plm230 project accounting

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PLM230Project Accounting with Networks

and RevenuesmySAP Product Lifecycle Management

Date

Training Center

Instructors

Education Website

Participant HandbookCourse Version: 2002 Q2Course Duration: 5 Day(s)Material Number: 50066144

An SAP course - use it to learn, reference it for work

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Copyright

Copyright © 2004 SAP AG. All rights reserved.

No part of this publication may be reproduced or transmitted in any form or for any purposewithout the express permission of SAP AG. The information contained herein may be changedwithout prior notice.

Some software products marketed by SAP AG and its distributors contain proprietary softwarecomponents of other software vendors.

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THESE MATERIALS ARE PROVIDED BY SAP ON AN "AS IS" BASIS, AND SAP EXPRESSLYDISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR APPLIED, INCLUDINGWITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR APARTICULAR PURPOSE, WITH RESPECT TO THESE MATERIALS AND THE SERVICE,INFORMATION, TEXT, GRAPHICS, LINKS, OR ANY OTHER MATERIALS AND PRODUCTSCONTAINED HEREIN. IN NO EVENT SHALL SAP BE LIABLE FOR ANY DIRECT,INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANYKIND WHATSOEVER, INCLUDING WITHOUT LIMITATION LOST REVENUES OR LOSTPROFITS, WHICH MAY RESULT FROM THE USE OF THESE MATERIALS OR INCLUDEDSOFTWARE COMPONENTS.

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About This HandbookThis handbook is intended to complement the instructor-led presentation ofthis course, and serve as a source of reference. It is not suitable for self-study.

Typographic ConventionsAmerican English is the standard used in this handbook. The followingtypographic conventions are also used.

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Example text Words or characters that appear on the screen.These include field names, screen titles,pushbuttons as well as menu names, paths, andoptions.

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About This Handbook PLM230

Type Style Description

Example text Screen output. This includes file and directorynames and their paths, messages, names ofvariables and parameters, and passages of thesource text of a program.

Example text Exact user entry. These are words and charactersthat you enter in the system exactly as they appearin the documentation.

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ContentsCourse Overview ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Course Goals.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .viiCourse Objectives .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .vii

Unit 1: Project Overview ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1Overview of Project Accounting .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Unit 2: Planned Costs ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Cost Planning Methods for Projects... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Activity Quantity Structure and Itemization ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36Process Costs and Overheads .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Easy Cost Planning... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Network Costing Paths and Versions ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Unit 3: Planned Revenues ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97Account Assignment for Sales Document .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Overview of Planned Revenue... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Sales Pricing .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121

Unit 4: Materials ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147Component Planning ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149Managing Stocks of Material Components ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174Stock Procurement Process.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .206

Unit 5: Commitment Management ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .243Project Commitments .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244Project Cash Management .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .257

Unit 6: Actual Costs..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .285Aspects of Project Execution... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .286

Unit 7: Actual Revenue... .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .339Billing Methods and Controls... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .340Milestone Billing.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .343Resource-Related Billing .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .380

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Contents PLM230

Unit 8: Period-End Closing..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .407Procedures for Period End Closing .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .409Project Interest Calculation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .429Cost Forecast and Progress Analysis... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .442Results Analysis .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .462Incoming Order Analysis.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .492Project Settlement ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .504Schedule Manager .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .526

Appendix 1: Additional Information ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .541

Index ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .577

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Course OverviewThis course covers the accounting processes for managing customer orientedand network controlled projects. It covers planning project costs usingnetworks and assigned orders, planning revenues using sales orders and theDynamic Items Processor. The course also discusses the benefits and useof project stock, managing commitments for a project, post actual costs to aproject, and post actual revenue to a project. In addition, the course explainsexecuting period-end closing processes for a project and assigned orders.

Target AudienceThis course is intended for the following audiences:

� Project team members responsible for managing projects� Project team members responsible for the installation and support of

Project Management� SAP consultants and partners

Course PrerequisitesRequired Knowledge

� PLM200 or CA080: Overview of Project Management� PLM210 or CA800: Project Management Structures� Basic knowledge of processes in accounting

Recommended Knowledge

� AC040: Cost and Profitability Management

Course GoalsThis course will prepare you to:

� Explain the accounting processes for managing customer-oriented andnetwork controlled projects.

Course ObjectivesAfter completing this course, you will be able to:

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Course Overview PLM230

� Plan project costs using networks and assigned orders.� Plan revenue using sales orders and the Dynamic Items Processor.� Explain the benefit and use of project stock.� Manage commitments for a project.� Post actual costs to a project.� Post actual revenue to a project.� Execute Period-end closing processes for a project and assigned orders.

SAP Software Component InformationThe information in this course pertains to the following SAP SoftwareComponents and releases:

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Unit 1Project Overview

Unit OverviewThis unit gives an overview of project accounting requirements. The unitdiscusses the master data, organizational structures and project structuresrequired to support the project requirements.

Unit ObjectivesAfter completing this unit, you will be able to:

� Describe the business requirements of the business example discussedwithin this course

� Explain the organizational structures required to support our projectrequirements

� Identify the types of master data required to support this project systembusiness process

� Describe the business requirements supported by the WBS and Networkstructure of the project

� Create a project using Project Builder

Unit ContentsLesson: Overview of Project Accounting .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Exercise 1: Turbine Customer Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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Unit 1: Project Overview PLM230

Lesson: Overview of Project Accounting

Lesson OverviewThis lesson provides an overview of project accounting requirements. Therelevant organizational structures and master data are discussed. The lessondescribes the business requirements supported by the Work BreakdownStructure (WBS) and Networks. It also explains how to use the Project Builderfor creation and maintenance of project structures.

Lesson ObjectivesAfter completing this lesson, you will be able to:

� Describe the business requirements of the business example discussedwithin this course

� Explain the organizational structures required to support our projectrequirements

� Identify the types of master data required to support this project systembusiness process

� Describe the business requirements supported by the WBS and Networkstructure of the project

� Create a project using Project Builder

Business ExampleYou are a part of the turbine system project, a customer project with a WorkBreakdown Structure and network activities. Multiple companies can belinked to this project.

You need to create a structure for the turbine system project using the ProjectBuilder.

Project Accounting

� Profitability� Cost Control� Cash Flow Analysis� Risk Management

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PLM230 Lesson: Overview of Project Accounting

Each turbine is unique to the customer and location in which it is installed.Your company wants to use the cost planning capability for projects to helpdetermine the price for customer sales inquiries, quotations, and ordersbecause each order is unique.

Your company wants to measure the profitability of each project independentof other projects for the same turbine, because multiple turbine projects can beunder development for a single customer at any given time. The companydecides that the revenue and cost of sales recognition should occur at theproject level. The sales order line item is not a controlling object in thisbusiness scenario.

Many components used in the production of a turbine are expensive. Thecompany decides not to stock these materials in inventory because the leadtime to procure these materials has no adverse effect on the ability to completethe project on time. Materials are purchased specifically for each project.Valuated project stock is used to cost these materials.

Turbine projects require significant outlays of cash during the initial phases.To offset these cash outlays, your company decides that customers mustmake a down payment when signing sales contracts. They should make aprogress payment when specific milestones in the project are achieved. Downpayment processing and milestone billings are used to ensure that the cashflow remains positive.

Figure 1: Project Organization Structure


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Projects are always unique to a controlling area.

There are two controlling objects types used for projects, Work BreakdownStructure (WBS) and Network (NWA).

Multiple companies are linked to a single controlling area. Project activitiescan be performed by logistical organizations (plants, sales organizations, andpurchasing organizations) belonging to a company defined for the controllingarea. For example, entities related to company 1000 and 2000 will performengineering work in the project.

Plants, Purchasing Organizations, and Sales Organizations are logisticsorganization elements.

Plants and Sales Organizations can be assigned to only one company code.

If you use centralized purchasing, a purchasing organization can purchase onbehalf of multiple companies. If not, a purchasing organization is assignedto only one company.

Figure 2: Supporting Master Data

The above graphic lists a few key pieces of master data created for this courseand business scenario.

You use this master data to support various business processes in future units.

Acronym Definitions

MM - Materials Management

SD � Sales & Distribution


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PP � Production Planning & Execution

FI � Financial Accounting

CO � Controlling

PS � Project System

Work Breakdown Structure

Figure 3: Turbine Project: WBS View

The above graphic represents the Turbine Project, T-100##, from a WBSperspective.

The WBS structure provides a functional (responsibility-oriented) view ofour project.

Network activities have been assigned to various WBS elements to show theproject phase in which activities will be performed.

Your company will use the project cost plan to develop sales pricing andbilling plans for the sales inquiry, quotation, or order. During this course,you will link the project to sales by making an account assignment of theappropriate WBS element on the sales inquiry, quotation, or order.


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Figure 4: Work Breakdown Structure: Functions

Business functions supported by WBS are identified above.

The WBS shows the aggregated cost and scheduling data determinedautomatically from the network activities, because our company is usingnetworks.

The company uses WBS elements to:

� Monitor project progress� Measure actual cost/dates versus plan from an aggregate level� Determine project cost and sales prices� Execute period-end accounting processes such as Result Analysis and

Settlement


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Figure 5: Customer Project T-100##: Project Structure

Use operative indicators to define the characteristics of a WBS element andto specify tasks that are performed by the WBS element when the projectis executed:

� The WBS elements for which you want to plan costs are flagged asplanning elements.

� The WBS elements to which you want to post actual costs are flaggedas account assignment elements.

� The WBS elements for which you want to plan or post revenues areflagged as billing elements.

The statistical indicator specifies if a WBS element is used only for statisticalpurposes or if it works with real costs.

In the example, you want to perform planning as far as level two in theproject hierarchy. Lower-level WBS elements, for example, level three arepure account assignment elements.


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Network

Figure 6: Turbine Project: Network View

The diagram represents your Turbine Project, T-100##, from a networkperspective.

The network provides a view of the activities (steps) to be performed andtheir relationship.

In the Project Builder, you create activities for WBS elements. Activities areassigned to WBS elements and the planned and actual data for activities(dates, costs, and payment data) can be aggregated at the WBS element level.

Activities are linked by relationships, which results in a causal and temporalactivity sequence.

At the same time, activities form a quantity structure for planning:

� Dates (occurs automatically via scheduling)� Costs (occurs automatically via costing)� Resources (internal and external activities)� Material requirements (using the assigned components)


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Your turbine project has two linked networks. A separate network wascreated for the engineering activities to be performed in the UK. Network twois assigned to the WBS element T-100##.1.2 of company code 2000 (IDES UK).Engineering work is executed at work centers in plant 2000 (London UK).Relationships have been defined between this network and your primaryproject network to facilitate the development of a total project schedule.

Figure 7: Activities and Networks: Functions

The diagram identifies the business functions supported by NetworkActivities.

Your company uses Network Activities:

� To automatically schedule work (services) performed by vendors� To automatically schedule and cost work performed by company

resources� To automatically schedule and plan the delivery of the components from

vendors� With milestones to trigger automatic invoicing (billing) to the customer

when the identified project phases have been completed� To identify when cash receipts and consumptions will occur and manage

overall project cash flow


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Project Builder

Figure 8: Editing the Project Using the Project Builder

In this course, Project Builder is used as the primary tool to create andmaintainprojects. You can also use tools available in the Project Planning Board andSpecial Maintenance Functions menus to create and maintain a project.

You can use the Project Builder to create or change objects in a project (projectdefinition, WBS elements, activities, activity elements, PS texts, documents,milestones, material components). You can use detail screens, lists or graphics,such as hierarchy graphic or network graphic (1 - 4) for this purpose.

Besides manually creating project structures, you can use operative projectstructures (work breakdown structures or networks) or standard structures(standard work breakdown structures, or standard networks) as templates (7).

You can also include WBS, standard WBS, and standard networks in anexisting project structure (5).

When you create projects, you can copy (6) an operative project or a standardproject with all the lower-level objects (WBS elements, activities, PS texts,documents, milestones, and components).


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Exercise 1: Turbine Customer Project

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a turbine project in the system

Business ExampleThe turbine project is a customer project with a Work Breakdown Structureand network activities. Two companies are responsible for executing theseprojects. You will use the Project Builder to create a structure for the turbinesystem project, which comprises WBS elements and activities.

Task:You create the project by copying data from a standard structure.

Using the Project Builder, create a project called T-100##. To do this, copythe standard project T-20000.

Project System menu:

Project → Builder (double-click)

Choose Create → Copy Project.

1. In the dialog box that appears, enter the following data:

Field Name ValuesProject def. T-100##Project profile Turbine standardTemplate Std proj.def.

T-20000

Leave other fields as they are

Choose Create project Enter.

Choose Continue Enter if you get the Warning Message Enter a StartDate. If not, today�s date will be used.

2. In the project definition basic data, enter the following data:

Continued on next page


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Field Name ValuesDescription GR## Turbine ProjectStart TodayFinish Today + 18 months


3. Expand the project structure.

Choose Expand all.

Hint: If you do not see the button, shift the structure tree sectionto the right until the button is visible.

Hint: On the left of the structure, you can see various objects thatwere copied from the standard project:

+ Project definition (1st line)

+ WBS elements

+ Activities

+ Milestones

Activities are grouped in a network with the temporary number(%00000000001).

Now, plan material costs for components that will not be assigned toactivities until later. This preliminary planning is important for quotationcosting which can be performed at this point using the project. Inreporting and calculation processes, planned values are automaticallyreduced when components are assigned later. This prevents the planningof material costs twice.

4. Go to the Assignments detail screen for activity 3000 (Preliminarypurchase orders).

Place the cursor on activity 3000 in the structure.

Select the Assignments tab.

Maintain the following data:



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Field Name ValuesMat.planning 100000

Go to the Assignments detail screen for activity 3100 and enter thefollowing amount:



Go to the Assignments detail screen for activity 3200, and enter thefollowing amount there:






5. Assign the responsible persons to all the WBS elements using the masschange transaction.

To do this, call up the mass change function for the project.

Return to the Project Definition in the structure tree before performingthe mass change.

Choose Mass change.

Select the field Person responsible for WBS elements.

WBS elements tab page.



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Select the appropriate field on the right of the dialog box. If the dialogbox does not appear, select the Choose Fields icon on the WBS Elementstab page.

Move the field to the left of the screen using the left arrow.

Choose Continue Enter.

Enter the following data:

Field Name ValuesPerson responsible New Value ##

Process the data.

Return to the project from the log display.

Choose Execute.

Choose Back.

6. Save the project T-100##.

Confirm messages that appear.

Choose Save.


Return to the main SAP menu.

Choose Exit.


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Solution 1: Turbine Customer ProjectTask:You create the project by copying data from a standard structure.

Using the Project Builder, create a project called T-100##. To do this, copythe standard project T-20000.


Project → Builder (double-click)

Choose Create → Copy Project.

1. In the dialog box that appears, enter the following data:

Field Name ValuesProject def. T-100##Project profile Turbine standardTemplate Std proj.def.

T-20000


Choose Create project Enter.

Choose Continue Enter if you get the Warning Message Enter a StartDate. If not, today�s date will be used.

a)

2. In the project definition basic data, enter the following data:

Field Name ValuesDescription GR## Turbine ProjectStart TodayFinish Today + 18 months


a)

3. Expand the project structure.



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Choose Expand all.

Hint: If you do not see the button, shift the structure tree sectionto the right until the button is visible.

Hint: On the left of the structure, you can see various objects thatwere copied from the standard project:

+ Project definition (1st line)

+ WBS elements

+ Activities

+ Milestones

Activities are grouped in a network with the temporary number(%00000000001).

Now, plan material costs for components that will not be assigned toactivities until later. This preliminary planning is important for quotationcosting which can be performed at this point using the project. Inreporting and calculation processes, planned values are automaticallyreduced when components are assigned later. This prevents the planningof material costs twice.

a)

4. Go to the Assignments detail screen for activity 3000 (Preliminarypurchase orders).


Select the Assignments tab.

Maintain the following data:






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Go to the Assignments detail screen for activity 3200, and enter thefollowing amount there:






a)

5. Assign the responsible persons to all the WBS elements using the masschange transaction.

To do this, call up the mass change function for the project.

Return to the Project Definition in the structure tree before performingthe mass change.

Choose Mass change.

Select the field Person responsible for WBS elements.

WBS elements tab page.

Select the appropriate field on the right of the dialog box. If the dialogbox does not appear, select the Choose Fields icon on the WBS Elementstab page.

Move the field to the left of the screen using the left arrow.





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Field Name ValuesPerson responsible New Value ##

Process the data.

Return to the project from the log display.

Choose Execute.

Choose Back.

a)

6. Save the project T-100##.


Choose Save.



Choose Exit.

a)


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Lesson Summary

You should now be able to:� Describe the business requirements of the business example discussed

within this course� Explain the organizational structures required to support our project

requirements� Identify the types of master data required to support this project system

business process� Describe the business requirements supported by the WBS and Network

structure of the project� Create a project using Project Builder


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Unit Summary PLM230

Unit SummaryYou should now be able to:� Describe the business requirements of the business example discussed

within this course� Explain the organizational structures required to support our project

requirements� Identify the types of master data required to support this project system

business process� Describe the business requirements supported by the WBS and Network

structure of the project� Create a project using Project Builder


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PLM230 Test Your Knowledge

Test Your Knowledge

1. Only one company can be linked to a single controlling area in projectaccounting.Determine whether this statement is true or false.□ True□ False

2. What are the purposes for which a company can use WBS elements?

3. Your company can use Network Activities to automatically schedule andcost work performed by company resources.Determine whether this statement is true or false.□ True□ False


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Test Your Knowledge PLM230

Answers

1. Only one company can be linked to a single controlling area in projectaccounting.

Answer: False

Multiple companies can be linked to a single controlling area in projectaccounting.

2. What are the purposes for which a company can use WBS elements?

Answer: A company can use WBS elements e.g. to:

� Monitor project progress� Measure actual cost/dates versus plan from an aggregate level� Determine project cost and sales prices� Perform period-end accounting processes such as Result Analysis

and Settlement

3. Your company can use Network Activities to automatically schedule andcost work performed by company resources.

Answer: True

Your company can use Network Activities to automatically schedule andcost work performed by company resources.


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Unit 2Planned Costs

Unit OverviewThis unit starts by giving an overview of cost planning for projects. It thendiscusses the use of activities in planning by explaining concepts such as costplanning, internal activities, externally processed activities, and cost planningusing cost activities. The unit also explains about process costs and overheads.


� Explain different cost planning methods for projects� Describe how an order can be assigned to a WBS element or activity� Understand the role of appended and apportioned orders� Explain the use of the costing variant for calculating the planned costs

for networks and assigned orders� Explain the concept of cost planning in networks� Understand the cost calculation for internal activitites� Describe the cost calculation for externally processed activities� Explain cost planning using cost activitites� Understand the concept of Activity-based Costing� Explain how to construct an overhead costing sheet and how it is

assigned to a cost object� Use Easy Cost Planning� Demonstrate the different network costing paths� Understand the role of versions in project cost planning� Identify the tables for network costing in the Project System customizing

Unit ContentsLesson: Cost Planning Methods for Projects.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25


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Unit 2: Planned Costs PLM230

Lesson: Activity Quantity Structure and Itemization... . . . . . . . . . . . . . . . . . . . . . . . . . . 36Exercise 2: Network Activities .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Lesson: Process Costs and Overheads ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Lesson: Easy Cost Planning .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Lesson: Network Costing Paths and Versions .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Exercise 3: Master Data ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Exercise 4: Evaluation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81Exercise 5: Customizing... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85


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PLM230 Lesson: Cost Planning Methods for Projects

Lesson: Cost Planning Methods for Projects

Lesson OverviewThis lesson gives an overview of cost planning methods for projects. It focuseson the planned costs determined by activities and assigned orders.The lessonalso explains the use of the costing variant for calculating the planned costsfor networks and assigned orders.


� Explain different cost planning methods for projects� Describe how an order can be assigned to a WBS element or activity� Understand the role of appended and apportioned orders� Explain the use of the costing variant for calculating the planned costs

for networks and assigned orders

Business ExampleAs project controller of the turbine system project, you need to estimate costsfor your project. The project includes WBS elements, networks, and assignedorders.


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Cost Planning through Orders

Figure 9: Cost Planning in Projects

You can plan costs for a project using two techniques:

� Manual cost planning in the WBS� Automatic cost planning using networks and assigned orders

Manual cost planning in the WBS involves four methods:

� Overall planning (structure-oriented planning) in its most basic form,where you enter costs for each WBS element. You can break down figuresby the fiscal year, if required.

� Detailed planning of primary costs and activity inputs (cost elementplanning), which is cost element-based and period-based.

� Unit costing, where you use a profile to enter quantities (materials,internal activities, external services, and variable items) for each WBSelement. This type of planning is cost element-based (see Appendix).

� Easy Cost Planning from Release 4.6C, which offers an easy-to-use tool toplan costs by cost elements in a quantity structure. You can use ExecutionServices to enter commitment and actual data for planned costs.


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When using networks and activities, planned costs are automaticallycalculated based on the resource requirements identified for activities andoperations. Resources provide a type of quantity structure that can bedynamically valued by the system. This method has the following advantages:

� The resulting plan data can be copied to new projects.� If parts of the project are rescheduled, cost planning is shifted

automatically with activities.� Costs for network activities are planned by cost element and period.

Figure 10: Order Categories and Order Types

Orders are a type of business transaction. The characteristics of an order aredetermined by the order category, for example, a network. Order types arecreated for specific order categories and available for the relevant applications.

You can define order types within an order category. The order type describeshow the order is controlled. Customizing includes two tables, one for theorder type and another for the order type/plant combination.


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You use the order category to control:

� Number assignment� Default value settings� User-specific status management� User-specific field controls

You use plant and order type parameters to control:

� If the network is activity- or header-assigned� Planned and actual costing variants� The settlement rule strategy

Figure 11: Project: Assignment of Orders

You can assign various SAP R/3 orders to a project. For example, networks,internal orders, production orders, and plant maintenance orders. You canuse project hierarchy reports to evaluate these assigned orders with the WBS.

