erptips sap training manual sample chapter from controlling

SAP Controlling ECC 6.0 Rev. 05/04/09 1 SAPtips Sample Controlling Cost Element Accounting

This segment from our 384 page SAP Controlling manual is being made available as a sample of our training manuals. Please contact [email protected] if you have any SAP training needs, or visit www.ERPtips.com for more information.

Written by Suzanne Reid

Published by Klee Associates, Inc.

Copyright Klee Associates, Inc., 2009

Unit 3: Cost Element Accounting

This unit covers the following:

A further discussion of Primary and Secondary Cost Elements, including a more defined list of rules and a breakdown of the categories assigned to Primary and Secondary Cost Elements

Configuration of Field Statuses

Manual reposting of values in CO

Cost Element Grouping

Reporting

Exercises that will reinforce the concepts explained.

The primary focus of this unit is the use of Primary and Secondary Cost elements. Use of these elements will be discussed further in later Units as they relate to Cost Center Accounting, Profit Center Accounting, and Internal Order Accounting.

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Unit 3: Cost Element Accounting Klee Associates, Inc.

2 Rev. 05/04/09 SAP Controlling ECC 6.0

Overview

As noted in Unit #1, Cost Elements in SAP are either Primary or Secondary. The key to differentiating the two is how and when they are used. One way of looking at this is how data flows into SAP and how it moves within CO.

Primary Cost Elements bring the data (financial postings) into SAP. As shown below, the Primary Cost Elements carry the values from FI into different modules depending on the category or classification assigned to the G/L account.

It is important to note that cost elements with a category of “01” are considered an expense and post to a cost center. The value will also appear in PCA because each cost center is tied to a profit center. PCA receives the posting because of that relationship and not directly from the cost element.

Secondary Cost Elements move data around within CO and have NO impact on the General ledger. An example of this would be the allocation of electricity.

In this example, the bills are received from the electric company that services the corporate offices of company 3000. The AP department posts a financial transaction that debits Utility Expense for Cost center 2100, which is used as a holding place for HQ expenses.

As shown below, at the end of the month the value in cost center 2100 is allocated to the departmental cost centers based upon square footage using Secondary Cost Element 990000.

The result is that the costs posted to the budgets now reflect an overhead cost.

Klee Associates, Inc. Unit 3: Cost Element Accounting

SAP Controlling ECC 6.0 Rev. 05/04/09 3

Demonstration Overview

The objective of this Demo is to reveal the details of an Accounts Payable (AP) Travel Expense Reimbursement Invoice in Cost Element Controlling.

1. Display Actual Cost Documents

Transaction: KSB5

Menu Path: Accounting Controlling Cost Element Accounting Information System Reports for Cost and Revenue Element Accounting Document Display Controlling Documents: Actual Costs

Or

Menu Path: Accounting Controlling Cost Element Accounting Information System Reports for Cost and Revenue Element Accounting (New) Document Display Controlling Documents: Actual Costs

Data for Demo:

Field Value

Document Number 0200093541

Note: Prior to executing the document, you can select your personal line layout.

Enter the document number and click to see the document details.

Click to the left of the CO document number to see the details.



Selet the text Val/COArea Crcy header and Click to see the total amount of the document.



Master Data

Primary Cost Elements

As shown below, Primary Cost Elements exist in both FI and CO. In FI they are called “General Ledger Accounts”.

Setup and Use

To ensure that Primary Cost Elements perform in the manner you intend, it is important to understand when it is required, how it is used, and the setup in detail.

Must have a 1:1 relationship with a P&L account within the General Ledger.

Its purpose is to “move” data into CO.

Primary cost elements can be used to move data within CO – under certain situations, but it is not recommended for this use.

NOT every P&L account will have a cost element association. With the exception of revenue and expense accounts, it depends on whether or not the account in question fully describes its purpose. If it does, then it should not be created as a cost element.

Examples of this would be your Core COGS or WIP Offset account.

Another example relates to an “Other/Miscellaneous Expense account”. If your company has implemented CO-PA and is using it for Gross Margin calculations, then postings to the “Other Expenses” account are not relevant and it should not be created as a cost element.

Represents revenue, expense, or sales deductions, depending on two things; the G/L account and the category you assign to it.

Once a category is assigned and you have posted to the cost element, the category cannot be changed.

Can be created automatically, if necessary.



It is time dependent.

A company generally sets up Primary Cost Elements to begin on the first day of the fiscal year you go live. If you are going live and loading history, it will be necessary to set the cost element to begin on a prior date.

The end date is generally 12/31/9999, unless you know you will only be using the cost element for a limited period of time.

This master data object is NOT company code specific.

When an organization operates multiple company codes that are assigned to one controlling area AND which share the same Chart of Accounts, and you then associate a cost element with an existing G/L account, that change will apply to postings within each company code. It is important to identify and mitigate any issues prior to making the change.

Categories

The category assigned to a cost center determines which other CO elements can receive the value of the posting. There are three Primary Cost Elements categories that are always used. They are as follows:

01: Primary costs/cost-reducing revenues

Costs. Used for postings from FI (Salaries or Travel expenses) or MM (purchased supplies). These postings generally post to a cost center or an internal order.

Cost-reducing revenues. An example of this would be a posting for exchange rate differences or a cash discount posting. Because these charges do not occur during the SD invoice process, if you have implemented Costing Based CO-PA and want these postings to move into CO-PA, you have to use a secondary cost element.

11: Revenues

This category is assigned to a Primary cost element relevant to revenue postings that are a result of SD (Sales & Distribution) billing documents.

Also included in this category are Sales “Deductions” such as freight (if it is listed separately on the invoice), or a charge for a special order (such as a specific configuration of an item), or a quantity surcharge when a customer orders less than the minimum.

Elements classified within this category will post to Profit Centers and/or a CO-PA segments, but CANNOT post to a Cost Center.

12: Sales Deductions

This category is assigned to Primary Cost Elements that are used to reflect adjustments on a billing document. Specifically they relate to a discounted sale or rebates.

Elements classified within this category will post to Profit Centers and/or a CO-PA segments. The difference between categories 11



and 12 is that category 12 allows for statistical posting to cost centers.

The following categories are available for Primary Cost Elements but are not generally assigned.

03: Accrual Calculation Using the Percentage Method

Only used with Primary Cost Element accruals. Most companies accrue within FI and allow the postings to flow thru into CO.

04: Accrual Calculation Using the Target=Actual Method

Only used with Primary Cost Element accruals. Most companies accrue within FI and allow the postings to flow thru into CO.

22: Internal Cost Allocation

Used for settling costs from an order to a G/L account.

90: Cost Elements for Balance Sheet Accounts in FI

Only used in a statistical manner relative to Asset accounts.

Demonstration Overview

The objective of this Demo is to refresh the Cost Element Accounting master data.

1. Change Cost Element – Primary

Transaction: KA02

Menu Path: Accounting Controlling Cost Element Accounting Master Data Cost Element Individual Processing Change

Data for Demo:

Field Value

Cost Element 474212

Enter the Cost Element number and click .



Change the text in fields Name and Description to “Travel – Airfare”.

Click . The system will display a message at the bottom of the screen confirming the change.



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