost Centers. This allocation

will be done using an appropriate Tracing Factor (a user-defined key for determining

cost and quantity assignments in periodic allocations, in this case a Statistical Key Figure

representing the Number of M Floor Space that each Receiving Cost Center occupies).

The allocation cycle uses this information to determine the costs to be allocated to each

Receiving Cost Center as follows:

– Receiving Cost Center “Administration” occupies 40 M Floor Space

– Receiving Cost Center “Production” occupies 360 M Floor Space

– Total number of M Floor Space is 400

– Therefore, “Administration” is allocated costs of;


44 SAP Marines – Material Costs = (40/400) * 3000 = 300

– Wages Costs = (40/400) * 4000 = 400


45 SAP Marines Internal Order

Posting to an Internal Order

An internal order is a bucket that allows a better view of costs that could not be

itemized in detail in a cost center.

An order can be real or statistical (informational postings only). If it is a statistical

posting, the cost object that the internal order is attached to would receive the real

posting.

Commitments • A commitment identifies costs which will be incurred in the future for materials and

services requested or ordered. By recording commitments, as well as actual costs, you

can compare the funds you have allocated to your planned or budgeted costs to

determine funds availability.


46 SAP Marines • Commitments for future costs are created in the Purchasing function of the Materials

Management component.

– A commitment is recorded automatically when you assign an overhead order to a

purchase requisition or purchase order line item.

• You reduce the commitment by posting a goods receipt against a purchase order.

Actual costs are posted to the internal order. This process continues until the purchase

order is closed and the commitment is reduced to zero.

• You must activate commitment management in Management Accounting for each

controlling area.

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