Each order is a cost object with its own costing parameters such as plannedcosting variant, actual costing variant, and overhead sheet. The planned costsof assigned orders are used to determine the planned costs of the project.

You assign orders to the project either by assigning a WBS element to the orderheader or by assigning the order to a network and activity as a subnetwork.If the assignment is required only for cost control and analysis, you need toassign the order to the relevant WBS element. If the assignment is required


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for both scheduling and cost control, you need to assign the order as asubnetwork. The WBS element is derived from the network activity. Note thatproduction orders cannot be assigned as subnetworks.

Appended and Apportioned Orders

Figure 12: Appended and Apportioned Orders

Any type of assigned order can affect the project cost plan.

When customizing the order value update, you stipulate if the order ornetwork is appended and when an order is apportioned for each ordercategory and type, which controls how the planned cost of an order affects theplanning and assigned values of the assigned WBS element.

When an order is appended, planned values for the order are included in theplanned value of the corresponding WBS element.

� If the appended indicator is set, the order planned value increases the WBSelement planned value. The information system displays the total as theWBS plan. When cost planning is taken over as the budget, the valuesfrom appended orders also contribute to the budget.

� If the appended indicator is not set, the order planned value is not addedto the WBS planned value. In budgeting, the plan total for such ordersmust be manually added so that these orders can use funds later.


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When an order is apportioned, planned order costs increase the assignedvalues for the relevant WBS element. These values bind the budget until youclose the order.

� When the funds commitment in plan indicator is set, the plan value ofthe order is added to the committed value of the WBS element as soonas the order has the status created.

� When the funds commitment in plan indicator is not set, the plan value ofthe order is not added to the committed value of the WBS element untilthe order has the status released.

Figure 13: Tables for Order Values

You can use the appended indicator to specify, per order category, if an order isappended or if planned values for the order are included in the planned valueof the corresponding WBS element.

After all the orders are released, they are apportioned, which means thattheir plans, commitments, and actual values are fund assignments against thefunds in the project. The order value table provides an indicator that is usedto make orders apportioned earlier at the created stage.

You can set the appended and apportioned indicator based on the ordercategory, order type, and controlling area.


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An exception to apportionment at release is in the case of networks forpreliminary planning. In Project System customizing, you can specify thenetwork types to be used for preliminary planning. Preliminary planningnetworks are never apportioned. Their related plan values do not increase theassigned value for the relevant WBS element.

Costing Variants

Figure 14: Costing Parameters for: Network

All orders are cost objects, which have the ability to calculate planned costsand collect actual costs. This is controlled by planned and actual costingvariants assigned to the order type and plant parameters.

Networks are orders of order category 20.

The costing variant controls planned cost calculation and the collection ofactual costs. It is necessary to assign various costing variants for plannedand actual costs.

The valuation variant is a component of the costing variant. The valuationvariant defines the valuation procedure for materials, internal activities,external activities, and business processes. It can also assign an overheadcosting sheet to the network or activity.


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The planned cost calculation determines when planned costs are calculated.Costs can be calculated each time the network is saved or by executing eithersynchronous or asynchronous costing functions.

Default values for the network type and plant are transferred to the networkas the network is created. You can change costing variants and the plannedcost calculation mode from the network header.

Figure 15: Costing Variant: Valuation Variant

The valuation variant determines the prices used by the system to valuecomponent materials, activity types, processes, subcontracting, and externalactivities.

The valuation variant searches the various price sources listed for eachstrategy. Price sources are searched in the sequence in which they were enteredin the strategy. The price that is located first is selected for the cost estimate.

For materials, the valuation variant selects a price from either the materialmaster record or purchasing data.

For activity types and processes, the valuation variant selects the price fromeither Cost Center Accounting or Activity-Based Costing. You enter theplanned/actual version in the valuation variant that is to be used in the costing.

The strategy to value an externally processed activity can be either the pricefrom the purchasing information record or the price from the activity.


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Network Account Assignment

Figure 16: Header-Assigned Networks

Header-assigned networks store all the activity and material componentcosts at the network header level and behave in the same way as all otherorder categories.

Costs are summarized in WBS elements by assigning the network header toa WBS element. Assigning activities to WBS elements is, in this case, onlyused for summarizing dates.

If you assign networks to sales orders (which are not assigned to a project),use header-assigned networks since no assignments can be made to a salesorder item in the network activity.


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Figure 17: Activity-Assigned Networks

In the case of networks, activities can be account assignment objects. Costsare collected on activities and not on the network header. Plant/networktype parameters determine if the network header or network activities arecost objects. If you choose the Network, all activities in the network shouldbe assigned to the same WBS element. Choose the activities as accountassignment object if activities are assigned to various WBS elements.

Activity-assigned networks are usually used when activities are assignedto various WBS elements. Header-assigned networks should be used whennetworks are assigned to sales orders without WBS. Header-assignednetworks can also be used when the entire network is assigned to a singleWBS element.

In activity-assigned networks, each activity in the network is an accountassignment object.

You can analyze planned costs, commitments, and actual costs for eachactivity.

Costs are aggregated and displayed for WBS elements to which activitiesare assigned.

Activity account assignment is a special feature of networks. All other ordertypes are header-assigned. Activity account assignment is controlled bysetting the appropriate indicator in the Parameters for network type table.

Controlling parameters such as costing variants are defined in the networkheader. Other parameters, such as overhead sheet, Results Analysis key, andsettlement rules are defined for each network activity.


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Lesson Summary

You should now be able to:� Explain different cost planning methods for projects� Describe how an order can be assigned to a WBS element or activity� Understand the role of appended and apportioned orders� Explain the use of the costing variant for calculating the planned costs

for networks and assigned orders


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Lesson: Activity Quantity Structure and Itemization

Lesson OverviewThis lesson describes the quantity structure of a network, as it relates to costplanning. It explains the cost planning in internal and externally processedactivitites and the different methods to calculate costs for cost activities.


� Explain the concept of cost planning in networks� Understand the cost calculation for internal activitites� Describe the cost calculation for externally processed activities� Explain cost planning using cost activitites

Business ExampleAs a project controller for the turbine system project, you need to know howthe planned costs are determined for various items and objects in projectstructure.


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PLM230 Lesson: Activity Quantity Structure and Itemization

Cost Planning in Networks

Figure 18: Planned Costs in Networks

When you plan dates and resources in network activities, the systemautomatically determines the corresponding planned costs. Planned costscan be automatically determined for all order types that include a quantitystructure such as plant maintenance, production, and service orders.

The activities and components provide a type of quantity structure that thesystem can value.

All cost-relevant items should identify a cost element. For internal activitiesand processes, this is determined by the secondary cost element assignedin the activity type master record. For external activities, external services,and non-stock materials, it is identified in the activity detail screen by theGeneral Ledger (GL) account that is defined for the purchasing transaction.For stock materials, cost-relevant items are determined through automaticaccount determination. Overhead cost allocations are assigned the secondarycost element through the overhead sheet.


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Planned costs are determined for the following objects:

� Activity inputs for internally processed activities� Primary costs for externally processed activities and services� Primary costs for general cost activities� Primary costs for material components

In addition to the cost of the activity, the planned costs for an activity caninclude the following items:

� Components, to include theMaterials Planning allowance� Overhead determined through an overhead costing sheet� Process costs determined through a process template� Activity elements

Figure 19: Project Cost Planning Using Activities

Costs can be calculated automatically based on the activities created and ifthey are assigned to WBS elements or defined in a standalone network.

Costs that are calculated are determined by period based on the scheduledetermined by the network.


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This process has significant advantages over manually planning primarycosts or activity inputs because:

� Cost planning is integrated with time scheduling and resource planning.Utilizing activities enables a single data item to update scheduling,resource planning, and cost planning.

� If the schedule for an activity or work package is shifted, cost planningdynamically recalculates the period costs.

� When creating new networks by referencing standard or operativeproject data, activity details are also copied. This enables the costplanning of one project to be copied to a new project.

Cost Calculation for Internal Activities

Figure 20: Internal Processing

You need to maintain work data for an activity to enable the system tocalculate costs for internal activities. The control key determines if plannedcosts are calculated for the activity.

To be able to calculate planned costs, you need to specify the amount of workinvolved and the work center that should perform the work.


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The work center master record contains data for costing activities. This isaccomplished by the assignment of the work center to a cost center andmaintaining a default activity type and costing formula. The activity typecan be changed when maintaining the network activity. Work centers alsocontain the required scheduling and capacity data for scheduling and capacityplanning.

In cost center planning, a rate is stored for the activity type and cost center.The rate is stored for each period.

The costs of internally processed activities and general cost activities can bedistributed as required over the network duration. Distribution is controlledusing a distribution key that can be stored in the activity. If a distribution keyis not maintained in the activity for internally processed activities, the systemuses the key from the work center (capacity view). If a distribution key isnot maintained in the work center also, the costs are distributed evenly overthe earliest dates in the activity. The valuation variant determines if the costcalculation should use the rate of the specific period in which the activity isplanned or a single rate such as the average rate for the fiscal year.

Example: An activity straddles periods 11 and 12 with a total work time of 150hours. The dates and the distribution key used for the activity assign 50 hoursto period 11 and 100 hours to period 12. If the rate is $100 per hour for period11 and $80 per hour for period 12 and the valuation for a period is stipulated,the costs are $5000 for period 11 and $8000 for period 12.

Figure 21: Planned Internal Activity Costs


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Internal activities are valued based on planning data from the activity, workcenter, and price planning data from the cost center and activity type.

The activity defines the quantity of activity type and the work center. Theschedule determines the time periods in which the activity is scheduled tooccur.

Work center data contains the cost center and formula for cost planning.

Cost center planning specifies the planned output price to consume thatactivity type at that cost center.

The price used for the activity allocation is controlled by the valuation variantassigned to the planned costing variant.

Figure 22: Internal Activity Details and Work Center


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The details of the internal activity are relevant for the calculation of plannedcosts.

� The control key determines if the activity is relevant for cost allocation.� The work center master record is assigned to a cost center.� The planned quantity of work is determined.� The activity type defaults from the work center master record.� The planned rate for the work is determined based on the planning data

for the activity type and cost center.� The formula determines how the work quantity is calculated. In the

formula SAP008, the work quantity is equal to the value in the field work.

Cost Calculation for Externally Processed Activities

Figure 23: External Processing/Services

When procuring external services (outsourcing), you can create services orexternally-processed activities. For example, you can commission a freelanceengineer to design and build a machine.


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When you create such an activity, a purchase requisition is also created andprocessed in purchasing. You can access data from purchasing for externalprocessing such as a purchasing info record, which contains prices anddelivery times for external processing.

Externally processed activities give rise to planned costs that are equivalentto the prices from the purchasing info record or the price in the activity.The valuation variant for the network costing variant determines the pricethat is used for the valuation. When the purchase requisition is activatedand converted to a purchase order, the activity is also shown as a purchaserequisition commitment or purchase order commitment.

The account assignment category in the purchase order determines if thegoods and/or invoice receipt is valued or if it gives rise to actual costs. Ifthe goods receipt is valued, actual costs are posted to the activity and thecommitment is reduced by the amount of the purchase order. If the invoiceis posted for an amount different that the purchase order price, the invoiceposting adjusts the actual costs.

Service activities are maintained for purchases of services. Creating a serviceactivity establishes the link to SAPMaterials Management Services (MM-SRV).Unlike externally processed activities, service activities contain a servicespecification containing planned activities and value limits for unplannedactivities. The service specification is copied to the purchase order, which canbe modified by purchasing. Service activities also give rise to planned costs orpurchase requisition/order commitments. Instead of goods receipts, servicesare later entered and accepted.

Figure 24: External Processing Details


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The following information about externally processed activities is relevantfor the calculation of planned costs:

� The control key determines if the activity is relevant for cost allocation.� The purchasing info record can be used to link the requirement to a

vendor with a predetermined price, material group, and purchasinggroup. A contract can also be entered in the Outline Agreement field toprovide the same information. If neither an info record nor outlineagreement is available, the information for purchasing group, materialgroup, and price should be manually entered before a requisition canbe created.

� The planned quantity of external processing is determined.� The cost element is defaulted for externally processing activities based on

the network profile.

Cost Planning for Cost Activities

Figure 25: Cost Planning Using Cost Activities

You can use general cost activities to plan all other costs that cannot bemapped though internally processed activities or externally processed/serviceactivities. For example, travel expenses for a meeting or transportationcharges for freight. When expenses are later recorded through either traveland expense postings or accounts payable invoices, the general cost activitycan be assigned as the cost object.


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In the general costs activity, you can enter a description, the amount andcurrency, a cost element, a duration, and a distribution key to distribute thecosts.

Costs are distributed using the scheduled duration for general costs activity.Distribution is controlled using the distribution key for the activity. If adistribution key is not maintained, costs are distributed evenly over theearliest dates in the activity.

You can create a unit cost plan for the general costs activity. Detailed costing ispossible even at an early stage of the project such as during the sales pricingphase.

Figure 26: Costs Activity Details

The following information about the costs activity is relevant for thecalculation of planned costs:

� The control key determines if the activity is relevant for cost allocation.� The amount of the cost activity can be planned as a single cost element, a

unit costing that enables detailed planning with multiple cost elements,or an invoicing plan.

� The cost element is defaulted for cost activities based on the networkprofile.


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Figure 27: Invoicing Plan

If the expense for an external activity or purchased component is not paidwith a single invoice, you can create a detailed payment schedule using aninvoicing plan. You can create invoicing plans directly for network activities(external, service, or general costs) or externally procured components.

It is possible to plan costs and outgoing payments on the basis of datesentered in the invoicing plan. Costs are not simply distributed over theactivity duration, but are calculated precisely at the times specified in theinvoicing plan.

You can create an invoicing plan manually or copy a reference invoicingplan. The reference invoicing plan aligns cost and payment dates relative toa start date.

You can also copy billing milestones as dates to the invoicing plan of theactivity. If you copy milestones rather than manually create them, youcan adjust them with the dates in the invoicing plan if the activities arerescheduled.

You cannot create invoicing plans with a unit costing (for general costsactivities or material components).


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Exercise 2: Network Activities

Exercise ObjectivesAfter completing this exercise, you will be able to:� Perform cost planning using activities

Business ExampleThe turbine project you created includes a network and various activities. Thebenefit of the network quantity structure is that activities are costed when yousave your data.

� This type of cost planning has important advantages over manual costplanning:

� It can be copied to other projects and stored in standard networks.� It is easy to shift in time, if, for example, you need to postpone project

work packages.� Scheduling, capacity requirements planning, and procurement are

triggered by activities (integration of planning).

You will use activities to plan costs for your turbine project.

When the activities are assigned, the costs of the activities are displayed forthe WBS elements.

Task:You have already planned costs for your turbine project T-100## using thequantity structure of the activities created.

This quantity structure was costed automatically when you saved your data.

The following exercises show you how to determine the origin of activity costs.

1. Call up the Project Builder again.


Project → Project Builder

2. Change the project T-100## by double-clicking the appropriate line inthe worklist.

Worklist section, Last projects processed.



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Double-click line GR## Turbine Project.

3. Now expand the entire structure.

Choose Expand all.

4. Now go to the detail screen of externally processed activity 1000.

Position the cursor on activity 1000 the structure.

Note the fields that have a direct effect on costing: Work center, Work,Activity type, Control key, and Distribution capacity requirements. Theduration of each activity also has an effect on cost planning.

Note the work center, plant, work and activity type.

Field Name ValuesWork Center 2000Plant 1300

Work 400 hrActivity type 1421

Call up the cost report for the activity from the detail screen.

Position the cursor on the activity number in the detail screen

Right-click: Report planned/actual.

Note that the Production Labor activity cost and the overhead costs relatedto this internal activity are displayed in the report.

Return to the Project Builder.

Choose Back .

5. Now navigate to the detail screen of externally processed activity 1300.

Position cursor on activity1300 in the structure.

The external processing data screen contains data that is important forcosting the external processing activity:

Purchasing info record, Price, Activity quantity, Cost element, Control key, andthe indicator Reservation/purchase requisition.

Call up the cost report for this activity too.



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Note that theExternal Procurement Cost and the overhead cost related tothis external activity are displayed in the report.


Choose Back.

6. Navigate to the detail screen of general cost activity 0200.

Position the cursor on activity 0200 in the structure.

Note the fields that have a direct effect on costing:

Amount, Distribution costs, Cost element.

Now create a unit cost plan for the activity.

Create a unit cost plan by copying data from an existing unit cost plan(referencing a base planning object).

Choose Unit Costing (to the right of the amount).

In the dialog box that appears, enter the following data:

Field Name ValuesCosting variant PS05Base plan obj. 1300


Save the unit costing (temporary save).

Choose Save.

Note that the Amount and Cost element fields are disabled. Unit cost planvalues are not displayed in the cost report until the activities are recosted.

7. Valuation using a costing variant:

Branch to the header of your first network.

Position the cursor on the first network in the structure tree.

Now call up the control data for the network header:



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Control tab page.

Hint: In the Costing field group, you can see the costing variantfor planned (PS02) and actual (PS03) network costing and theindicator to calculate planned costs.

8. Overhead costing sheet:


In the Assignments tabbed page, note the fields that affect overheadand business process cost allocations. The costing sheet identifies theoverhead allocations to be applied.

The overhead costing sheet is 130000


Position the cursor on the activity number in the detail screen.



Choose Back.

9. Assign the overhead key 1300 to activities 0100 and 1110 in your T-100##project. The overhead key and costing sheet values are used to assign thetemplate to be used for the allocation of business process costs.

Branch to the detail screen for the activity 0100. Select the Assignmentstab to display the assigned costing sheet. Enter overhead key 1300.Repeat the process for activity 1110.

The selection of a process cost template is based on the costing sheet,the overhead key, and the environment. Networks are assigned toenvironment 004.

10. Save your project.

The networks were automatically costed when you saved your data.

Choose Save.

Confirm the messages in dialog boxes.

Click Back .


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Solution 2: Network ActivitiesTask:You have already planned costs for your turbine project T-100## using thequantity structure of the activities created.

This quantity structure was costed automatically when you saved your data.

The following exercises show you how to determine the origin of activity costs.

1. Call up the Project Builder again.



a)



Double-click line GR## Turbine Project.

a)

3. Now expand the entire structure.

Choose Expand all.

a)

4. Now go to the detail screen of externally processed activity 1000.

Position the cursor on activity 1000 the structure.

Note the fields that have a direct effect on costing: Work center, Work,Activity type, Control key, and Distribution capacity requirements. Theduration of each activity also has an effect on cost planning.

Note the work center, plant, work and activity type.



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Field Name ValuesWork Center 2000Plant 1300

Work 400 hrActivity type 1421


Position the cursor on the activity number in the detail screen


Note that the Production Labor activity cost and the overhead costs relatedto this internal activity are displayed in the report.


Choose Back .

a)

5. Now navigate to the detail screen of externally processed activity 1300.

Position cursor on activity1300 in the structure.

The external processing data screen contains data that is important forcosting the external processing activity:

Purchasing info record, Price, Activity quantity, Cost element, Control key, andthe indicator Reservation/purchase requisition.

Call up the cost report for this activity too.


Note that theExternal Procurement Cost and the overhead cost related tothis external activity are displayed in the report.


Choose Back.

a)

6. Navigate to the detail screen of general cost activity 0200.




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Note the fields that have a direct effect on costing:

Amount, Distribution costs, Cost element.

Now create a unit cost plan for the activity.

Create a unit cost plan by copying data from an existing unit cost plan(referencing a base planning object).

Choose Unit Costing (to the right of the amount).

In the dialog box that appears, enter the following data:

Field Name ValuesCosting variant PS05Base plan obj. 1300


Save the unit costing (temporary save).

Choose Save.

Note that the Amount and Cost element fields are disabled. Unit cost planvalues are not displayed in the cost report until the activities are recosted.

a)

7. Valuation using a costing variant:

Branch to the header of your first network.

Position the cursor on the first network in the structure tree.

Now call up the control data for the network header:

Control tab page.

Hint: In the Costing field group, you can see the costing variantfor planned (PS02) and actual (PS03) network costing and theindicator to calculate planned costs.

a)

8. Overhead costing sheet:




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In the Assignments tabbed page, note the fields that affect overheadand business process cost allocations. The costing sheet identifies theoverhead allocations to be applied.

The overhead costing sheet is 130000


Position the cursor on the activity number in the detail screen.



Choose Back.

a)

9. Assign the overhead key 1300 to activities 0100 and 1110 in your T-100##project. The overhead key and costing sheet values are used to assign thetemplate to be used for the allocation of business process costs.

Branch to the detail screen for the activity 0100. Select the Assignmentstab to display the assigned costing sheet. Enter overhead key 1300.Repeat the process for activity 1110.

The selection of a process cost template is based on the costing sheet,the overhead key, and the environment. Networks are assigned toenvironment 004.

a)

10. Save your project.

The networks were automatically costed when you saved your data.

Choose Save.

Confirm the messages in dialog boxes.

Click Back .

a)


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Lesson Summary

You should now be able to:� Explain the concept of cost planning in networks� Understand the cost calculation for internal activitites� Describe the cost calculation for externally processed activities� Explain cost planning using cost activitites


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Lesson: Process Costs and Overheads

Lesson OverviewThis lesson describes the basic principles of Activity-based Costing andprocess costs for projects. It explains the role of costing sheets in overheadcalculations and how to assign costing sheets to projects.


� Understand the concept of Activity-based Costing� Explain how to construct an overhead costing sheet and how it is

assigned to a cost object

Business ExampleAs a project controller, you need to know how overheads are determinedfor your projects. You are interested in reducing overheads by improvingprocesses within your company.


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PLM230 Lesson: Process Costs and Overheads

Activity-based Costing

Figure 28: Process - Definition and Rate

Another form of cost allocation is activity-based costing. The activity-basedcosting component allocates process quantities based on resource and processdrivers, which enables you to define cost allocation more precisely along thevalue-added chain than is possible with overhead rates.

Activity-based costing supplies strategic information that can be used to:

� Reduce overheads by improving processes� Increase profitability by highlighting unprofitable products or customers

Advantages of activity-based costing:

� Transparent overheads� Parallel quantity and value flows� Precise assignment of internal activities to consumer

Using cost drivers instead of overheads, you can avoid the "peanut buttereffect", and distribute overheads evenly among all the cost drivers.

Processes in activity-based costing are full-blown controlling objects. Asecondary cost element is assigned to the process master record. As in the caseof cost centers/activity types, prices for the process can be maintained either


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politically or calculated iteratively using activity and cost input planning.When a process is allocated to a cost object, the process is credited using a ratefor the process and the cost object is debited.

Processes are debited to cost objects or profitability segments usingactivity-based costing.

Figure 29: Process Costs for Projects

You can allocate process costs to cost objects or profitability segments byassigning a process template, which is dynamically determined during costcalculation. In the Project System, you can assign templates to WBS elements,networks (header assigned), or network activities. You make the assignmentbased on the overhead costing sheet and overhead key that is assigned tothe cost object.

A single process template can allocate multiple processes or include otherprocess templates. You enter one process for each line in the process template.By referencing a subtemplate in a template, you can create multi-leveltemplate allocations.

The cost driver determines the quantity used by the cost object. This enablesyou to allocate the relevant values to all the levels in the process hierarchy asfar as cost objects or profitability segments. Cost drivers can originate fromvarious sources in the R/3 System or external systems. For example, weight(material master), number of components, activities of a particular category,


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work center (network), or number of sales orders for market segment (LIS).The quantities determined by the cost driver are multiplied by the price of theprocess. The resulting value is then charged to the cost object (in the example,the WBS or network/activity) and the process is credited.

Purchasing process example:

You determine the number of externally processed or service activities andthe number of directly procured components in the network. The total ismultiplied by the price of one purchasing transaction (vendor selection,purchase order entry, and purchase order monitoring).

Course AC420 describes the functions of activity-based costing.

Costing Sheet in Overhead Calculation

Figure 30: Overheads

Another technique to apply overheads is the use of the overhead costingsheet. You can use the overhead costing sheet to allocate overhead costs toactivities and WBS elements.

You can use this function to calculate overheads in planned, commitment,and actual values.

The costing sheet determines the overheads that are calculated and the objects(cost center, internal order or process) to which overheads are credited.


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Figure 31: Costing Sheet

Using this technique, the costing sheet determines the amount of overhead tobe allocated.

The overhead surcharge can either be value- or quantity-driven. A surchargepercentage can be defined if it is value-driven. An absolute value per unit ofmeasure can be defined if it is quantity-driven (for example, 100 surcharge perhour to utilize a machine).

The overhead is calculated against a base, which represents the expenses thatdrive the allocation of the surcharge. The base is defined by cost elements andcan be either the total value of the base or only the fixed or variable portion.

� Cost elements or cost element areas are collected in base lines.

Example: B100 - cost elements 400000 ... 410000 - all costs for consumingstock-purchased materials.

Next, you define the surcharge, which is calculated against the base.

� An overhead is calculated for one or more base lines.

Example: C000 - 20% warehouse surcharge for all stock-purchased materialsused.


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Lastly, each overhead allocation leads to a credit posting to a cost center,internal order or process and is posted using an overhead cost element definedin the credit key.

� Example: E01 - post the credit to cost center 4130, using cost element655110.

The overhead rate that is applied can depend on various factors, such asthe time period, controlling area, company code, plant, network type, planversus actual, and overhead group. The overhead group is determined inCustomizing from the overhead key assigned to the cost object. This enablesthe use of a single costing sheet with flexible rates based on organizationalunits or individual activities.

Figure 32: Tables for Process Costs and Overheads

In the case of networks, the costing sheet is derived from the Parameters forNetwork Type table by means of the costing variant. You can change the costingsheet and overhead key in the network header. They provide a default for thecosting sheet assigned to activities.

The costing sheet for WBS elements is derived directly from the project profile.


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Notes:

� If you create activities for the WBS, the newly created activities inherittheir costing sheets and overhead keys from the WBS elements.

� In the case of easy cost planning and unit costing for WBS elements, costplanning draws on a costing sheet for a costing variant that is assignedto the project profile by way of the planning profile. This method isavailable only for cost planning using unit costing or easy cost planningand is not shown in the above graphic.

The template is dynamically determined during cost planning and period-endallocations based on the costing sheet and overhead key assigned to the costobject.


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Lesson Summary

You should now be able to:� Understand the concept of Activity-based Costing� Explain how to construct an overhead costing sheet and how it is

assigned to a cost object


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Lesson: Easy Cost Planning

Lesson OverviewThis lesson explains how Easy Cost Planning can be used to supplement theplanned costs for a project.


� Use Easy Cost Planning

Business ExampleAs a project controller, you are interested in how to use Easy Cost Planning tosupplement your project planning with networks.

Easy Cost Planning

Figure 33: Easy Cost Planning

As of Release 4.6C, the SAP System offers an easy-to-use tool, called Easy CostPlanning, to plan costs in WBS elements.


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PLM230 Lesson: Easy Cost Planning

You can use easy cost planning to create preliminary costing for a project.You can use this preliminary costing as the basis to create quotations. Costsso planned are broken down, for example, using a quantity structure ofnetworks/activities. You use customizing to specify the plan version in whichvalues planned in easy cost planning are stored. You should specify that thevalues are recorded in a CO version other than 000.

� Why? After preliminary costing, concurrent planning using networkstakes place when the project begins. But, the system can record data onlyfrom the network costing in CO version 000.

� Define a CO version other than 000 for values from Easy Cost Planning sothat the system does not add the data to the data from network costing.

You access easy cost planning for projects from the project builder. You choosea WBS element from the structure tree and create costing items for the WBSelement. Cost planning using easy cost planning is cost element-based.

You can use planning templates to enter costing items. In the process,characteristics are valued. The above example shows work in hours valued at100. Characteristic values from the planning template are linked to quantities,values, or actions from costing items. In the above example, the link is tothe quantity for an internal activity.

When you accept them, costing items appear in the structure tree beneath therelevant WBS element.


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Lesson Summary

You should now be able to:� Use Easy Cost Planning


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PLM230 Lesson: Network Costing Paths and Versions

Lesson: Network Costing Paths and Versions

Lesson OverviewIn this lesson the different transactions for network costing and theirdifferences are discussed. The lesson also explains the use of various versiontypes as they relate to cost planning. Finally network costing and thecutomizing settings relevant for network costing are summarized.


� Demonstrate the different network costing paths� Understand the role of versions in project cost planning� Identify the tables for network costing in the Project System customizing

Business ExampleAs responsible project controller, you have to decide how to calculate theplanned costs of networks. You are also interested in the use of versions asthey relate to cost planning.


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Network Costing Paths

Figure 34: Network Costing Paths

Based on the transaction, you can calculate the costs for a network such asnetwork maintenance or a range of networks such as all networks for selectedWBS elements in structure planning or the project planning board.

You can also calculate network costs asynchronously. The advantage of thismethod is that you can select and cost broader ranges (example: A to Z) andperform costing in the background.

Asynchronous costing is required for payment planning analysis.


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Version Types in Project Cost Planning

Figure 35: Version Types in Project Cost Planning

Controlling (CO) plan versions:

Unlike project versions and simulation versions, CO plan versions do not storethe project structure, but only values from manual and automatic planning,and actual values.

You can use hierarchy reports or cost element reports to compare planversions with operative version 000. Changes involving values, but not thestructure, can be detected using this comparison.

Project version:

Project versions are snapshots of the project. The entire project, its structureand values, is stored in a project version. You can use statuses to have thesystem create versions automatically. You can also create them manually (inthe WBS, network, or structure/date information system).

You use version profiles to specify objects stored in the version.

Project versions can be compared with the operative project in thestructure/date information system and the costs/revenues/paymentsinformation system (hierarchy reports), which enables you to detect structuralchanges and any value changes.

Simulation version:


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Unlike project versions, you can change simulation versions using the projectplanning board. Simulation versions can be maintained with or without anexisting operative project. You can later transfer them to an existing or newproject. Like project versions, simulation versions can also be evaluated.

Figure 36: CO Plan Versions

Planned order costs, to include network costs, always update CO plan version000. When you recalculate the planned costs of activities, the previous resultsare overwritten.

For historical analysis, you may want to copy the results of version 000 toanother CO plan version. You can copy planning from version 000 to otherversions and analyze the various versions in the information system.

When you create a controlling area, the system automatically creates a planversion (000) for planned/actual values. Actual values are posted in thisversion.


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Figure 37: Project Version, Simulation: Value Transfer

Value transfer distinguishes between two types of values:

Values derived using the project quantity structure (billing plan) or networkquantity structure (activities, components including invoicing plans) can betransferred to the version and, in the case of simulation, back to the operativeproject.

Values planned manually and actual values are copied from the operativeproject to the version. You can evaluate them in the information system. Theycannot be copied to the operative project.


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Network Costing

Figure 38: Tables for Network Costing

There are two tables for the order type (network type). The first is definedfor each order type and the second (parameters for network) is defined foreach order type and plant.

A third important table is the network profile, which contains default valuesfor the network and its activities.

The costing variants for plan and actual costs are determined at networkheader level.

The costing sheet and overhead key are determined at activity level. Theycontrol process cost accounting or application of overhead. Based on thecreation process, these keys are inherited from the network header or theassigned WBS element.


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Figure 39: Tables for Costing Variant

The costing variant contains the basic control information required to performcosting.

The valuation variant contains all information that controls the valuation of:

� Material components� Internal activities/processes� External activities

This information can also control how overhead is applied.

The valuation strategy for the valuation variant can be determined by plant.

The By period indicator enables you to select the rate to value internallyprocessed activities period-by-period based on the period in which the activityquantity is scheduled.

The costing type contains detailed information to control costing.


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Figure 40: Network Costing - Summary

Internally processed activities:

If a distribution key or work center is not maintained in the activity, costs aredistributed evenly over the earliest dates in the activity. Valuation is at the ratedetermined by the valuation variant. Based on the strategy used, the systemcan determine the most current rate.

Costs activity:

If an invoicing plan is maintained, the values in the periods are set as specifiedin the invoicing plan. If not, the activity value is distributed to periods usingthe distribution key in the activity. If a distribution key is not maintained inthe activity, costs are distributed evenly over the earliest dates in the activity.

Service activities or externally processed activities:

If an invoicing plan is maintained, the values in the periods are set as specifiedin the invoicing plan. If not, the activity value is set in the period of the latestactivity start date.

The invoicing plan has priority for values. If an invoicing plan is notmaintained, the system determines the price from the purchasing info recordor the activity value.

Material components:


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If an invoicing plan is maintained, the periods and, in some cases, values aretaken from the invoicing plan. If an invoicing plan is maintained, the valuesare taken from the purchasing info record or the price from the materialmaster for each valuation variant. In this case, the period is taken from thematerial requirements date.


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Exercise 3: Master Data

Exercise ObjectivesAfter completing this exercise, you will be able to:� Display the master data for a work center� Verify the planned rate for utilizing an activity type from some cost center

Business ExampleAs an employee of your company, you are required to display the master datafor your cost center. You need to verify planned rates to utilize an activitytype from a cost center.

Task:In the following section, you will display master data for the work center2000. You will also verify the planned rate to utilize activity type 1421 fromcost center 4290.

1. Display the work center 2000 assigned to activity 1000 of your project.

Logistics → Project System → Basic data → Master Data → Work Center→ Master Record → Display

(Choose the transaction by double-clicking)

Use the following data on the initial screen:

Field Name ValuesPlant 1300Work center 2000

Select Costing in the initial screen.

Note the following data for costing:



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Field Name ValuesCost center 4290ActType Int.Proc. 1421

Formula key (field has no label) SAP008

2. Find the fixed and variable price that was determined for the cost centerand the activity type in activity 1000. Include the price unit and activitytype unit. Which allocation cost element is the activity displayed under?

Accounting→ Controlling→ Cost Center Accounting→ Planning→ Activityoutput/prices → Display



Field Name ValuesVersion 0From period 1To period 12Fiscal year Current yearCost center 4290Activity type 1421

Choose Overview screen

The fixed and variable prices are displayed. The activity unit is H and theallocation cost element is 619000.


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Solution 3: Master DataTask:In the following section, you will display master data for the work center2000. You will also verify the planned rate to utilize activity type 1421 fromcost center 4290.

1. Display the work center 2000 assigned to activity 1000 of your project.

Logistics → Project System → Basic data → Master Data → Work Center→ Master Record → Display



Field Name ValuesPlant 1300Work center 2000

Select Costing in the initial screen.

Note the following data for costing:

Field Name ValuesCost center 4290ActType Int.Proc. 1421

Formula key (field has no label) SAP008

a)

2. Find the fixed and variable price that was determined for the cost centerand the activity type in activity 1000. Include the price unit and activitytype unit. Which allocation cost element is the activity displayed under?

Accounting→ Controlling→ Cost Center Accounting→ Planning→ Activityoutput/prices → Display





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Field Name ValuesVersion 0From period 1To period 12Fiscal year Current yearCost center 4290Activity type 1421

Choose Overview screen

The fixed and variable prices are displayed. The activity unit is H and theallocation cost element is 619000.

a)


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Exercise 4: Evaluation

Exercise ObjectivesAfter completing this exercise, you will be able to:� Evaluate planned costs using a cost element report

Business ExampleAs a project controller, you want to evaluate the planned costs of variousobjects of your project in detail.

Task:Create a second session (referred to as session 2 from here on).

The session will be used for the exercises in this unit to perform the evaluation.

Choose Create Session.

1. In session 2, branch to the information system.

Execute a cost element report. Use report group Z6P1Actual/Stock/Comm/Plan in COAr Crcy.

Project System:

Information System→ Financials→ Execute Report→ Cost Element Report

Enter report group Z6P1.

Choose Execute.

If necessary, enter controlling area 1000, and database profile130000000000.

2. On the selection screen that appears, enter the following data:

Field Name ValuesProject T-100##Plan version 0To fiscal year Current year + 2 years


3. Execute the report.Continued on next page


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Choose Execute.

4. Select various objects (WBS elements or activities) in the structure todisplay the respective planned costs.

Stay in the cost element report in session 2. Use this report in futureexercises in this course.


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Solution 4: EvaluationTask:Create a second session (referred to as session 2 from here on).

The session will be used for the exercises in this unit to perform the evaluation.




Project System:



Choose Execute.

If necessary, enter controlling area 1000, and database profile130000000000.

a)

2. On the selection screen that appears, enter the following data:

Field Name ValuesProject T-100##Plan version 0To fiscal year Current year + 2 years


a)

3. Execute the report.

Choose Execute.

a)

4. Select various objects (WBS elements or activities) in the structure todisplay the respective planned costs.



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Stay in the cost element report in session 2. Use this report in futureexercises in this course.

a)


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Exercise 5: Customizing

Exercise ObjectivesAfter completing this exercise, you will be able to:� Check tables in the project system customizing for overhead calculations,

template assignment and costing.

Business ExampleAs responsible project controller, you want to check the customzing for theoverhead calculation of your project. You want to trace how the varioustables related to cost planning are assigned to networks in Project Systemcustomizing.

Task:Create a third session.

1. Use Project System customizing to trace how the overhead was calculatedfor WBS elements and activities.

To do this, study the cost sheet used (130000).

Project System customizing → Costs → Automatic and periodic allocations→ Overhead → Define Costing Sheet

Select costing sheet 130000 and click Costing sheet rows to view thecosting sheet structure.

2. Use Project System customizing to trace how the template was assignedto the network activity.

Project System customizing→ Costs→ Automatic and periodic allocations→Template- Allocation of Overhead → Assign Templates

The assignment of template 1300 was based on Controlling area (1000),Costing Sheet (130000), overhead key (1300) and environment (004).

3. Use Project System customizing to trace how costing variants wereassigned to the network type and plant parameters.


Project System customizing→ Structures→ Operative Structures→ Network→ Settings for Networks→ Specify Parameters for Network Type



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Display the parameters for network type PS04 and plant 1300. Theplanned costing variant is PS01, and the actual costing variant is PS02.

4. From the same configuration table, determine the default setting for thePlanned Cost Calculation for network type PS04 and plant 1300.


Display the parameters for network type PS05 and plant 1300. Plannedcosts should be determined each time the network is saved.


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Solution 5: CustomizingTask:Create a third session.

1. Use Project System customizing to trace how the overhead was calculatedfor WBS elements and activities.


Project System customizing → Costs → Automatic and periodic allocations→ Overhead → Define Costing Sheet

Select costing sheet 130000 and click Costing sheet rows to view thecosting sheet structure.

a)

2. Use Project System customizing to trace how the template was assignedto the network activity.

Project System customizing→ Costs→ Automatic and periodic allocations→Template- Allocation of Overhead → Assign Templates

The assignment of template 1300 was based on Controlling area (1000),Costing Sheet (130000), overhead key (1300) and environment (004).

a)

3. Use Project System customizing to trace how costing variants wereassigned to the network type and plant parameters.



Display the parameters for network type PS04 and plant 1300. Theplanned costing variant is PS01, and the actual costing variant is PS02.

a)

4. From the same configuration table, determine the default setting for thePlanned Cost Calculation for network type PS04 and plant 1300.




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Display the parameters for network type PS05 and plant 1300. Plannedcosts should be determined each time the network is saved.

a)


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Lesson Summary

You should now be able to:� Demonstrate the different network costing paths� Understand the role of versions in project cost planning� Identify the tables for network costing in the Project System customizing


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Unit Summary PLM230

Unit SummaryYou should now be able to:� Explain different cost planning methods for projects� Describe how an order can be assigned to a WBS element or activity� Understand the role of appended and apportioned orders� Explain the use of the costing variant for calculating the planned costs

for networks and assigned orders� Explain the concept of cost planning in networks� Understand the cost calculation for internal activitites� Describe the cost calculation for externally processed activities� Explain cost planning using cost activitites� Understand the concept of Activity-based Costing� Explain how to construct an overhead costing sheet and how it is

assigned to a cost object� Use Easy Cost Planning� Demonstrate the different network costing paths� Understand the role of versions in project cost planning� Identify the tables for network costing in the Project System customizing


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Test Your Knowledge

1. When an order is apportioned, planned order costs decrease the assignedvalues for the relevant WBS element.Determine whether this statement is true or false.□ True□ False

2. In which situations are activity-assigned networks and header-assignednetworks used?

3. What factors should be considered while specifying the appended andapportioned indicator?

4. List the reasons why the process of �project cost planning using activities�has advantages over manual planning of primary costs.

5. Which of the following elements does the work center data of an activitycontain?Choose the correct answer(s).□ A scheduler□ B cost center□ C formula for calculating price□ D formula for cost planning


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6. List the cost activity details relevant for the calculation of planned costs.

7. What is the advantage of calculating network costs asynchronously?

8. You can use planning templates to enter costing items.Determine whether this statement is true or false.□ True□ False

9. What are the two types of values distinguished by value transfer insimulation version of cost planning?


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Answers

1. When an order is apportioned, planned order costs decrease the assignedvalues for the relevant WBS element.

Answer: False

When an order is apportioned, planned order costs increase the assignedvalues for the relevant WBS element.

2. In which situations are activity-assigned networks and header-assignednetworks used?

Answer: Activity-assigned networks are usually used when activities areassigned to various WBS elements. Header-assigned networks should beused when networks are assigned to sales orders without WBS.

3. What factors should be considered while specifying the appended andapportioned indicator?

Answer: You can specify the appended and apportioned indicator basedon the order category, order type, and controlling area.

4. List the reasons why the process of �project cost planning using activities�has advantages over manual planning of primary costs.

Answer: The process of project cost planning using activities hassignificant advantages over manual planning of primary costs because:

� Cost planning is integrated with time scheduling and resourceplanning. Utilizing activities enables a single data item to updatescheduling, resource planning, and cost planning.

� If the schedule for an activity or work package is shifted, costplanning dynamically recalculates the period costs.

� When creating new networks by referencing standard or operativeproject data, activity details are also copied. This enables the costplanning of one project to be copied to a new project.


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5. Which of the following elements does the work center data of an activitycontain?

Answer: B, D

The work center data of an activity contains the cost center and formulafor cost planning.

6. List the cost activity details relevant for the calculation of planned costs.

Answer: The following information about the costs activity is relevantfor the calculation of planned costs:

� The control key determines if the activity is relevant for costallocation.

� The amount of the cost activity can be planned as a single costelement, a unit costing that enables detailed planning with multiplecost elements, or an invoicing plan.

� The cost element is defaulted for cost activities based on the networkprofile.

7. What is the advantage of calculating network costs asynchronously?

Answer: The advantage of this method is that you can select andcost broader ranges (example: A to Z) and carry out costing in thebackground.

8. You can use planning templates to enter costing items.

Answer: True

You can use planning templates to enter costing items.


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9. What are the two types of values distinguished by value transfer insimulation version of cost planning?

Answer: Value transfer distinguishes between two types of values, valuesderived using the project quantity structure (billing plan) or networkquantity structure (activities, components including invoicing plans) thatcan be transferred to the version and, in the case of simulation, back to theoperative project. Values planned manually and actual values are copiedfrom the operative project to the version. You can evaluate them in theinformation system, but cannot copy them back to the operative project.


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Unit Summary PLM230


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Unit 3Planned Revenues

Unit OverviewThis unit starts with explaining the account assignment for sales document. Itthen introduces the concept of revenue planning. Finally the unit explains thesales pricing function of the Project System


� Describe the sales document structure� Understand the role of Item Categories, Requirement Classes and

Account Assignment Categories� Identify the methods of revenue planning� Identify different methods of billing processes� Understand the resource-related billing concept� Explain sales pricing� Understand the DIP profile

Unit ContentsLesson: Account Assignment for Sales Document.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98Lesson: Overview of Planned Revenue ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Lesson: Sales Pricing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121

Exercise 6: Planned Revenue ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127


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Unit 3: Planned Revenues PLM230

Lesson: Account Assignment for Sales Document

Lesson OverviewThis lesson explains the sales document structure and describes the accountassignment process for sales order items. It explains how the R/3 systemdetermines Item Categories, Requirement Classes and Account AssignmentCategories.


� Describe the sales document structure� Understand the role of Item Categories, Requirement Classes and

Account Assignment Categories

Business ExampleAs a sales engineer of a company, you need to sell and distribute finishedproducts to the company�s business partners. You need to handle various salesdocuments, such as inquiry, quotation, sales order, and billing documents.The accounting process for these documents is determined using accountassignment.

Structure of Sales DocumentThis topic explains how the account assignment category is determined for asales order item.

The account assignment category is important in project accounting because it:

� Determines if the sales order should be assigned to a project.� Determines if the sales order item is a controlling object.� Defines if inventory quantities for the sales order requirement are treated

as collective or special stock by inventory management.

If the project is the controlling object, revenues billed on the sales order itemare transferred to the project. Results Analysis is then performed on the projectand the revenue and related cost of sales is settled to profitability analysis forongoing profitability measurement. This is the method used in this course.


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PLM230 Lesson: Account Assignment for Sales Document

If the sales order item is defined as a controlling object, the costs of the projectcan be settled to the sales order item. Results Analysis is performed at thesales order item level and the revenue and related cost of sales is settled toprofitability analysis for ongoing profitability measurement.

Figure 41: Sales Document Structure

The sales document type describes the type of business transaction anddetermines functions and document flows within sales order processing.

All sales documents have the same basic structure, with a document headerandmultiple document items. The document header contains data that appliesto all items. Data that only applies to only some items is created at item level.

An item consists of one or more schedule lines, which contain all the datarequired for delivery. For example, a customer places an order for 20 widgets.You enter this as an item in the order, but you can supply only 10 widgetsnow. More widgets will be ready only next month. You need to schedule twodeliveries. The data for these deliveries (dates and confirmed quantities) isstored in two schedule lines.

Item categories are assigned to sales document types. The system defaults anitem category when you create an order and stipulates the item categories thatusers can choose if they do not want to accept the default category.


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Schedule line categories are assigned to item categories. The system defaultsa schedule line category when you enter a document and stipulates theschedule line categories that users can choose if they do not want to acceptthe default category.

Figure 42: Functions in Sales Orders

You sell and ship products or provide services for business partners in Salesand Distribution. Data for products, services, and business partners is thebasis of sales and distribution processing. Sales and Distribution includesinquiry, quotation and sales order processing, and shipping and billing. Eachof these areas has sales documents that contain specific data for respectiveactivities.

When you create a sales order, the system automatically defaults data fromthe appropriate master records. The system takes the sales, delivery, pricing,and billing data from the customer master record and copies customer-specificmaster data about texts, partners, and contacts. For each material in theorder, the system defaults data about pricing, delivery, schedule, weight,and volume specifications.


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Item Categories

Figure 43: Item Categories

Each sales order item is assigned an item category.

The item category assigned in the sales document is determined by the salesdocument type and the material�s item category group.

The item category provides control functions for sales order documentssuch as the billing method (using a billing plan, resource-related, ordelivery-related).

For our project, the item category indicates that we invoice the customerbased on a billing plan.

The system can process a material in each document type using an itemcategory.

If you choose an alternative search strategy for requirements typedetermination, the item category becomes an influencing factor in the selectionprocess.


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Figure 44: Item Category Determination

The item category group is assigned to the material master in the Sales: SalesOrg 2 view of the material master record.

In customizing, the item category is assigned to the combination of itemcategory, group, and sales document type. This determines if an item isrelevant for delivery or billing, among other characteristics.

The system defaults the item category when you create an order. You canaccept the default category or overwrite it. Permitted item categories aredefined in Customizing.

The Item Category Group for T-20000 is 0008. For order type IN, this derivesan Item Category of AFX. For order type PS1, this derives an Item Categoryof TP01.


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Requirement Type and Requirement Class

Figure 45: Requirements Type Determination

The account assignment category is determined from the requirements classassociated with the requirements type assigned to the sales order item.

Requirements type determination defines the source of the requirements type.In the standard system, requirements types are determined according to aspecific search strategy, beginning with the material strategy group.


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The default strategy to determine the requirements type is:

1. First, the system makes an attempt to find a requirements type using thestrategy group in the material master. The strategy group determinesthe main planning strategy, which in turn identifies the customerrequirements , which becomes the requirements type for the sales orderitem.

2. If the strategy group is not maintained, the system determines thestrategy group using the MRP group defined in the material master.

3. If the MRP group has not been defined, the system uses thematerial typeinstead of the MRP group when accessing the corresponding controltables.

4. If a requirements type is not found here, the system assumes a specialrule and attempts to find a requirements type based on the item categoryand the MRP type.

5. If this is not possible, the system makes a final attempt to find arequirements type with only the item category.

6. If even this attempt fails, the system declares the transaction as notrelevant for the availability check or transfer of requirements.

You can override the default strategy in the customizing step Check Controlof Requirements Type Determination. If the field Source contains the value 1 or2, the requirements type is selected from the item category derived from thesales document type and the material�s item category group.

Figure 46: Requirement Class


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The account assignment category is determined from the requirements classassociated with the requirements type assigned to the sales order item.

The requirements class also controls if assembly processing is performed forthe sales order item. Assembly processing enables sales order item creationor change process to automatically create or change the productions orders,planned orders, or networks required.

The assembly type determines the type of orders that the system can createduring assembly processing. This field should always have the valueproduction order, network, or service (static 2) for use with networks. It is theonly selection that supports automatic network creation.

An entry for an order type is also required with assembly processing. Theorder type defines the network creation rules to be used during automaticgeneration.

The valuation setting determines if the special stock is valuated ornonvaluated. When a Work Breakdown Structure (WBS) is present, the use ofproject stock and how it is valuated is defined by the project definition.

Categories of Account Assignment

Figure 47: Account Assignment Categories


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The account assignment category determines the CO object to which documentquantities and values are assigned. You use it to determine the following:

� Using the consumption posting indicator, you determine the controllingobject for the sales item. E determines that the sales order is a costobject and P determines that the project is the controlling object. If P isdetermined, the sales order item will be account assigned to a WBS.

� The special stock indicator determines the type of stock required fordelivery. This is important if sales order items are relevant for deliverythrough SD. The account assignment category from the sales order itemdoes not influence the account assignment category assigned to thecomponent materials listed in the network.

Account Assignment Categories: E (Customer Indiv. Req.), D (Indiv.Cuts/Settle Proj.), Q (Project Maker-to-Order), G (MTS Product/Project), F(Order).

Special Stock Indicator: E (Order on Hand), Q (Project Stock).

Consumption Posting Indicators: E (Accounting via Sales Order), P(Accounting via Project), V (Consumption).

The combinations of these account assignment categoriers, special stock andconsumption posting indicators are displayed in figure �Account AssignmentCategories�.

Figure 48: SD: Account Assignment and Processes


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The accounting process for the sales order item is determined by the accountassignment category assigned to the sales item.

The following possibilities exist for WBS and networks for the above graphic:

� Represents a make-to-order production process (assembly processing)without a WBS. In this case, the sales order item is the controllinginstrument. The account assignment category E specifies that the salesorder item forms a separate CO object. The network is account assignedto the sales order item. Costs and revenues of the sales order item areusually settled to the profitability segment.

� Using assembly processing, you can also generate a network and WBS.When you save your data, the system creates a WBS and assigns the salesorder item to a WBS element in this WBS. The sales view is depictedby the sales order. The controlling instrument is the project. Logisticalprocessing is represented by the network. Account assignment categoriesD or Q (Cons. = P in each case) specify that revenues are assigned to thebilling WBS element of the project.

� As an alternative to assembly processing, you can manually assign asales order item to a WBS element in a project. Controlling takes placein the project. You can assign orders or documents to the project. Valueassignment to the project is controlled through account assignmentcategories G, D, and Q, which differ in the way they manage quantities.

Account assignment category D requires the use of nonvaluated sales orderstock.


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Assembly Processing with Projects

Figure 49: Assembly Processing with WBS

If you create a sales order for a material that has a requirements class assignedto it for assembly processing, the system automatically creates an assemblyorder in the background and begins assembly processing. This circumventsMRP and creates an operational order directly from the sales order. Thefollowing assembly orders can be created: network, production order,planned order, plant maintenance or service order, and process order.

In assembly processing, you can use all the functions of both sales orders andassembly orders. The direct connection between sales orders and assemblyorders indicates that changes made in one document are automaticallyreflected in the other. Assembly process offers the following advantages:

� Overall network scheduling is used to determine confirmed deliverydates in sales order items.

� Network costing can be used as a condition type in the condition schema.� Billing milestones of the network are copied automatically to the dates

of the billing plan.

In the requirements class table, the assembly type controls if an assemblyorder is created for the SD document. The order type determines the categoryof assembly order (PP, PM, SM, and so on) and its important control functions.


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Lesson Summary

You should now be able to:� Describe the sales document structure� Understand the role of Item Categories, Requirement Classes and



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Lesson: Overview of Planned Revenue

Lesson OverviewThis lesson describes the various methods of revenue planning. It alsodescribes the various ways of creating billing plans and the concept ofresource-related billing.


� Identify the methods of revenue planning� Identify different methods of billing processes� Understand the resource-related billing concept

Business ExampleYour company has received the Turbine project in the current year. As theproject owner, you need to estimate the revenue for each period for each fiscalyear of project execution.

Overview of Revenue Planning

Figure 50: Revenue Planning: Overview


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PLM230 Lesson: Overview of Planned Revenue

WBS in which you want to plan revenues should be flagged as billingelements.

Revenues can be planned in projects using the following methods:

� Manual planning in billing elements in the project structure: Can followthe same procedure as in hierarchical cost planning or can be enteredby revenue element.

� Sales orders (all SD documents assigned): Sales order items are assignedto WBS elements. You can specify in Customizing a combination of salesdocument category (quotation, order, and so on), sales document type,controlling area, system status, and if the billing data (for example, in abilling plan) from a sales order should update the revenue plan for anassigned WBS element. The dates and planned revenues originate eitherfrom the billing plan for sales order items or (if there is no billing plan)from the net value and apportionment data for the item. The revenueelement originates from G/L account determination in SD.

� Billing plan in project billing elements: The revenue element is definedin Customizing.

The system updates only planned revenues from quotations and sales ordersfor the project if there is no billing plan for the WBS element. If you maintain abilling plan for the WBS element, the system updates only the detailed valuesfrom the billing plan to the project. Values already recorded from the SDdocument are deleted.

This is a change from earlier releases, where values from the SD documentand the billing plan were added.


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Figure 51: Turbine T-100##: Sales Order Account Assignment

Sales document items must be assigned to the project. They can be used forrevenue planning and to post actual revenues to the project using milestonebilling.

The assigned WBS elements should be flagged as billing elements.

In the example, two companies are responsible for executing the project:IDES AG and IDES UK. IDES AG is responsible for selling the turbine to theexternal customer. The customer is billed using a milestone billing plan.

In support of this project, IDES UK supplies IDES AG with engineeringservices. Engineering services are identified for WBS T-100##.1.2.

� IDES UK creates a sales order for IDES AG and assigns the documentitem to the billing element T-100##.1.2.

� IDES UK bills its services to IDES AG on a resource-related basis. Abilling request is created in the system through resource-related billing.This results in revenues for IDES UK.


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Manual Revenue Planning

Figure 52: Manual Revenue Planning

Revenue planning estimates the revenues to be received as a project isexecuted.

The following forms of manual planning are available in the Project System:

� Hierarchical revenue planning� Revenue planning by revenue element (detailed planning)

Hierarchical planning enables revenue to be planned by the WBS billingelement and year.

Revenue element planning (detailed planning) enables revenue planning byrevenue element for each WBS billing element. Revenue values are assignedto a period within a fiscal year. Values can be entered for each period foreach fiscal year or on an annual basis and distributed to the appropriate fiscalyear periods.


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Billing Plans

Figure 53: Creating Billing Plans

The use of a billing plan is defined by the customizing of the sales order item�sitem category. Billing plans can be maintained for sales order items or WBSbilling elements. WBS billing plans are only for planning and cannot generatean actual invoice. They can be used for planning before sales documents arecreated or for use with simulation versions.

A WBS billing plan supercedes a sales document billing plan for revenueplanning. If a WBS billing plan exists, it is used for revenue planning,regardless of the planning on the sales document.

There are various ways of creating billing plans:

� Manually� By copying a reference billing plan in SD and PS. It is possible for

reference billing plans to be called upon automatically.� By copying billing milestones from WBS or networks.� By copying billing milestones automatically from the network in

assembly processing.

Milestone billing plans are connected to milestones either in the WBS or thenetwork. When the milestone is completed, the lock on the billing date isautomatically removed. The billing date can then be billed.


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Figure 54: Billing Plan: Structure

In the SD document, you can define a detailed billing plan with several billingdates. A billing plan is a schedule that contains individual billing data fora particular sales document.

Milestone billing is widely used in projects (for example, constructionprojects). If you use milestone billing, the total value to be billed isapportioned to individual dates in the billing plan according to defined rules.The billing dates are assigned to individual milestones.

Billing plan dates can be blocked for billing. You can set billing blocksmanually or remove them by completing the billing milestones.

As of Release 4.0, billing plans can also be entered for billing elements inprojects. You can copy such billing plans, if required, to the sales order (makesure you delete the existing billing plan in the billing element. If not, theplanned revenue is determined by the PS billing plan and not the SD billingplan).

A billing plan can contain down payment dates. These dates affect paymentplanning, but not revenue.


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Resource-Related Billing

Figure 55: Resource-Related Billing

The prices for individual customer activities are often neither entered as fixedprices in a contract nor determined using standard pricing methods. Activitiescannot be properly costed before the contract is concluded, because empiricalvalues do not exist for specific activities. For example:

� Engineer-to-order production� Specific services such as consulting or machine and equipment repair

These types of orders are billed according to the expenses incurred. Inresource-related billing, the customer receives a billing document that verifiesindividual materials, internal activities, and costs.

Internal activities and costs are represented in the billing request or invoiceby material items.

Like sales pricing, resource-related billing is controlled by the Dynamic ItemProcessor (DIP).


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There are several differences between resource-related billing and planneddata, such as:

� In this case, the SD follow-up document is a billing request or creditmemo and not a quotation.

� In resource-related billing, sources for dynamic line items include actualdata such as actual costs, payment data, or posted statistical key figures.Planned data is used for sales pricing. Line items are normally used.

Figure 56: Resource-Related Structure

During billing, the system generates dynamic items from expense information(for example, costs for material and personnel). Before a billing request iscreated, a modifiable overview screen appears, which is used to determine theappearance of the billing request. You can use this screen to simulate prices orsave the screen itself. You can determine the data that the system copies to thebilling request after you finish working with the overview screen.

There are two aggregation levels, such as:

First level: The system aggregates data records for the overview screen todynamic items.

Second level: The system generates a billing request using the data fromdynamic items. If required, the data is reaggregated based on assignedmaterials. Aggregation depends on the settings in the dynamic item processorprofile.


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If you do not want to bill a customer for a dynamic item, you can enter anapportionment reason (for example, warranty) in the overview screen fordynamic items. The apportionment reason is used only for internal purposessuch as calculating profits.

Follow the same procedure when creating a quotation from a service order.

Figure 57: Dynamic Item Processor

The dynamic item processor is a tool that the system uses to summarize dataon dynamic items during resource-related quotation creation and billing (forexample, line items that arise through the posting of goods movements,completion confirmations, or surcharges). Further entries are made accordingto use. The Dynamic Item Processor profile (DIP profile) controls how thesystem summarizes data on dynamic items.

You can use the DIP profile to create quotations and billing (bothresource-related and flat-rate).

Assignment to the DIP profile is performed in the service order header or thesales order item. You can enter the default profile when making customizingsettings for service order types or sales document item types.

The customizing settings for quotation creation and billing are located inthe IMG under Project System→ Revenues and Earnings→ Integration with SDDocuments. The following customer exits are available: AD010001 (changeobject list and its hierarchy), AD010002 (delimit selection and/or filter datathat is determined), AD010003 (create user-defined DI characteristics),AD010005 (create user-defined sources), AD010006 (menu exit: change DI


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value), AD010007 (change dynamic processing information, such as materialdetermination), and V46H0001 (Enter additional item data and insert apartner for the item).


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Lesson Summary

You should now be able to:� Identify the methods of revenue planning� Identify different methods of billing processes� Understand the resource-related billing concept


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PLM230 Lesson: Sales Pricing

Lesson: Sales Pricing

Lesson OverviewThis lesson describes sales pricing concepts and views. It also describes thecustomizing of the DIP profile.


� Explain sales pricing� Understand the DIP profile

Business ExampleYou want to use the planned costs of a project as the basis to establish a salesprice.

As project manager, you need to know how to link a sales order item with acustomer project.

Concepts of Sales Pricing

Figure 58: Sales Pricing


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Sales pricing is a project system function that enables users to determine theprice for work performed based on the project�s planning data. You can storevarious cost estimates and process them at a later stage.

You can store sales pricing data as an SD quotation and create multiplequotations if required. In the standard system, the document type AP is usedspecifically to automatically generate quotations from sales pricing.

As an alternative, you can transfer sales pricing data to a billing plan in theproject so that it can be used for revenue planning.

You can carry out the sales pricing in one of the following ways:

� When you create a project as a result of a customer inquiry and youwant to calculate a sales price for the project, you need to access thesales pricing by choosing Logistics or Accounting → Project System →Financials→ Plan Data→ Sales Pricing. The system determines the salesprice based on either planned costs (totals records) or the data from EasyCost Planning.

If you want to perform sales pricing for projects for which there is nocustomer inquiry, you need to access sales pricing in the Project Builder.The system determines the sales price exclusively on the basis of dataobtained from Easy Cost Planning.

Note on turbine project T-100##:

Sales pricing takes into account all planned costs below the billing elementassigned through the customer inquiry, but only as far as lower-level billingelements.

Costs below the WBS element T-100##.1.2 are not taken into consideration.

To plan these costs, general costs activity 1100 is used and assigned directlyto the WBS element T-100##.1.1 (IDES AG Engineering). An invoice fromcompany code 2000 (UK) is assigned to this cost activity when the projectis executed.


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Figure 59: Sales Pricing Views

To link the customer inquiry in SD to the Project System, you need to assignone or more inquiry items to a WBS element (billing element or accountassignment element). The inquiry supplies the SD data required for the salespricing.

The system uses the Dynamic Item Processor (DIP) to summarize the costsplanned in the WBS element in dynamic items. The system takes into accountthe conditions and prices stored in SD when valuing dynamic items.


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The sales pricing function contains the following views:

� Sales price basis view (center of graphic):

The sales price basis view shows planned costs from the service orderor project as summarized using the DI processor. Summarized plannedcosts, called dynamic items, make up the items in the sales price basis,where you determine if the system should copy all, some, or none ofthe planned costs summarized as dynamic items to quotation creationor sales pricing. This is an internal view to dynamically process salespricing data. In this view, planned costs of the project are structuredhierarchically on the basis of characteristics. You can make changesinteractively at any hierarchy level, which later affect the quotation.

For example: you can exclude individual items in the quotation ormanually change the values of individual items.

� Sales price view (graphic on right):

The sales price view shows the sales price basis items combined by theSD item and sorted. The system calculates the prices for items usingSD pricing. In the sales price view, you can edit line items or headeritems in the sales pricing using SD conditions. Changes in header itemsare automatically passed to line items. This is the external view of thequotation. You can also make changes in this view. For example, you canchange conditions for individual items within the quotation.


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Customizing DIP Profile

Figure 60: Customizing: DIP Profile

You can use the DIP profile to create quotations and for billing. You decidethe type of sales documents you want generated (quotation, billing request,and credit memo request) for each usage. You can also specify if the systemshould perform a warranty check during billing. All other data should beentered when you create a document.

Characteristics relevant to the determination of dynamic items are fixed foreach usage. Various characteristic attributes and the way in which they arepresented during the processing of the billing request are defined. You candefine your own characteristics and enter values for these characteristics usingthe customer exit AD010003.

Sources define the data used to determine dynamic items (for example, theactual costs of line items or totals records, planned costs, and so on). Youcan also select the characteristic values from which dynamic items should bedetermined (exclusion of other characteristic values from billing). Selection isperformed using the sets to be determined for this purpose. You can defineyour own sources using the customer exit AD010005.

You can define the service materials that are determined from characteristicvalues for billing request items or quotations. The selection criteria is enteredin the form of sets.


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Exercise 6: Planned Revenue

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a customer inquiry� Perform sales pricing� Use the PS Billing plan� Create a customer quotation from sales pricing

Business ExampleYou will create a customer inquiry and perform sales pricing for the turbineproject. The sales pricing will be used to create a billing plan and a quotation.You will use the project cost planning data already created for this. Theseplanned costs (for internal processing, external processing, costs, and materialcomponents activities) are reassigned on the basis of cost element/CO activitytype and written as items to an SD quotation. You can write the quotationvalue to a PS WBS billing plan for purposes of revenue planning.

Task 1:In session 1, create a customer inquiry in Sales and Distribution.

Logistics→ Sales and Distribution→ Sales→ Inquiry→ Create

1. Enter the following data:

Field Name ValuesInquiry type IN (inquiry)Sales organization 1000Distribution channel 10Division 00

Choose Enter.

2. In the overview screen for the inquiry, enter the following data:



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Field Name ValuesSold-to party 1600Valid from TodayValid to Today 1 monthReq. deliv. date Today 1 yearMaterial T-20000Order quantity 1Description Turbine system

3. Save the inquiry.

Confirm the message that appears.

Choose Save.


Make a note of the inquiry number:

Number of the inquiry: __________________


Click Back twice.

Task 2:First, you need to link the customer inquiry to project T-100##. You do thisby assigning the inquiry item to the level 1 WBS element of your project(billing element).

1. To do this, change your customer inquiry.

Logistics→ Sales and Distribution→ Sales→ Inquiry→ Change

2. In the initial screen, enter the following data:

Field Name ValuesInquiry Inquiry number you noted earlier

Navigate to the item overview screen.

Choose Enter.



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3. Navigate to the detailed screen of item 10 by double-clicking the item.

In the detailed screen, select the Account assignment tab.

Double-click the item number.

Select the Account assignment tab.

4. In the Account assignment screen, enter the billing element of project(T-100##):

Field Name ValuesWBS element T-100##

5. Select the Sales B tab.

In the detailed screen, enter a profile to automatically create a quotation:

Select the Sales B tab.

Field Name ValuesDIP profile 13000001



Click Save.

Click Back.

Task 3:Use Sales Pricing to create a quotation and WBS billing plan for the turbineproject:

The planned costs defined for the turbine project are used as the basis tocreate this quotation.

1. Generate sales pricing data for the customer project.


Financials → Planning → Sales pricing

In the initial screen, enter the following data:



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Field Name ValuesProject definition T-100##

Do not modify other fields.

Navigate to the Sales price basis screen.

Choose Sales price basis.

2. Expand all the nodes on this screen.

Choose Expand all nodes.

Drag the line that divides the structure at the top until the structureoccupies half the screen.

Note that the top section displays the sales inquiry number and presentsthe project cost broken down in categories according to the DynamicItem Processor (DIP) profile.

Double-click the top line of the structure in the top half of the screen.

Hint: By double-clicking the structure, you can copy individualcosts to the bottom section, where you can also lock objects, andchange, revaluate, or devaluate amounts.

You can dynamically process planned costs for a quotation. Thisis a good idea if you need to determine the sales price from theproject cost plan. The current example shows a sales price (PR00)of 1.6 million already maintained for the turbine.

3. Navigate to the Sales price view.

Choose Sales price.

Hint: You can see the structure of the quotation (comprisingheader, item, and subitem). In the lower part of the screen, thereis a condition schema that enables you to change conditions.

By double-clicking the individual levels of the structure, youcan transfer them to the condition schema and make changesto the levels.

4. Double-click the top line in the structure.



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Double-click the top line in the structure (Project: Quotation).

In the lower section of the screen, enter an additional header condition.

Specify that a global transfer price surcharge of 10% should be used forthe first quotation.


CnTy RateHA00 10 (%)

Choose Enter.

Hint: In the structure, you can see how the surcharge has meantthat all values in the quotation have been increased by 10%.

You can save this quotation by choosing Save.

If you chooseWrite billing plan, you can write the values directlyto the PS billing plan for purposes of revenue planning.

If you choose Create quotation, you can save the values as an SDquotation for the project. You can create as many quotations asrequired for the project.

5. Write the quotation costing data directly to the PS billing plan so that youcan plan revenues for the project.

Choose Write billing plan.

Choose Copy parameters Enter.

Enter a billing date in the billing plan.


Field ValueBilling date Today 1 year% 100Bill Rule 1

Confirm your entries.



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Return to the Sales pricing view.

Choose Enter.

Choose Back.

6. Save your pricing data (and the PS billing plan).

Choose Save.

Enter a sales pricing short text:

GR##: sales price no. 01.

Enter a short text.

Choose Enter.

Close the Sales pricing screen.

Choose Back.

7. Invoke the sales pricing data in the change mode.

Go to the Sales price view.

Choose Sales price.

Create an SD quotation.

Choose Create quotation.


Enter the following data in the overview screen:

Field ValueValid from TodayValid to Today 1 month

8. Save your data and return to the main SAP menu.

Make a note of the quotation number:

Number of the quotation: __________________

Choose Save.

Choose Back.



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Task 4:Display the WBS billing plan that was created from the sales pricing for WBST-200##.

1. Call up the Project Builder.





Double-click line T-100##.

3. Expand the entire structure.

Choose Expand all.

4. Display the WBS billing plan for WBS element T-100##.

Place the cursor on the WBS element in the structure tree.

Place the cursor on WBS element T-100##.

Go to the billing plan for the WBS element.

Right-click: → Billing plan

You created this billing plan during sales pricing.

Click Back.


Click Exit.


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Solution 6: Planned RevenueTask 1:In session 1, create a customer inquiry in Sales and Distribution.

Logistics → Sales and Distribution→ Sales→ Inquiry→ Create


Field Name ValuesInquiry type IN (inquiry)Sales organization 1000Distribution channel 10Division 00

Choose Enter.

a)

2. In the overview screen for the inquiry, enter the following data:

Field Name ValuesSold-to party 1600Valid from TodayValid to Today 1 monthReq. deliv. date Today 1 yearMaterial T-20000Order quantity 1Description Turbine system

a)



Choose Save.




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Make a note of the inquiry number:

Number of the inquiry: __________________


Click Back twice.

a)

Task 2:First, you need to link the customer inquiry to project T-100##. You do thisby assigning the inquiry item to the level 1 WBS element of your project(billing element).

1. To do this, change your customer inquiry.

Logistics→ Sales and Distribution→ Sales→ Inquiry→ Change

a)


Field Name ValuesInquiry Inquiry number you noted earlier

Navigate to the item overview screen.

Choose Enter.

a)

3. Navigate to the detailed screen of item 10 by double-clicking the item.

In the detailed screen, select the Account assignment tab.



a)

4. In the Account assignment screen, enter the billing element of project(T-100##):



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a)


In the detailed screen, enter a profile to automatically create a quotation:



a)



Click Save.

Click Back.

a)

Task 3:Use Sales Pricing to create a quotation and WBS billing plan for the turbineproject:

The planned costs defined for the turbine project are used as the basis tocreate this quotation.

1. Generate sales pricing data for the customer project.


Financials → Planning → Sales pricing


Field Name ValuesProject definition T-100##




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Navigate to the Sales price basis screen.

Choose Sales price basis.

a)

2. Expand all the nodes on this screen.

Choose Expand all nodes.

Drag the line that divides the structure at the top until the structureoccupies half the screen.

Note that the top section displays the sales inquiry number and presentsthe project cost broken down in categories according to the DynamicItem Processor (DIP) profile.

Double-click the top line of the structure in the top half of the screen.

Hint: By double-clicking the structure, you can copy individualcosts to the bottom section, where you can also lock objects, andchange, revaluate, or devaluate amounts.

You can dynamically process planned costs for a quotation. Thisis a good idea if you need to determine the sales price from theproject cost plan. The current example shows a sales price (PR00)of 1.6 million already maintained for the turbine.

a)

3. Navigate to the Sales price view.

Choose Sales price.

Hint: You can see the structure of the quotation (comprisingheader, item, and subitem). In the lower part of the screen, thereis a condition schema that enables you to change conditions.

By double-clicking the individual levels of the structure, youcan transfer them to the condition schema and make changesto the levels.

a)


Double-click the top line in the structure (Project: Quotation).Continued on next page


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In the lower section of the screen, enter an additional header condition.

Specify that a global transfer price surcharge of 10% should be used forthe first quotation.


CnTy RateHA00 10 (%)

Choose Enter.

Hint: In the structure, you can see how the surcharge has meantthat all values in the quotation have been increased by 10%.

You can save this quotation by choosing Save.

If you chooseWrite billing plan, you can write the values directlyto the PS billing plan for purposes of revenue planning.

If you choose Create quotation, you can save the values as an SDquotation for the project. You can create as many quotations asrequired for the project.

a)

5. Write the quotation costing data directly to the PS billing plan so that youcan plan revenues for the project.

Choose Write billing plan.

Choose Copy parameters Enter.

Enter a billing date in the billing plan.


Field ValueBilling date Today 1 year% 100Bill Rule 1




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Return to the Sales pricing view.

Choose Enter.

Choose Back.

a)

6. Save your pricing data (and the PS billing plan).

Choose Save.

Enter a sales pricing short text:

GR##: sales price no. 01.

Enter a short text.

Choose Enter.

Close the Sales pricing screen.

Choose Back.

a)

7. Invoke the sales pricing data in the change mode.

Go to the Sales price view.

Choose Sales price.

Create an SD quotation.

Choose Create quotation.


Enter the following data in the overview screen:

Field ValueValid from TodayValid to Today 1 month

a)

8. Save your data and return to the main SAP menu.

Make a note of the quotation number:

Number of the quotation: __________________



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Choose Save.

Choose Back.

a)

Task 4:Display the WBS billing plan that was created from the sales pricing for WBST-200##.

1. Call up the Project Builder.



a)



Double-click line T-100##.

a)

3. Expand the entire structure.

Choose Expand all.

a)

4. Display the WBS billing plan for WBS element T-100##.

Place the cursor on the WBS element in the structure tree.

Place the cursor on WBS element T-100##.


Right-click: → Billing plan

You created this billing plan during sales pricing.

Click Back.


Click Exit.

a)


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Lesson Summary

You should now be able to:� Explain sales pricing� Understand the DIP profile


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Unit Summary PLM230

Unit SummaryYou should now be able to:� Describe the sales document structure� Understand the role of Item Categories, Requirement Classes and

Account Assignment Categories� Identify the methods of revenue planning� Identify different methods of billing processes� Understand the resource-related billing concept� Explain sales pricing� Understand the DIP profile


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Test Your Knowledge

1. If a project is the controlling object, revenues billed on the sales orderitems are transferred to the project.Determine whether this statement is true or false.□ True□ False

2. What functions can be performed using the sales order?

3. In the requirements class table, the assembly type field determines if anassembly order is created for the document.Fill in the blanks to complete the sentence.

4. If you maintain a billing plan for the WBS element, the values from theSD document and the billing plan are added.Determine whether this statement is true or false.□ True□ False

5. What are the various types for manual planning without billing plans?

6. What are the various ways of creating billing plans?


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7. What is the dynamic item processor?

8. How do you perform sales pricing for projects for which there is nocustomer inquiry?


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Answers

1. If a project is the controlling object, revenues billed on the sales orderitems are transferred to the project.

Answer: True

If a project is the controlling object, the revenues are billed to the projectand the Result Analysis is performed on the project.

2. What functions can be performed using the sales order?

Answer: The following functions can be performed using a sales order:requirements transfer, availability check, pricing, account assignment,billing, and scheduling.

3. In the requirements class table, the assembly type field determines if anassembly order is created for the SD document.

Answer: SD

4. If you maintain a billing plan for the WBS element, the values from theSD document and the billing plan are added.

Answer: False

A WBS billing plan supercedes a sales document billing plan for revenueplanning.

5. What are the various types for manual planning without billing plans?

Answer: The various types of manual planning are hierarchical revenueplanning and revenue planning by revenue element.

6. What are the various ways of creating billing plans?

Answer: The various ways of creating billing plans are: copying areference billing plan in SD and PS, copying billing milestone from WBSor networks, and copying billing milestones automatically from networkin assembly processing.


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7. What is the dynamic item processor?

Answer: The dynamic item processor is a tool used by the system tosummarize data about dynamic items during resource-related quotationscreation and billing.

8. How do you perform sales pricing for projects for which there is nocustomer inquiry?

Answer: To perform sales pricing for projects for which there is nocustomer inquiry, you need to access sales pricing in the Project Builder.The system determines the sales price exclusively on the basis of dataobtained from Easy Cost Planning.


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Unit 4Materials

Unit OverviewThis unit begins by explaining component planning. The unit explainsconcepts of component planning such as direct procurement and procurementusing requirements planning. The unit then explains managing stocks ofmaterial components. Finally, the unit covers the stock procurement processin detail.


� Explain the differences between N and L component item categories� Describe the direct procurement of components� Understand the procurment using Requirements Planning� Define stocks� Define collective stock� Identify valuated and non-valuated project stock� Identify prerequisites for managing stocks� Identify account assignment categories� Assign material components� Explain the purchasing process� Explain the production order process� Identify goods issue for network activity

Unit ContentsLesson: Component Planning.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149

Exercise 7: Project Release and Preparation ... . . . . . . . . . . . . . . . . . . . . . . . . . . .157Exercise 8: Procuring Non-Stock Components .. . . . . . . . . . . . . . . . . . . . . . . . . . .163

Lesson: Managing Stocks of Material Components.. . . . . . . . . . . . . . . . . . . . . . . . . . .174Exercise 9: Assigning Stock Components .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .189


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Unit 4: Materials PLM230

Exercise 10: MRP for Components .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .193Exercise 11: Production of Assemblies.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .195

Lesson: Stock Procurement Process ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .206Exercise 12: The Purchasing Process .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .223


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PLM230 Lesson: Component Planning

Lesson: Component Planning

Lesson OverviewThis lesson explains the planning of material components in projects. Itdescribes the differences between N and L component item categories. Thislesson focuses on the direct procurement but it also explains the procurementof components using requirements planning.


� Explain the differences between N and L component item categories� Describe the direct procurement of components� Understand the procurment using Requirements Planning

Business ExampleIn the turbine project, you can plan material costs by allocating materialcomponents to activities. You will purchase non-stock components for youractivities. Using MRP, you plan requirements for the components and createpurchase requisitions or planned orders. Depending on the procurementtype, the components are procured by the vendor or manufactured in theproduction plants. Quantities and values of materials managed as projectstock can be evaluated in the project at any point in the procurement process.


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Materials in Project

Figure 61: Materials in Projects

Materials establish a connection between Sales and Distribution, MaterialsManagement (Purchasing and Inventory Management), and ProductionPlanning and Control.

The materials required to complete the activities of a project are identified inthe component overview for the individual activity.

Various possibilities exist to manage the component value and inventoryquantity.


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Figure 62: Integration with MM and PP

By assigning materials to activities, you can plan material requirements for aproject. The system differentiates between stock and non-stock items.

The SAP-standard item category N(non-stock item) always leads to directprocurement and a purchase requisition, which is generated by the network.These requisitions are passed directly to Purchasing. The purchase requisitionidentifies the activity that requests the item. Non-stock items can be identifiedeither by entering a material master number or by entering a description. Thesystem does not generate reservations that are relevant to MRP (MaterialRequirements Planning). You cannot post movements to stock for componentswith item category N.

The SAP-standard item category L (stock item) is entered for materials that arekept in stock (warehouse, or project/sales order stock). Based on the settingsin the material master, the bill of material, and the settings and assignmentsin the project system, the system generates a reservation, a reservation anda purchase requisition, or only a purchase requisition. Stock items must beidentified by a material master.

The material master record of the stock item includes procurement parametersthat identify if the material can be purchased, produced, or both. During theMRP run, the system nets the requirements for the material against availablestock. If necessary, MRP proposes a purchase or production process to satisfythe demand.


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Direct Procurement

Figure 63: Direct Procurement

Direct procurement is initiated in the following cases:

� For components with item category N� For components with item category L that have either globally in the

material master or individually in the BOM item Direct procurement set inthe Special procurement field.

The item category non-stock item (N) is used for components that are notprocured by way of warehouse stock or project/sales order stock, but procureddirectly by a network activity. Purchase requisitions are created for thesecomponents. These requisitions are passed directly to Purchasing.

When goods are received, they are not placed in inventory, but consumedimmediately on receipt by the requesting activity. The costs of purchasedcomponents are debited to the network activity at the time of the goods receipt.

Non-stock items cannot be managed in inventory. This includes both projectstock and sales order stock.


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Figure 64: Purchasing Non-stock Components

Plan costs for material not managed as inventory are determined using thepurchasing info record or the activity item. You can create an invoicing planfor a non-stock item.

Actual costs for non-stock components are debited to the activity (or networkheader, in the case of header assigned networks) at the time of the goodsreceipt. If a price variance occurs during invoice processing, the variance isposted to the activity.

Non-stock components can be entered by either referencing a material masteror by entering a descriptive text, unit of measure, and additional parametersfor purchasing processing.


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Procurement Using Requirements Planning

Figure 65: Procurement Using Requirements Planning

The item category stock item (L) is used for materials kept in stock. When yousave your data, the system creates a reservation for the required material.The Advanced Procurement procedure creates a purchase requisition forcomponents procured externally without the execution of MRP.

The main function of material requirements planning is to ensure materialavailability (in other words, to procure the required quantities in time - bothin-house and for sales and distribution). This includes monitoring stocks and,above all, creating procurement proposals for purchasing and production.

Independent requirements - that is, requirements for finished products,assemblies or raw materials - trigger requirements planning. In order to coverthe requirements, order quantities and dates have to be determined, and thecorresponding procurement elements scheduled. The procurement elementfor requirements planning is a planned order and, for external procurement, apurchase requisition. Furthermore, the dependent requirements for materialsproduced in-house (in other words, the quantity of components required tomanufacture a finished product or assembly) are determined by explodingthe bill of material. Planned orders are created at each BOM level to coverrequirements when a material shortage occurs.


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Once quantities and dates have been planned in requirements planning,these planned procurement elements are converted to "exact" procurementelements: for production, which is the production order, and for externalprocurement, which is the purchase order. When the order or purchase orderis being processed, the production order is delivered or a goods receipt isposted to stock (plant stock or project/sales order stock).

The goods issue that takes place as a result of this activity reduces the stockand posts actual costs to the "consuming" network activity.


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Exercise 7: Project Release and Preparation

Exercise ObjectivesAfter completing this exercise, you will be able to:� Open a cost element report� Release a project

Business ExampleAs a project controller, you want to follow the value flow for differentprocurement processes later on. Therefore you use an appropriate costelement report. You change the status of your project to released in order tocreate purchase requisitions.

Task 1:If you have not already done so, create a second session (referred to as session2). This session will be used for the remaining exercises in Unit 4 to performthe cost element evaluation.




Project System:



Choose Execute.

If required, enter controlling area 1000, and database profile130000000000.

2. In the selection screen that appears, enter the following data:



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Field Name ValueProject T-100##Plan version 0To fiscal year Current year + 2 years



Choose Execute.

Hint: At this time, the cost report should display only plannedvalues for the project.

At this time, if there are values in the Internal Commitmentcolumn, it is a result of the generation rule set for the creation ofpurchase requisitions on activities. Generation rule Immediatelycreates purchase requisitions when you save the project.

Use the cost element report in session 2 for the following exercises. Usesession 1 to post the data.

Task 2:Using session 1, release the turbine project T-100## from the Project Buildertransaction.

Go to Session 1.

Project System menu


Double-click the project T-100## in the worklist.

1. Change the status of the project definition (and all the objects of theturbine project) to Released.

Place the cursor on the project definition T-100##.

Edit → Status → Release

2. Save the changes.




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Choose Save.

Choose Exit.

Confirm the messages that appear.

3. Switch to session 2 and refresh the data. Review the report.

Switch to session 2 again.

Report → Refresh

Hint: The ability to refresh report results from the report is basedon the reporting options you selected. Click the Options/OfficeIntegration icon or use the menu path Settings→ Options. Selectthe Expert mode. This enables you to refresh report data fromthe report.

Hint: The report should display values in the InternalCommitment and Plan columns. The internal commitments wereupdated as a result of the generation rule set for the creation ofpurchase requisitions on activities. Generation rule From releasecreates purchase requisitions when the project status is changedto released.


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Solution 7: Project Release and PreparationTask 1:If you have not already done so, create a second session (referred to as session2). This session will be used for the remaining exercises in Unit 4 to performthe cost element evaluation.




Project System:



Choose Execute.


a)




a)




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Choose Execute.

Hint: At this time, the cost report should display only plannedvalues for the project.

At this time, if there are values in the Internal Commitmentcolumn, it is a result of the generation rule set for the creation ofpurchase requisitions on activities. Generation rule Immediatelycreates purchase requisitions when you save the project.

Use the cost element report in session 2 for the following exercises. Usesession 1 to post the data.

a)

Task 2:Using session 1, release the turbine project T-100## from the Project Buildertransaction.

Go to Session 1.

Project System menu



1. Change the status of the project definition (and all the objects of theturbine project) to Released.

Place the cursor on the project definition T-100##.

Edit → Status → Release

a)

2. Save the changes.


Choose Save.

Choose Exit.


a)

3. Switch to session 2 and refresh the data. Review the report.



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Switch to session 2 again.

Report → Refresh

Hint: The ability to refresh report results from the report is basedon the reporting options you selected. Click the Options/OfficeIntegration icon or use the menu path Settings→ Options. Selectthe Expert mode. This enables you to refresh report data fromthe report.

Hint: The report should display values in the InternalCommitment and Plan columns. The internal commitments wereupdated as a result of the generation rule set for the creation ofpurchase requisitions on activities. Generation rule From releasecreates purchase requisitions when the project status is changedto released.

a)


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Exercise 8: Procuring Non-StockComponents

Exercise ObjectivesAfter completing this exercise, you will be able to:� Assign a non-stock component to an activity in the Project Builder� Perform the procurement of the component� Evaluate the costs for the purchased material

Business ExampleAs an employee of a company, you are allocated the task of procuring anon-stock component for your project. You need to evaluate the actual data inthe cost element report.

Task 1:Call up the Project Builder and assign a non-stock component to activity 3200Material procurement plant components for your project T-100##.

Go to Session 1.




1. Assign component E-1517 to activity 3200 Material procurement plantcomponents as a non-stock item.

Expand the project definition and the WBS element Planning of system andinstrumentation. Select activity 3200 to display activity details.

Assign the material in the component overview.

Select Component overview.

Use the following data for the assignment:



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Field Name ValuesMaterial E-1517Requirements quantity 1Item category N

Confirm your entries by choosing Enter.

A dialog box appears. Select the procurement type and create a purchaserequisition for the network.

Set the Purchase requisition for network indicator.

Confirm your entries by selecting Continue.

Remain in the Component Overview screen.

2. Display the detail screen of the component.

Select the component line in the overview and choose General at thebottom of the screen to invoke the detail screen.

Check the account assignment category for the component.

Select Procurement parameters. Which account assignment category hasbeen entered for the quantity/value flow? __________

Hint: Note that the generation rule for the purchase requisitionis Immediately. This means that the purchase requisition isautomatically created when the project is saved.

Save the changed data.

Choose Save.

Exit from the Project Builder.

3. A purchase requisition was generated the last time the data was saved.Display the requisition in the information system and convert therequisition to a purchase order.

Project System menu

Information System→Material→ Purchase Requisitions→ For Project

Choose the transaction by double-clicking.

Specify the project definition T-100## and choose Execute.Continued on next page


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An overview of all purchase requisition is displayed. Assign thepurchase requisition to a purchasing information record and create thepurchase order.

Right-click material E-1517 and choose Select.

Choose Assign automatically.

Display the overview of the assignment and create the purchase order.

Choose Assignments.

The purchase requisitions are listed in the overview according to theirassignments.

Place the cursor on the line below vendor 1002 Muller KG.

Select Process assignment.

Confirm the first dialog box by choosing Continue.

If another dialog box appears, select New purchase order.

The purchase order appears.

On the left side of the overview, select your purchase requisition andcopy it to the purchase order. You may need to scroll to the top of thelist to see the requisitions.

Choose Adopt.

Save the purchase order.

Choose Save.

The purchase order number appears in the status bar. If the screenreturns to the assignment overview without displaying the purchaseorder number in the status bar, select Reqs.per assgt. and locate thepurchase order number in the list.

Make a note of the order number: ____________

Exit from the assignments overview by choosing Back.

Save the changed purchase requisitions.

Exit from the report using Back.

4. The component you ordered is delivered. Receive the component withreference to your purchase order.



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Logistics → Materials Management → Purchasing → Purchase Order →Follow-On Functions → Goods Receipt


Use the following data:

Field Name ValuesPurchase order Your order numberOK Activate

Enter your purchase order number to the right of the Purchase ordernumber and choose Execute to transfer the data.

Activate the OK flag.

Post the goods receipt.

The component is expensed to activity 3100.

Exit from the transaction using Back.

Task 2:Evaluate your actual data in the cost element report (session 2).

1. Switch to session 2 and refresh your data.

Switch to session 2.

Report → Refresh

Hint: All values are expensed directly to the project because thiscomponent was defined as non-stock. None of the quantities orrelated values is managed through inventory control.

2. Select the total value in the Actual column.

Display the line items for the actual values.

Select the total value in the Actual column.

Choose Call up report.

Change the report layout:



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Specify that the columns Document number and User should also bedisplayed.

Choose Change Layout.

Select the fields in question in the right-hand column.

Move the fields to the left column by clicking the left arrow.

Choose Transfer Enter.

Place your cursor on one of the document numbers, and go to the sourcedocument.

Place your cursor on a document number.

Choose Source document.

Hint: By choosing Environment → Accounting documents, youcan display the accounting documents (for example, financialaccounting, cost accounting, profit center accounting, andprofitability analysis) for an actual line item.

Return to the cost element report.

Choose Back or Cancel several times.



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Solution 8: Procuring Non-StockComponentsTask 1:Call up the Project Builder and assign a non-stock component to activity 3200Material procurement plant components for your project T-100##.

Go to Session 1.




1. Assign component E-1517 to activity 3200 Material procurement plantcomponents as a non-stock item.

Expand the project definition and the WBS element Planning of system andinstrumentation. Select activity 3200 to display activity details.

Assign the material in the component overview.

Select Component overview.

Use the following data for the assignment:

Field Name ValuesMaterial E-1517Requirements quantity 1Item category N


A dialog box appears. Select the procurement type and create a purchaserequisition for the network.

Set the Purchase requisition for network indicator.

Confirm your entries by selecting Continue.


a)

2. Display the detail screen of the component.



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Select the component line in the overview and choose General at thebottom of the screen to invoke the detail screen.


Select Procurement parameters. Which account assignment category hasbeen entered for the quantity/value flow? __________

Hint: Note that the generation rule for the purchase requisitionis Immediately. This means that the purchase requisition isautomatically created when the project is saved.


Choose Save.


a)

3. A purchase requisition was generated the last time the data was saved.Display the requisition in the information system and convert therequisition to a purchase order.

Project System menu



Specify the project definition T-100## and choose Execute.

An overview of all purchase requisition is displayed. Assign thepurchase requisition to a purchasing information record and create thepurchase order.

Right-click material E-1517 and choose Select.


Display the overview of the assignment and create the purchase order.

Choose Assignments.

The purchase requisitions are listed in the overview according to theirassignments.


Select Process assignment.



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The purchase order appears.

On the left side of the overview, select your purchase requisition andcopy it to the purchase order. You may need to scroll to the top of thelist to see the requisitions.

Choose Adopt.


Choose Save.

The purchase order number appears in the status bar. If the screenreturns to the assignment overview without displaying the purchaseorder number in the status bar, select Reqs.per assgt. and locate thepurchase order number in the list.

Make a note of the order number: ____________

Exit from the assignments overview by choosing Back.


Exit from the report using Back.

a)

4. The component you ordered is delivered. Receive the component withreference to your purchase order.

Logistics → Materials Management → Purchasing → Purchase Order →Follow-On Functions → Goods Receipt


Use the following data:

Field Name ValuesPurchase order Your order numberOK Activate

Enter your purchase order number to the right of the Purchase ordernumber and choose Execute to transfer the data.

Activate the OK flag.



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The component is expensed to activity 3100.

Exit from the transaction using Back.

a)

Task 2:Evaluate your actual data in the cost element report (session 2).



Report → Refresh

Hint: All values are expensed directly to the project because thiscomponent was defined as non-stock. None of the quantities orrelated values is managed through inventory control.

a)

2. Select the total value in the Actual column.

Display the line items for the actual values.

Select the total value in the Actual column.


Change the report layout:

Specify that the columns Document number and User should also bedisplayed.

Choose Change Layout.

Select the fields in question in the right-hand column.

Move the fields to the left column by clicking the left arrow.

Choose Transfer Enter.

Place your cursor on one of the document numbers, and go to the sourcedocument.

Place your cursor on a document number.



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Return to the cost element report.



a)


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Lesson Summary

You should now be able to:� Explain the differences between N and L component item categories� Describe the direct procurement of components� Understand the procurment using Requirements Planning


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Lesson: Managing Stocks of Material Components

Lesson OverviewThis lesson explains how to manage stock of material components. Thelesson introduces stocks and describes collective stock, valuated stock, andnon-valuated stock. It also describes the prerequisites to manage stocks andaccount assignment categories and component-processing parameters.


� Define stocks� Define collective stock� Identify valuated and non-valuated project stock� Identify prerequisites for managing stocks� Identify account assignment categories

Business ExampleThe engineering and design department creates BOMs and material mastersfor your turbine project using CAD systems. To plan material costs andinitiate the component procurement procedure, you assign components toactivities of your project using the BOM-PS interface.


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PLM230 Lesson: Managing Stocks of Material Components

Introducing Stock Types

Figure 66: Managing Stocks of Material Components

Material components in networks can be managed in various stocks. Basedon the network and settings entered in the material master, you can use thefollowing types of stock:

� Plant stock: Managed in general stock. This material is not assignedto any sales order or project. It is available for use by general plantrequirements.

� Project Stock: Viewed from material requirements planning, projects canhave their own stock. Individual stock segments are assigned to WBSelements. The stock is procured for exclusive use by the project andis not available for other projects.

� Sales order stock: Viewed from material requirements planning, salesorders can have their own stock. Individual stock segments are assignedto sales order items. This stock can be issued only for a specific salesorder item.

The term collective stock refers to the use of plant stock. Individual stockrefers to the use of project and sales order stock. The determination of acomponent managed as either collective or individual stock depends onsettings within the material master, project definition, and sales order item.

Project stock and sales order stock can be managed on either valuated ornon-valuated basis. When using valuated stock, each material in stock ismanaged on a both quantity and value basis. The monetary value of each


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quantity of material is calculated separately. All goods movements for themake-to-order stock trigger corresponding postings in the stock accounts inFinancial Accounting. When using non-valuated stock, stocks are managedon quantity basis only, without being valuated directly in terms of money.Goods movements to individual stock are not valuated and do not resultin postings to Financial Accounting. All expenses associated with theprocurement of stock are posted directly to the WBS element, the sales order,or the production order. The total value of the project stock is calculated at theend of the period by Results Analysis and transferred to Financial Accountingsimilar to WIP calculation.

Collective Stock

Figure 67: Collective Stock: Quantities and Values

Material components managed as collective stock are characterized bysynchronous quantity and value flows. Each quantity posting (such as a goodsreceipt, material withdrawal from the warehouse, and delivery) leads to amatching posting in FI/CO. Each quantity posting (such as a goods receipt)leads to a matching posting in FI/CO.

Projects are affected only by the costs and availability of components directlyassigned to them. In the example, component T-20600 is taken from stockat the inventory value. Production control is responsible for production.


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The production order handling production of T-20600 and its costs arenot displayed in the project information system, but the reservation andsubsequent issue of component T-20600 to the network are displayed.

Valuated and Non-Valuated Project Stock

Figure 68: Valuated Project Stock: Quantities and Values


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Characteristics of valuated project/sales order stock:

� For each goods movement (MM), there is a matching value posting inFI (FI document) and Cost Accounting (CO document). The plannedcosts, commitment values, and actual costs (for components managed asproject or sales order stock) are displayed in the order or network.

� Values are displayed at each production level (unlike non-valuated stock,where values from the various levels are simply displayed as costs inthe WBS element).

� G/L account determination for project stock is controlled differently fromcollective stock using specific valuation classes for sales order stock andproject stock in the material master.

� In orders, WIP is formed similar to collective stock. You do not useResults Analysis to calculate it (as in non-valuated stock). Note: TheResults Analysis function to display cost of sales by period remains inplace.

Figure 69: Non-Valuated Project Stock: Quantities and Values

Components managed as project or sales order stock are procured by the stockobject (WBS element or sales order item).


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In the example, assembly T-20600 and its components are managed in projectstock. The procurement data for these materials (for example, productionorder for T-20600) can be viewed in the Structure and Controlling informationsystems.

For non-valuated project/sales order stock, quantity and value flows areseparate. Goods issues lead to quantity postings in the network or productionorder (the material is being used). Material movements are not valuated,which means that an FI or CO document is not created. The exception is thegoods receipt for the purchase order. An FI document is generated and postedto consumption by the WBS element.

This procedure results in costs for respective MRP levels being incomplete innetworks or production orders. WIP stocks must be valued using ResultsAnalysis and the related settlement.

Prerequisites for Managing Project Stocks

Figure 70: Prerequisites

Determine if a material can be managed in an individual stock in the materialmaster on the MRP detail screen using the Individual/coll. field. If you want tomanage a material in project stock or sales order stock, this field must be set toIndividual requirements only (1) or Individual and collective requirements ( ).

� To use sales order stock in a network, enter the sales order item thatmanages the stock in the network header.

� To use project stock in an activity, you need to assign the activity to theWBS element that manages the stock.


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Determine if project stock is permitted for a project in the Control tabbed pageof the project definition. The options for Project stock are:

� No project stock� Valuated project stock� Non-valuated project stock

The system copies the default value from the project profile. You can changethis value when you create the project. After saving the project, you cannotchange this setting for project stock. The setting applies to all WBS elementscreated for this project definition.

If you work with project stock, the WBS structure should resemble the BOMstructure of the product to be produced or the assembly BOM of the asset. Ifnot, the assignment of components to WBS elements often differs from theassignment of network activities to WBS elements.


Figure 71: Account Assignment Categories

When you assign a material component, the system determines an accountassignment category that determines stock management and settlement. Thisdepends on the assignment of the network and the settings in the materialmaster. If various stocks are permitted, a dialog box prompts you to determinethe stock type that should be used. The stock type selected determines theaccount assignment category of the component.


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Items that are procured directly (non-stock) are not assigned to a stocksegment. They do not pass through a warehouse. The costs are settled tothe consuming object, which is either the network activity (activity-assignednetworks) or the network header (header-assigned networks) in the ProjectSystem. If the material is procured in a production order, the costs are settledto the production order.

You cannot use an individual stock if the dependent requirements indicatorfor the material is set to Collective requirements only or if the network oractivity is not assigned to an object that manages an individual stock (a salesorder item or WBS element with individual stock). The account assignmentcategory that you entered in Customizing the Project System underMaterial→Procurement → Check Acct Asst Types and Document Types for Purchase Reqs inthe acct. assgnmt gen. field is used.

These account assignment categories and item categories are examples fromthe SAP standard system. You can use various values with the same settings.

Figure 72: Account Assignment Category


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The account assignment category determines the CO object to which documentquantities and values are assigned. Use it to determine the following:

� If goods movements in Logistics use plant stock, sales order stock, orproject stock (using the special stock indicator [SSI]).

� The CO object to which the values of a material document are assigned(using the consumption posting indicator).

Consumption Posting Settings:

F = Collective stock, consumption posting to the consumer (order, and activity)

The account assignment category is important for directly procuringcomponents.

E = Quantities and values managed in the sales order item

This account assignment category is important for make-to-order productionwithout WBS.

D = Quantities managed using sales order item and values managed in projects

This account assignment category is important for non-valuated project stockwith WBS and sales order item.

Q = Quantities and values managed in projects

This account assignment category is important for project stock.

G = Plant stock, values managed using project

This account assignment category is important for sales order items soldfrom plant stock with value posting to the project. It differs from accountassignment category F in the field control of the account assignment block.


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Component-Processing Parameters

Figure 73: Component Details

The component detail screen reflects the processing parameters that have beenassigned to the requirement.

� The item category determines the procurement process. Stock processesuse item category L

� The individual/collective requirements indicator from the material masteris displayed. For this example, the individual requirements indicator 1 isassigned, requiring the use of either project or sales order stock.

� The account assignment category Q is selected based on the requirementto use project stock management for this component. This accountassignment category is determined through a configuration table,which determines which account assignment category to assign to thecomponent when project stock management is determined.

� The project definition determines that valued project stock will be used,which is reflected with theM for valuation.


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The component detail screen for purchasing reflects data about the plannedcost for the component.

� The planned price of the component is displayed.� The G/L account for the consumption of the component is displayed,

selected through account determination for the movement type 281.� The cost relevancy indicator is selected. This determines that the

component cost is included in the planned costs of the network. It hasno bearing on actual cost postings.

Figure 74: Valuation of Project and Sales Order Stock


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If either valuated sales order or project stock are selected, the value of thespecial stock inventory is determined using a predefined valuation strategysequence.

� The first goods receipt results in valuation on the basis of one of thesubsequent strategies in the specified sequence. A standard price selectedthrough one of the subsequent strategies is copied to strategy and servesas the valuation basis going forward.

� The system calculates the standard price on the basis of your customerexit COPCP002, material valuation for valuated project, or sales orderstock.

� The system calculates the standard price in a sales order cost estimate,which can be based on a unit cost estimate, a product cost estimate, ora combination of the two.

� The system determines the standard price using the production ordercost estimate or the planned costs for the WBS element. If there aremultiple production orders for the same sales order item, the systemuses the standard price that results from the production order deliveredfirst (see strategy one).

� If you created the same material as a collective requirements material, thesystem reads the material master record of the collective requirementsmaterial. The standard price in the master record of the collectiverequirements material may have been calculated in various ways, such asa standard cost estimate.


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Figure 75: Tables for MM Integration

Material allocated to activities in a network can be kept in various stocks.Depending on your project, you can access different types of stock formaterials planning.

Sales order stock and project stock are important for controlling purposes (formonitoring the stock value in a sales order or project) and for MRP (the stocksare reserved for the sales order item or WBS element; other stock elementscannot access them).

The various stock types are managed for each material component using theaccount assignment category. You define the account assignment categorywhen you assign the material to the network activity (popup in manualassignment, strategies in BOM-PS interface, and standard network).

The possible account assignment categories depend on the assignment ofthe network activity to a stock object (WBS element or sales order item); theitem category for the assignment (direct procurement for non-stock items),and on the material master, which can exclude collective or individual stockmanagement.

As of Release 4.5A, you can use MRP elements (grouping) to manage a jointproject stock for an entire project or for several projects (this is a roughermethod than managing stock for individual WBS elements).


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Maintain the possible account assignment categories for network purchaserequisitions in Customizing.


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Exercise 9: Assigning Stock Components

Exercise ObjectivesAfter completing this exercise, you will be able to:� Assign BOM components to the activities of a project using the BOM-PS

interface

Business ExampleThe engineering and design department creates BOMs and material mastersfor your turbine project using CAD systems. To plan material costs and initiatethe component procurement procedure, you need to assign components toactivities in your project using the BOM-PS interface.

Task:Transferring BOMs (session 1).

Assign BOM components to activities in your project T-100## (through thecommon reference points).


Material → Planning→ Bill of material transfer (double-click)

1. Enter the following data in the initial screen:

Field Name ValuesProject definition T-100##Profile 1300Material T-20000Plant 1300BOM usage 3Valid from Today

Deselect other fields



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2. Transfer the bill of materials. Choose Execute.

Note: The results overview displays the components of the(multi-level) BOM that were assigned to activities in your projectbecause they had the same reference points. The components areassigned when you save your data.

There are two other ways to assign material components toactivities:

1. Copying from another project (that is, components havealready been assigned to the other project).

2. Assigning components manually using the Project Builder orproject planning board.

3. Save the allocation.

Choose Save.

Click Back.

4. Display the components assigned to the project from the project builder.


Project → Project Builder.


Expand the project definition. Scroll down to activity 3000. You willsee that material components are now listed for activities 3000, 3100,3200, and 4100.

5. Display the procurement parameters for material T-20600 to review theaccount assignment category and special stock indicator.

Choose component T-20600 to display its details. T-20600 is assignedto activity 4100.


Select Procurement parameters.

The account assignment category Q has been entered for thequantity/value flow, and the special stock indicator Q for project stock.



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Solution 9: Assigning Stock ComponentsTask:Transferring BOMs (session 1).

Assign BOM components to activities in your project T-100## (through thecommon reference points).


Material → Planning→ Bill of material transfer (double-click)


Field Name ValuesProject definition T-100##Profile 1300Material T-20000Plant 1300BOM usage 3Valid from Today

Deselect other fields

a)

2. Transfer the bill of materials. Choose Execute.

Note: The results overview displays the components of the(multi-level) BOM that were assigned to activities in your projectbecause they had the same reference points. The components areassigned when you save your data.

There are two other ways to assign material components toactivities:

1. Copying from another project (that is, components havealready been assigned to the other project).

2. Assigning components manually using the Project Builder orproject planning board.

a)Continued on next page


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3. Save the allocation.

Choose Save.

Click Back.

a)

4. Display the components assigned to the project from the project builder.


Project → Project Builder.


Expand the project definition. Scroll down to activity 3000. You willsee that material components are now listed for activities 3000, 3100,3200, and 4100.

a)

5. Display the procurement parameters for material T-20600 to review theaccount assignment category and special stock indicator.

Choose component T-20600 to display its details. T-20600 is assignedto activity 4100.


Select Procurement parameters.

The account assignment category Q has been entered for thequantity/value flow, and the special stock indicator Q for project stock.


a)


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Exercise 10: MRP for Components

Exercise ObjectivesAfter completing this exercise, you will be able to:� Carry out MRP for the components of your project

Business ExampleYou need to perform MRP for your turbine project to plan procurementmeasures for material requirements. The system creates planned orders formaterials produced in-house. For components that are procured externally,purchase requisitions are created and passed on to Purchasing.

Task:Perform MRP for the components of your project (session 1).


Material → Planning → MRP Project

1. Enter the following data in the selection screen:

Field Name ValuesProject def. T-100##Create purchase req. 1Also plan unchangedcomponents.

Yes

Display the material list. YesDo not modify other fields.

2. Confirm your entries and start the planning procedure.

Choose Enter twice.

Return to the main SAP menu from the list of planned materials.

Click Back.

Choose Exit.


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Solution 10: MRP for ComponentsTask:Perform MRP for the components of your project (session 1).


Material → Planning → MRP Project

1. Enter the following data in the selection screen:

Field Name ValuesProject def. T-100##Create purchase req. 1Also plan unchangedcomponents.

Yes

Display the material list. YesDo not modify other fields.

a)

2. Confirm your entries and start the planning procedure.

Choose Enter twice.

Return to the main SAP menu from the list of planned materials.

Click Back.

Choose Exit.

a)


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Exercise 11: Production of Assemblies

Exercise ObjectivesAfter completing this exercise, you will be able to:� Carry out production processing for an assembly

Business ExampleThe assembly T-20600 is maufactured in-house. You have already purchasedcomponents of the assembly. You now create and confirm a production order.The produced assembly is delivered to project stock where it is withdrawnfor the network.

Task:Perform production processing for the assembly T-20600.

You have already purchased the components of assembly (T-20610, T-20620,T-20630) using the collective purchase order for the project.

First, create the production order.

1. Convert a planned order to a production order. Display thestock/requirements list for T-20600 in plant 1300.

Logistics → Production → Production Control → Control → StockRequirements List


Field Name ValuesMaterial T-20600Plant 1300



You will see that each project�s network created an individual demandfor the material (OrdRes � Order Reservation) and execution of ProjectMRP in step 4-3 created a planned order (PlOrd) as the replenishmentsupply for each demand.



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Click the Add. Data for Element icon adjacent to the planned orderrelated to your project. Select Convert Planned Order to ProductionOrder.

The system displays the production order.

Select the Assignments tab. Note that the production order is assignedto your project.

To report actualize for the order the status of the order must be Released.Release the production order.

Functions → Release

Save the production order.

Click Save.

2. Record your production order number for T-20600.

First, click the Refresh icon on the stock/requirements list display.

The planned order for your project has become a production order.(Note: This may take a few moments, because the system processes afew tasks asynchronously).

Record your production order number.

Production Order: ____________________________

3. Issue components to the production order.

Logistics → Production→ Production Control→ Goods Movement→ GoodsIssue.

Select To order�

Enter the production order number in the dialog box and then selectEnter.

Note that the components and quantities required to manufacture aT-20600 have defaulted on the screen.

Verify that each material has a storage location defaulted. If missing,enter storage location 0001.

Record the issue of components to the production order.

Choose Post.




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Choose Back.

4. Go to session 2 (cost element report).

Refresh your data.


Report → Refresh

Note: Note that the project stock (Account 790000) is reduced andthat Cons.Semi-Finshed Products (Account 890000) has increasedexpenditure. A statistical posting is made to the project, becausethe production order is assigned to the project.

Select the actual costs of the cost element 890000 and invoke the lineitem report.

Select the actual costs of 890000.


Place the cursor on the lines related to your production order.

Display the accounting documents.

Choose the accounting document.

Choose the cost accounting document.

Choose Environment → Accounting Documents.

Select the line Accounting document.

Select the line Cost accounting document.

Exit from the document display and line item report and return to thecost element report.

Click Back several times.


5. Perform an order confirmation for the full order quantity.

Logistics → Production → Production control → Confirmation→ Enter →For Order

Enter the production order number.



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Field Name ValuesFinal Confirmation SelectYield to conf. 2

Select Save.

6. Enter a goods receipt for the production order.

Logistics → Production→ Production Control→ Goods Movement→ GoodsReceipt.

Note: The production confirmation in the previous step reportedproduction completion only in manufacturing. Goods werenot receipted in inventory from production. The order couldhave been configured to receipt the inventory based on theconfirmation. The Control Key on the routing of the productionorder determines if an automated goods receipt is performedwhen production is confirmed.


Field Name ValuesMovement type 101Order The production order number for

your projectPlant 1300Storage location 0001

Choose Enter.


Choose Post.

Confirm any messages that appear.


Click Back.


Refresh your data.



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Report → Refresh.

Note: Note that the project stock (Account 790000) is increasedand that Factory Output (Account 895000) has an actual posting.A statistical posting is made to the project for the production orderreceipt because the production order is assigned to the project.




Place the cursor on the first line in the line item report.







Exit from the document display and line item report. Return to the costelement report.




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Solution 11: Production of AssembliesTask:Perform production processing for the assembly T-20600.

You have already purchased the components of assembly (T-20610, T-20620,T-20630) using the collective purchase order for the project.

First, create the production order.

1. Convert a planned order to a production order. Display thestock/requirements list for T-20600 in plant 1300.

Logistics → Production → Production Control → Control → StockRequirements List


Field Name ValuesMaterial T-20600Plant 1300



You will see that each project�s network created an individual demandfor the material (OrdRes � Order Reservation) and execution of ProjectMRP in step 4-3 created a planned order (PlOrd) as the replenishmentsupply for each demand.

Click the Add. Data for Element icon adjacent to the planned orderrelated to your project. Select Convert Planned Order to ProductionOrder.

The system displays the production order.

Select the Assignments tab. Note that the production order is assignedto your project.

To report actualize for the order the status of the order must be Released.Release the production order.

Functions → Release

Save the production order.



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Click Save.

a)

2. Record your production order number for T-20600.

First, click the Refresh icon on the stock/requirements list display.

The planned order for your project has become a production order.(Note: This may take a few moments, because the system processes afew tasks asynchronously).

Record your production order number.

Production Order: ____________________________

a)

3. Issue components to the production order.

Logistics→ Production→ Production Control→ Goods Movement→ GoodsIssue.

Select To order�

Enter the production order number in the dialog box and then selectEnter.

Note that the components and quantities required to manufacture aT-20600 have defaulted on the screen.

Verify that each material has a storage location defaulted. If missing,enter storage location 0001.

Record the issue of components to the production order.

Choose Post.


Choose Back.

a)


Refresh your data.




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Report → Refresh

Note: Note that the project stock (Account 790000) is reduced andthat Cons.Semi-Finshed Products (Account 890000) has increasedexpenditure. A statistical posting is made to the project, becausethe production order is assigned to the project.




Place the cursor on the lines related to your production order.










a)

5. Perform an order confirmation for the full order quantity.

Logistics → Production → Production control → Confirmation → Enter →For Order

Enter the production order number.

Field Name ValuesFinal Confirmation SelectYield to conf. 2



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Select Save.

a)

6. Enter a goods receipt for the production order.

Logistics→ Production→ Production Control→ Goods Movement→ GoodsReceipt.

Note: The production confirmation in the previous step reportedproduction completion only in manufacturing. Goods werenot receipted in inventory from production. The order couldhave been configured to receipt the inventory based on theconfirmation. The Control Key on the routing of the productionorder determines if an automated goods receipt is performedwhen production is confirmed.


Field Name ValuesMovement type 101Order The production order number for

your projectPlant 1300Storage location 0001

Choose Enter.


Choose Post.

Confirm any messages that appear.


Click Back.

a)


Refresh your data.




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Report → Refresh.

Note: Note that the project stock (Account 790000) is increasedand that Factory Output (Account 895000) has an actual posting.A statistical posting is made to the project for the production orderreceipt because the production order is assigned to the project.











Exit from the document display and line item report. Return to the costelement report.



a)


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Lesson Summary

You should now be able to:� Define stocks� Define collective stock� Identify valuated and non-valuated project stock� Identify prerequisites for managing stocks� Identify account assignment categories


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Lesson: Stock Procurement Process

Lesson OverviewThis lesson describes the stock procurement process. It explains how toassigning material components using an example. It also introduces thepurchasing process and explains the production order process. It alsodescribes goods issue in network activities.


� Assign material components� Explain the purchasing process� Explain the production order process� Identify goods issue for network activity

Business ExampleIn the turbine project, you can plan material costs by allocating materialcomponents to activities.

You need to purchase non-stock components for your activities.


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PLM230 Lesson: Stock Procurement Process

Assigning Material Components: An Example

Figure 76: Example: Turbine T-100##: Assigning Material Components

The following process examines a part of the turbine project that comprises:

� Two WBS elements T-100## and T-100##.4� Network activity 4100 (Production)� The assigned material component T-20600. The material component

T-20600 (bearing block) is manufactured in-house.

Components are assigned to activities in project T-100## using the BOM-PSinterface.

In the process, the system uses common reference points that are maintainedfor both components in the BOM and activities for the project.


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Figure 77: Project Structure

The component T-20600 is assigned to activity 4100. This component isproduced in-house.

During the BOM PS transfer, the requirement for T-20600 is assigned the stocktype Project Stock.


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Figure 78: Assembly Structure: MRP

When MRP is executed for the project, the BOM for T-20600 is exploded andthe demand is passed to components T-20610, T-20620, and T-20630. Thesecomponents are procured externally and inherit the stock type Project Stock.

The individual/collective indicators for each material are:

T-20600 = 1

T-20610 = ( )

T-20620 = ( )

T-20630 = ( )

( ) indicates that components inherit the value of the individual/collectiveindicator from the preceding level in the assembly structure.


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Purchasing Process

Figure 79: Stock Procurement Steps

The sample process shows the creation of project T-100##. It has a singleactivity, 4100.

Activity 4100 contains the component T-20600 (manufactured in-house).

Starting from the bottom, the system shows the purchasing and productionprocesses involved in producing T-20600 and the values in the productionorder, network, and WBS.

The process ends with the issue of T-20600 from project stock and consumptionby the network activity.


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Figure 80: Purchasing Components (1)

MRP for project T-100## plans all the materials managed as project stock forT-100##.

The costs under T-100## show the planned costs for T-20600.

MRP results in purchase requisitions for materials T-20610, T-20620, andT-20630 (in direct procurement, this also happens where there is no MRP),among other things.

Purchasing converts these requisitions to purchase orders for vendors.

The report also shows a purchase order commitment of 5200.


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Figure 81: Purchasing Components (2)

This is an example of a cost element report for a project.

If commitment accounting for the controlling area is active, the open purchaseorder items for the project are recorded as commitments.

Element 790000 is a balance sheet account. All other elements are profit andloss accounts.


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Figure 82: Goods Receipt for Purchase Order (1)

Goods are received for purchase orders for components T-20610, T-20620, andT-20630. The goods receipt increases the project stock for T-100##.

The goods receipt reduces the commitment by the amount of the purchaseorder value. Stock is formed to the amount of standard costs (for standardprice control) or the purchase order value (for moving average price control).Differences between the receipt value and purchase order value are pricedifferences that can be viewed as costs in WBS element T-100##, if youmaintain account control accordingly.

In the report, the stock column displays values for project stock (stockcommitment).

The Actual column displays the actual costs of project elements.


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Figure 83: Goods Receipt for Purchase Order (2)

This is an example of a project cost element report.

Project stock can be statistically reported for all goods movements of theproject stock using value type 11 if the balance sheet inventory account iscreated as a cost element (category 90). Value type 11 is used to record aposting as a statistical actual value.

The project stock inventory value is dynamically determined based on theplanned cost of the item. In this example, the purchase price was 5200, but thestock value was determined as 5400. The price variance of 200 was creditedwhen the inventory was received.

Note: Before a balance sheet inventory account is created as a statisticalcost element, the inventory account should already be identified inMM account determination for the inventory posting process BSX.



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Production Order Process

Figure 84: Creating a Production Order and Goods Issue (1)

The planned order for T-20600 is converted to a production order, whichcontains target costs of 6000 for internal activities and 5400 for the componentsT-20610, T-20620, and T-20630. These plan costs for materials are displayedonly for valuated project stock and collective stock.

The cost report displays both the assembly T-20600 and the production orderassigned to the WBS element T-100## (with its target costs). This value isaggregated in the WBS element.

The project stocks T-20610, T20620, and T-20630 are consumed by theproduction order at the price calculated in valuation. The actual costs aredebited to the production order.


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Figure 85: Creating a Production Order and Goods Issue (2)

This is an example of a cost element report for a production order.

The goods issue of materials T-20610, T-20620, and T-20630 credit the balancesheet inventory accounts and debit the material consumption accounts in FI.In CO, the goods issue creates a statistical credit to the balance sheet inventoryaccount for project stock and debits the production order. The productionorder actual costs are reflected in the project report.



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Figure 86: Production Order Confirmation (1)

The production order is confirmed.

Variances amounting to 500 are entered when the order is confirmed.Confirmations increase the actual costs of the order by 6500. The confirmationscredit the cost center assigned to the work center.

The relevant postings are made in PP and CO. FI is not updated, because thisis a secondary cost allocation.


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Figure 87: Production Order Confirmation (2)

This is an example of a cost element report for a production order.

The costs of the production order confirmation are debited to the productionorder.



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Figure 88: Production Order Delivery (1)

The final confirmation is entered for the production order and materialT-20600 is delivered to project stock.

This increases the stock value for material T-20600 in T-100## stock by thevalue of the prices from the material project stock segment.

If this price is not specified, it is determined according to the followingstrategy:

Valuation from user exit COPCP002

Product cost planning is carried out for a sales order item assigned to the WBSelement of the project stock segment

Unit costing for material component in network activity (4100)

Activated production lot costing for project stock segment

Preliminary costing for first production order delivered for project stocksegment

Standard price from plant segment of material

In the diagram, stock is set up according to the strategy to the amount of thetarget costs of the production order. The same amount is credited to the order.


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Variances are calculated for the production order. The variances (differencesbetween target costs and actual costs) are settled to materials according to thesettlement rule for the production order. An FI document and a debit or creditposting to the price difference account are generated. If the Variances indicatoris set in the settlement profile for the production order, the settlement alsogenerates a CO line item posting to the profitability segment. You can also useaccount control (see below) to assign the variance as costs to the assigned WBSelement. Settling the project sends the variances to Profitability Accounting.

Figure 89: Production Order Delivery (2)


The stock value of the project stock was determined by the planned costs ofthe production order. This is considered the standard price for the projectstock segment.

The remaining variances in the production order can be settled directly toprofitability analysis or the WBS element.



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Goods Issue for Network Activity

Figure 90: Goods Issue for Network Activity (1)

A goods issue for the network is posted for T-20600. This reduces the projectstock (crediting the WBS element) and the actual costs are debited to thenetwork.

The actual costs of the network activity are aggregated and displayed forWBS elements.

T-100##.4 and T-100##.


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Figure 91: Goods Issue for Network Activity (2)


The goods issue of the project stock to the network activity produces actualcosts on the network activity.

Element 790000 is a balance sheet account. All other elements shown areprofit and loss accounts.


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Exercise 12: The Purchasing Process

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a purchase order� Post goods receipts and goods issues� Evaluate the value flow using a cost element report

Business ExampleIn this exercise, the external activities and material components required forthe project are purchased from vendors.

To simplify matters, assume that all the goods that are to be procuredexternally are procured from one vendor. Also, you will not issue a requestfor quotation.

Task 1:Assign the purchase requisitions to vendor 1000 (session 1).

1. Do this by invoking the Purchase Requisitions for Project report in theinformation system.


Information system→Material→ Purchase requisitions→ For project

If required, enter DB profile 130000000000.

Select the turbine project T-100## and execute the report.

Enter T-100##.

Choose Execute.

2. Specify that purchase requisitions should be automatically assigned tovendors using existing purchasing info records.

Select the purchasing info record 5500000093 for the externally-processedactivity.

Edit → Select → Select all.


In the dialog box, double-click info record 5500000093 (only if required).Continued on next page


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3. Save the allocations.


Choose Change requisitions.

Choose Back twice.

4. In Purchasing, create a purchase order for vendor 1000.

To do this, use the purchase requisition assignment list you created.

Logistics→Materials Management→ Purchasing→ Purchase order→ Create→ Via Requisition Assignment List

Enter the following data in the initial screen:

Field Name ValuesPurchasing organization 1000Vendor 1000WBS element T-100##


Choose Execute.

Edit the assignments to vendor 1000.

Enter a purchase order of type NB.

Select line 1000....NB.....1000...

Choose Process assignment.

Accept the data in the dialog box and choose Continue Enter.

In the Create Purchase Order screen, if present first close the EnjoySAP:Purchase Order Help section in the middle part of the screen.

Close the EnjoySAP: Purchase Order Help section.

Expand the Document Overview on the left of the screen to view openpurchase requisitions. Open the item overview.

Drag the divider to the right.

Open the item overview (if necessary).

Select all the purchase requisition items and copy them to the purchaseorder.



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Place the cursor on the first purchase requisition.

Press the Shift key.

Holding the Shift key down, place the cursor on the last purchaserequisition to select the block.

Choose Adopt.



Make a note of the purchase order number:

__________________________


Choose Save.

Choose Back twice.

Task 2:Goods receipt (session 1).

1. Enter a goods receipt for the purchase order.

Logistics → Materials Management → Inventory Management → GoodsMovement→ Goods Receipt→ For Purchase Order→ GR for Purchase Order(MIGO)

First, make the settings for default values. Maintain missing settings.

Choose Settings → Default Values.

The following should be maintained in the detail screen: (Maintainmissing settings.)

Field Name ValuesStorage location 0001.....Materiallager

(Material store)In Plant 1300......(Frankfurt)Propose the OK function in future XSuggest all items X

Adopt these settings.Continued on next page


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Choose Adopt.


2. Enter the purchase order number in Goods Receipt Purchase Order.


Goods receipt Purch.order The purchase order number younoted before

Choose Execute Enter.

3. Post the goods receipt.

Choose Post.



Choose Back.

Task 3:Evaluation in the cost element report (session 2)


Refresh your data.


Report → Refresh

Hint: Note that the value of the project stock for materialsreceived has increased.

2. Select the stock value in the report.

Invoke the line item report.

Select the stock value.


3. Place the cursor on the first line in the line item report.




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Place the cursor on line.

Choose Environment → Accounting Documents




Choose Back several times.


Task 4:Goods issue and consumption (session 1)

In session 1, enter a goods issue for the network reservations.

Logistics→Materials Management→ Inventory Management→ Goods Movement→ Goods Issue (MIGO)

Hint: The groups block each other when you work on exercise 5-4 (thematerials have the same plant segments). For this reason, each groupshould complete exercise 5-4-2 as quickly as possible.

1. Find the reservations for the first network.

Choose Find reservation.


Field Name ValuesNetwork First network of your project T-100## (if

necessary, you can use matchcodes tosearch for this)Leave other fields as they are

Choose Find.



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The lower part of the screen now displays the reservations. First, extendthe lower part of the screen upwards to see all the reservations for yournetwork.

Extend the lower screen area using Drag & Drop.

2. Select all the reservations except those for components T-20600 and P-100.

Copy the selected reservations.

Press the Control key.

Holding the Control key, select all the reservations except T-20600 andP-100.

→ Selections are highlighted in yellow

Choose Adopt.

Close the Search Result screen.

3. Post the goods issue.

Verify that each material has a storage location defaulted. If missingenter storage location 0001.

Choose Post.


Choose Back.

Task 5:Evaluation in the cost element report (session 2).


Refresh the data.


Report → Refresh

Hint: Note that the project stock is reduced. Consumption resultsin actual costs in activities 3000, 3100, and 3200. These actual costsare also displayed in an aggregated form for WBS elements.

2. Select the actual costs of the cost element 890000 and invoke the lineitem report.



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Select the line Cost accounting doc.





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Solution 12: The Purchasing ProcessTask 1:Assign the purchase requisitions to vendor 1000 (session 1).

1. Do this by invoking the Purchase Requisitions for Project report in theinformation system.


Information system→Material→ Purchase requisitions→ For project

If required, enter DB profile 130000000000.

Select the turbine project T-100## and execute the report.

Enter T-100##.

Choose Execute.

a)

2. Specify that purchase requisitions should be automatically assigned tovendors using existing purchasing info records.

Select the purchasing info record 5500000093 for the externally-processedactivity.

Edit → Select → Select all.


In the dialog box, double-click info record 5500000093 (only if required).

a)

3. Save the allocations.


Choose Change requisitions.

Choose Back twice.

a)

4. In Purchasing, create a purchase order for vendor 1000.

To do this, use the purchase requisition assignment list you created.

Logistics→Materials Management→ Purchasing→ Purchase order→ Create→ Via Requisition Assignment List



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Field Name ValuesPurchasing organization 1000Vendor 1000WBS element T-100##


Choose Execute.

Edit the assignments to vendor 1000.

Enter a purchase order of type NB.

Select line 1000....NB.....1000...


Accept the data in the dialog box and choose Continue Enter.

In the Create Purchase Order screen, if present first close the EnjoySAP:Purchase Order Help section in the middle part of the screen.

Close the EnjoySAP: Purchase Order Help section.

Expand the Document Overview on the left of the screen to view openpurchase requisitions. Open the item overview.

Drag the divider to the right.

Open the item overview (if necessary).

Select all the purchase requisition items and copy them to the purchaseorder.

Place the cursor on the first purchase requisition.

Press the Shift key.

Holding the Shift key down, place the cursor on the last purchaserequisition to select the block.

Choose Adopt.



Make a note of the purchase order number:Continued on next page


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__________________________


Choose Save.

Choose Back twice.

a)




First, make the settings for default values. Maintain missing settings.


The following should be maintained in the detail screen: (Maintainmissing settings.)

Field Name ValuesStorage location 0001.....Materiallager

(Material store)In Plant 1300......(Frankfurt)Propose the OK function in future XSuggest all items X

Adopt these settings.

Choose Adopt.


a)





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Goods receipt Purch.order The purchase order number younoted before


a)


Choose Post.



Choose Back.

a)



Refresh your data.


Report → Refresh

Hint: Note that the value of the project stock for materialsreceived has increased.

a)

2. Select the stock value in the report.


Select the stock value.


a)

3. Place the cursor on the first line in the line item report.




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a)


In session 1, enter a goods issue for the network reservations.


Hint: The groups block each other when you work on exercise 5-4 (thematerials have the same plant segments). For this reason, each groupshould complete exercise 5-4-2 as quickly as possible.

1. Find the reservations for the first network.




necessary, you can use matchcodes tosearch for this)Leave other fields as they are

Choose Find.Continued on next page


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The lower part of the screen now displays the reservations. First, extendthe lower part of the screen upwards to see all the reservations for yournetwork.

Extend the lower screen area using Drag & Drop.

a)

2. Select all the reservations except those for components T-20600 and P-100.

Copy the selected reservations.

Press the Control key.

Holding the Control key, select all the reservations except T-20600 andP-100.

→ Selections are highlighted in yellow

Choose Adopt.

Close the Search Result screen.

a)


Verify that each material has a storage location defaulted. If missingenter storage location 0001.

Choose Post.


Choose Back.

a)



Refresh the data.




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Report → Refresh

Hint: Note that the project stock is reduced. Consumption resultsin actual costs in activities 3000, 3100, and 3200. These actual costsare also displayed in an aggregated form for WBS elements.

a)















a)


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Lesson Summary

You should now be able to:� Assign material components� Explain the purchasing process� Explain the production order process� Identify goods issue for network activity


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Unit Summary PLM230

Unit SummaryYou should now be able to:� Explain the differences between N and L component item categories� Describe the direct procurement of components� Understand the procurment using Requirements Planning� Define stocks� Define collective stock� Identify valuated and non-valuated project stock� Identify prerequisites for managing stocks� Identify account assignment categories� Assign material components� Explain the purchasing process� Explain the production order process� Identify goods issue for network activity


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Test Your Knowledge

1. The materials required to complete the activities of a project are identifiedon the for the individualactivity.Fill in the blanks to complete the sentence.

2. List the SAP-standard item categories.

3. Explain the importance of material requirements planning.

4. Individual stock refers to the use of and sales order stock.Fill in the blanks to complete the sentence.

5. What do you mean by non-valuated project/sales order stock?

6. What determines whether the CO object to which document quantitiesand values can be assigned?


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7. Each quantity posting (such as a goods receipt) leads to a matchingposting in FI/CO.Determine whether this statement is true or false.□ True□ False

8. To use project stock in an activity, you need to assign the activity to theWBS element that manages the stock.Determine whether this statement is true or false.□ True□ False

9. Which of the following is the difference between the receipt value andpurchase order value?Choose the correct answer(s).□ A Price differences□ B Standard costs□ C Order value□ D Amount

10. For what kind of stocks are plan costs for materials displayed?

11. The goods issue of the project stock to theproduces actual costs on

the network activity.Fill in the blanks to complete the sentence.

12. While assigning material components, the system uses commonreference points that are maintained for both components in the BOMand activities for the project.Determine whether this statement is true or false.□ True□ False


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Answers

1. The materials required to complete the activities of a project are identifiedon the component overview for the individual activity.

Answer: component overview

2. List the SAP-standard item categories.

Answer: The SAP-standard item categories are N - Stock Item and L -Non-stock Item

3. Explain the importance of material requirements planning.

Answer: The main objective of material requirements planning is toensure material availability by procuring the required quantities on timefor both internal and sales and distribution requirements. This includesmonitoring stocks and creating procurement proposals for purchasingand production.

4. Individual stock refers to the use of project and sales order stock.

Answer: project

5. What do you mean by non-valuated project/sales order stock?

Answer: For non-valuated project/sales order stock, quantity and valueflows are separate. Material movements are not valuated, which meansthat an FI or CO document is not created.

6. What determines whether the CO object to which document quantitiesand values can be assigned?

Answer: The account assignment category determines the CO object towhich document quantities and values are assigned.


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7. Each quantity posting (such as a goods receipt) leads to a matchingposting in FI/CO.

Answer: True

Each quantity posting (such as a goods receipt) leads to a matchingposting in FI/CO.

8. To use project stock in an activity, you need to assign the activity to theWBS element that manages the stock.

Answer: True

To use project stock in an activity, you need to assign the activity to theWBS element that manages the stock.

9. Which of the following is the difference between the receipt value andpurchase order value?

Answer: A

Differences between the receipt value and purchase order value are pricedifferences that can be viewed as costs in WBS element.

10. For what kind of stocks are plan costs for materials displayed?

Answer: The plan costs for materials are displayed only for valuatedproject stock and collective stock.

11. The goods issue of the project stock to the network activity producesactual costs on the network activity.

Answer: network activity

12. While assigning material components, the system uses commonreference points that are maintained for both components in the BOMand activities for the project.

Answer: True

While assigning material components, the system uses commonreference points that are maintained for both components in the BOMand activities < for the project.


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Unit 5Commitment Management

Unit OverviewThis unit discusses project commitments by explaining concepts such asfunds commitments, reporting purchases, customizing commitments, andcost elements for balance sheet accounts. The unit also explains project cashmanagement tasks and planning payments.


� Define commitments� Explain the value flow for commitment items� Describe the process for updating commitments for projects� Explain project cash management� Explain payment flows

Unit ContentsLesson: Project Commitments .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244

Exercise 13: Reporting .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .253Lesson: Project Cash Management ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .257

Exercise 14: Purchasing Components ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .263


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Unit 5: Commitment Management PLM230

Lesson: Project Commitments

Lesson OverviewThe lesson provides an overview of the process of managing fundscommitments. It explains funds commitments and discusses the value flowfor commitment items. It also explains the process of updating commitmentsfor projects.


� Define commitments� Explain the value flow for commitment items� Describe the process for updating commitments for projects

Business ExampleYou have a project-reporting requirement to report the contractual and stockobligations that have not yet resulted in actual expenses for the project. Youutilize commitment reporting to satisfy this requirement.

Funds Commitments

� Contractual commitments which result in actual costs:

� Purchase Requisition� Purchase Orders

� Capitalized costs for the valuated project stock

Commitments management is a part of the cost monitoring process.

Commitments show you the contractual or planned commitments that donot yet affect accounting (no expenses yet) but that will result in actual costsat a later time. This allows you to analyze the effects on cost accounting ofpurchase orders for sales document items.

In addition, you can view the funds commitment of the valuated project stockinventory on the WBS as statistical actual data in the Project InformationSystem.


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PLM230 Lesson: Project Commitments

Unlike unvaluated project stock, a goods receipt in valuated project stock leadsto actual costs on the relevant Controlling objects (SD document item andWBS element). In order to display the committed funds on the project stockin the Controlling information system, the system reads the correspondingsegments in the material master.

If the MRP run creates the purchase requisitions, the commitments for thesepurchase requisitions are not updated.

Reporting Purchases

Figure 92: Reporting: Purchase Requisition

The diagram depicts the use of valuated project or sales order stock. Account790000 is a balance sheet account. All other accounts are expense.

Commitments are created through purchase requisitions and purchase orders.Commitments are reduced by various business transactions such as goodsorders. Commitments are reduced by various business transactions such asgoods receipt and invoice receipt. The commitments data is transferred toControlling.

The commitment is reduced by business transactions (such as goods receipts)and actual costs are incurred by the corresponding account assignment object.This continues until, for example, the business transaction Purchase order isclosed and the purchase order commitment is reduced to zero.


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If the MRP run creates the purchase requisitions, the commitments for thesepurchase requisitions are not updated.

Commitments are always displayed with a value and, if required, a quantityfor the cost element, the fiscal year, and the period when the costs are expectedto be incurred.

Non-valuated project stock postings update the consumption account 890000when the purchase requisition commitment is reported.

Figure 93: Reporting: Purchase Order


As the purchase requisition is converted to a purchase order, the commitmentis updated to reflect this process. The original commitment for the purchaserequisition is reduced, and a new commitment for the purchase order value iscreated.

Non-valuated project stock postings update the consumption account 890000when the purchase order commitment is reported.


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Figure 94: Reporting: Goods Receipt


As the purchase order is received, the open commitment item is reduced.

Since the balance sheet account for the project stock is established as astatistical cost element, the inventory value is recorded against the project.

Non-valuated project stock postings are posted as an actual cost for theconsumption account 890000 when the goods receipt is reported.


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Figure 95: Reporting: Goods Issue


Once the valuated project stock is issued to the network, the statistical actualfor the balance sheet inventory value is credited to the WBS, and a new entryfor the actual expense of the inventory is debited to the network activity.

The goods issue does not make any financial postings if you use non-valuatedproject stock since the expense of the inventory is posted as actual costsduring the goods receipt.


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Customizing Commitments

Figure 96: Customizing - Commitments

Commitment Management is activated for the Controlling Area and projectrelated controlling objects (WBS/NWA) in Customizing. This is different fromother controlling objects, such as internal orders and sales orders.


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Commitments occur:

� Automatically in Purchasing, due to:

� Purchase requisitions (purchase requisition commitment) definethe internal requirement for a material or a service. Purchaserequisitions have a control function that enables you to change themat any time. Purchase requisition commitments are automaticallyreduced when the requisition is converted into a purchaseorder. However, MRP generated requisitions are not reported ascommitments until they are converted to purchase orders.

� Purchase orders (purchase order commitment) define contractualrequests to a vendor to supply certain goods or services accordingto the agreed conditions. No short-term, unilateral changes can bemade. Purchase order commitments are automatically reduced bygoods receipt processing.

� Manually through Funds Commitments (commitment for fundscommitments):

� You can use Funds Commitments to manually reserve funds forcosts you will probably incur, but cannot yet assign to a specificbusiness transaction (such as, a purchase order or a purchaserequisition). When the actual business transaction is processed theuser must reduce the funds commitment manually.

Cost Elements for Balance Sheet Accounts

Figure 97: Cost Elements for Balance Sheet Account


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The committed funds on the project stock not only need to be displayed, butmust also have interest calculated, especially in projects. The information onthe committed funds should be updated daily. The stock values need to beupdated in Controlling under the value type 11, which is a statistical actualposting. Statistical actual postings are recorded for all goods movements forproject (and sales order) stock if the stock account is created as a primary costelement with the cost element category 90 (statistical cost element for balancesheet accounts).

Note: Before an inventory account is created as a statistical costelement, the inventory account must be identified for MM Accountdetermination for the Inventory posting (BSX process).


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Exercise 13: Reporting

Exercise ObjectivesAfter completing this exercise, you will be able to:� Report Purchasing Commitments� Report Project Stock

Business ExampleCommitments for the project can be evaluated in the project informationsystem. The inventory value of project stock can be recorded as a statisticalactual for the project. You will purchase a project stock material and reviewthe value flow for purchasing commitments and valuated project stock.

The values for each step are displayed in the information system:

(a) Purchase requisition open item from the time the purchase requisitionis generated

(b) Purchase order open item from the time the purchase order is created

(c) Actual costs from the time the goods or invoice is received

You will evaluate the data in the cost element report Z6P1 (session 2).

Task:Create a second session (referred to as session 2 from hereon).

This session will be used for the remaining exercises in this unit to performevaluation.




Project System:

Information System→ Financials→ Execute Report→ Cost Element Report.


Choose Execute.



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If required, enter controlling area 1000 and database profile 130000000000.





Choose Execute.


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Solution 13: ReportingTask:Create a second session (referred to as session 2 from hereon).

This session will be used for the remaining exercises in this unit to performevaluation.




Project System:

Information System→ Financials→ Execute Report→ Cost Element Report.


Choose Execute.

If required, enter controlling area 1000 and database profile 130000000000.

a)




a)


Choose Execute.

a)


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Lesson Summary

You should now be able to:� Define commitments� Explain the value flow for commitment items� Describe the process for updating commitments for projects


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PLM230 Lesson: Project Cash Management

Lesson: Project Cash Management

Lesson OverviewThis lesson describes the process of project cash management. It explainsthe steps involved in setting up project cash management and also describespayment flows.


� Explain project cash management� Explain payment flows

Business ExampleAs a project manager you need to keep track of your funds commitments. Youalso want to know if the customer is paying the amount agreed upon on time.

Project Cash Management Tasks

Figure 98: Project Cash Management: Tasks

Project Cash Management considers business transactions posted from feedersystems to projects from a payment standpoint.


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Project Cash Management provides the most accurate information possible onincoming and outgoing payments and optimizes cash flows with a view tomaximizing project profits.

The project manager is responsible for Project Cash Management.

Project Cash Management uses a different revenue/expenditure split fromthat used in the Treasury function:

� In Treasury, the revenues and expenditures are split by customer andvendor group.

Treasury monitors the funds in the business with the aim of safeguardingits liquidity.

� In Project Cash Management, the revenues and expenditures are splitby project element.

Project Cash Management monitors the project funds in order tosafeguard liquidity and limit funds commitments (calling in revenues asearly as possible so that payments can be met).

Figure 99: Master Data: Commitment Items

The item category and financial transaction are attributes of the commitmentitem. The item category is used to classify commitment items into revenue,expenditure, and balance items. Balance items correspond to bank accounts.The financial transaction indicates the type of business transaction involved(such as revenue/expenditure postings or cash holdings posting).

Only commitment items with financial transaction 30 are copied to ProjectCash Management.


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Steps in setting up Project Cash Management:

� Create FM area.� Assign company code to FM area.� Create commitment items and assign commitment items to the G/L

accounts:

� Automatic: The commitment items in a specified G/L accountarea are derived from G/L accounts (with the same number) andassigned to the G/L accounts in a 1:1 ratio. This option can only beused with company code/FM area assignments in a 1:1 ratio. This1:1 assignment is often not possible in Funds Management.

� Manual: Enter the appropriate commitment item in the G/L account.� Activate Project Cash Management.� Reconstruct data from MM and FI (first MM, then FI).

Planning Payments

Figure 100: Planning Payments

You can plan payment flows (revenues and expenditure) on the basis of fiscalyears, periods, or days.


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Manual planning of revenues and expenditure in WBS elements is performedby period. Planning takes place at the commitment item level (Project CashManagement master data).

In automatic planning of financial data, the quantity structure in the networkand the billing plans in the WBS or SD document are valuated. Automaticplanning is performed by day. Planned line items are written.

The commitment items are determined using the assignment to G/L accounts.Unlike the costs and revenue calculation, the calculation of the payment datetakes into account the vendor and customer payment terms respectively.

Note: For networks, the credit-side payment plan is determined usingonly the asynchronous network costing.

In the PS billing plan, the dates and payment terms are used for planningincoming payments. The billing plan data and payment terms (of the dates orsales order items) are also used for assigning the sales order items. If thereis no billing plan for the sales order item, the delivery date (including thepayment conditions) is used.

In the case of externally processed activities and components procuredexternally, invoicing plans (including payment conditions) are used. Whenthere is no invoicing plan, delivery dates (including payment conditions)are used.

Payment data is only planned for general costs activities when an invoicingplan has been maintained.


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Figure 101: Billing Plan - Invoicing Plan

The billing plan is relevant to planned revenues and incoming payments.Down payment dates are only relevant to payments (not revenues). The datesfor milestone billing appear as planned incoming payments and plannedrevenues. The payment terms and payment target (For example, paymenttwo weeks after invoice issue, with 3% discount) are important for dates andamounts.

As the project is executed, invoices are generated using billing and appear inthe project as actual revenues and customer payment obligations. In the caseof down payment data, the billing program generates down payment requeststhat are recorded in the payment data for the project.

You can create a billing plan for a sales order, a sales order item, or for abilling element in the WBS.

The invoicing plan is relevant to planned costs and planned outgoingpayments. The dates for the down payment are only relevant to payments (notcosts). The payment terms (For example, payment two weeks after invoiceissue, with 3% discount) are important for dates and amounts.

You can create invoicing plans for externally-processed activities, serviceactivities, cost activities, and externally-procured material components.


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Figure 102: Recording Costs, Revenues, and Payment Data

Actual data is recorded through purchasing and sales documents andcustomer and vendor subsidiary ledgers.

The actual data can be evaluated in the PS Information System throughcost/revenue and payment reports.

Note: Down payment requests, down payments, and payments donot lead to costs or revenues and cannot be evaluated using cost orrevenue reports.


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Exercise 14: Purchasing Components

Exercise ObjectivesAfter completing this exercise, you will be able to:� Report purchasing commitments� Report project stock

Business ExampleCommitments for the project can be evaluated in the project informationsystem. In addition, the inventory value of project stock can be recorded as astatistical actual for the project. You will purchase a project stock material, andreview the value flow for the purchasing commitments and valuated projectstock. The values for each step are shown in the information system.


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Task 1:Using Project Builder, assign another material component to the activity 3100.Assign material E-1203A as a stock item, and select the option of purchaserequisition and reservation for WBS (project stock).

Go to Session 1

Project System menu.



Expand the project definition and the WBS element Planning of systems andinstrumentation. Select activity 3100 to display the activity details.

Assign the material in the component overview. Select Component overviewin the activity detail screen.

Enter the material details with the following data:

Field Name ValuesMaterial E-1203ARequirements quantity 1Procurement indicator Delete field contentsItem category L


The dialog box for selecting the procurement type appears again.

Select the Preq+Res-WBS elem. indicator.

Confirm your entries by choosing Continue.


1. Display the detail screen for the component.

Select the component line in the overview and click the "General" icon atthe bottom of the screen to invoke the detail screen.


Select the Procurement parameters tab.



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What account assignment category has been entered for thequantity/value flow? ______


Select Save.



Refresh your data.


Report → Refresh

3. Select the commitment value for cost element 790000 in the report.


Select the commitment value.


4. Position the cursor on the last line of the line item report.

Display the document.

Position the cursor on a line.


The component E-1203A is an externally-procured material.

When you added the component, a purchase requisition wasautomatically created and passed onto Purchasing. Commitments areshown for this component based on the purchase requisition created forthis component. Other commitments for the project are also listed.

5. Make a note of the purchase requisition number for E-1203A:

______________________

6. Exit from the purchase requisition and line item report, and return to thecost element report.


Confirm the popup messages that appear.



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Task 2:In the Project Information System, convert the purchase requisition to apurchase order for vendor 1000.

Return to session 1.

Switch session. Project System menu:



Specify your project definition T-100## and choose Execute.

1. An overview of all purchase requisitions appears. First assign thepurchase requisition to a purchasing information record, and then createthe purchase order.

Right-click on material E-1203A → Select.

Select Assign automatically.

Display the overview of the assignments and then create the purchaseorder.

Choose Assignments.

2. The purchase requisition is listed in the overview. You can create a newpurchase order by clicking the Process assignment pushbutton.





3. The purchase order appears.

On the left side of the overview, select your purchase requisition andcopy it to the purchase order.

Select Adopt.


Choose Save.



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4. The purchase order number appears in the status bar. If the screenreturns to the assignment overview without displaying the purchaseorder number in the status bar, select Reqs.per assgt., and locate thepurchase order number from the list.

Make a note of the purchase order number: ____________

Exit the assignments overview by choosing Back.


Exit the report using Back.



Refresh the data.


Report → Refresh





3. Position the cursor on the first line.

Branch to the document display.

Place the cursor on the appropriate line.


Note that the value of the purchase requisition was reduced and replacedby the purchase order commitment.

The purchase requisition commitment and purchase order commitmentcan be shown in separate columns in cost reports.

4. Exit the purchase order and line item report, and return to the costelement report.



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Switch session.

1. Now enter a goods receipt for the purchase order.


First, set the default values.


Enter the following data on the detail screen:

Field Name ValuesStorage location 0001In Plant 1300Propose the OK function in future XSuggest all items X


Choose Adopt.

Confirm the dialog box that appears.



Goods receipt4)

Purch. order Purchase order number (you made anote of in step 3-1-4)



Choose Post.

Confirm any warning messages that appear.



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Choose Back.



Refresh the data.


Report → Refresh

Note that the commitment value has reduced and that the costs for theproject stock for E-1203A are shown in cost element 790000.

Note: The inventory balance sheet has been created as a statistical costelement. This enables the value of project stock to remain visible forthe project accounting reports, even though the inventory is still on thebalance sheet, and not yet expensed to the project.

2. Select the actual value for cost element 790000 in the report.


Select the actual value for cost element 790000.


3. Position the cursor on the line in the line item report.





Select line Accounting document.

Select line Cost accounting doc.

4. Exit the document display and line item report, and return to the costelement report.





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In session 1, enter a goods issue for the network reservation for E-1203A.


The groups will block each other when carrying out exercise 4-8 (the materialshave the same plant segments). For this reason, each group should carry outexercise 3-5-2 as quickly as possible.

1. First, find the reservation for the first network.




necessary, you can use matchcodes to searchfor this)Leave other fields as they are

Choose Find.

The lower part of the screen now shows the reservations.

First, extend the lower part of the screen upwards to see all thereservations for your network.

Extend lower screen area using Drag & Drop.

2. Select only the reservation for E-1203A. Copy the reservation selected.

Select the reservations for E-1203A.

Choose Adopt.


Verify that the material has a default storage location. If the storagelocation is missing, enter storage location 0001.

Choose Post.


Choose Back.Continued on next page


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Refresh the data.


Report → Refresh

Note that the project stock is reduced.

Consumption results in actual costs in the activity 3100. The actual costsare also displayed in aggregated form for the WBS elements.


Select the actual costs for 890000.


Place the cursor on the line containing the line item report.



Choose the cost accounting document




Exit the document display and line item report, and return to the costelement report.




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Solution 14: Purchasing ComponentsTask 1:Using Project Builder, assign another material component to the activity 3100.Assign material E-1203A as a stock item, and select the option of purchaserequisition and reservation for WBS (project stock).

Go to Session 1

Project System menu.



Expand the project definition and the WBS element Planning of systems andinstrumentation. Select activity 3100 to display the activity details.

Assign the material in the component overview. Select Component overviewin the activity detail screen.

Enter the material details with the following data:

Field Name ValuesMaterial E-1203ARequirements quantity 1Procurement indicator Delete field contentsItem category L


The dialog box for selecting the procurement type appears again.

Select the Preq+Res-WBS elem. indicator.

Confirm your entries by choosing Continue.


1. Display the detail screen for the component.

Select the component line in the overview and click the "General" icon atthe bottom of the screen to invoke the detail screen.




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Select the Procurement parameters tab.

What account assignment category has been entered for thequantity/value flow? ______


Select Save.


a)


Refresh your data.


Report → Refresh

a)





a)

4. Position the cursor on the last line of the line item report.




The component E-1203A is an externally-procured material.

When you added the component, a purchase requisition wasautomatically created and passed onto Purchasing. Commitments areshown for this component based on the purchase requisition created forthis component. Other commitments for the project are also listed.

a)

5. Make a note of the purchase requisition number for E-1203A:



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______________________

a)

6. Exit from the purchase requisition and line item report, and return to thecost element report.



a)

Task 2:In the Project Information System, convert the purchase requisition to apurchase order for vendor 1000.


Switch session. Project System menu:



Specify your project definition T-100## and choose Execute.

1. An overview of all purchase requisitions appears. First assign thepurchase requisition to a purchasing information record, and then createthe purchase order.

Right-click on material E-1203A → Select.

Select Assign automatically.

Display the overview of the assignments and then create the purchaseorder.

Choose Assignments.

a)

2. The purchase requisition is listed in the overview. You can create a newpurchase order by clicking the Process assignment pushbutton.






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a)

3. The purchase order appears.

On the left side of the overview, select your purchase requisition andcopy it to the purchase order.

Select Adopt.


Choose Save.

a)

4. The purchase order number appears in the status bar. If the screenreturns to the assignment overview without displaying the purchaseorder number in the status bar, select Reqs.per assgt., and locate thepurchase order number from the list.

Make a note of the purchase order number: ____________

Exit the assignments overview by choosing Back.


Exit the report using Back.

a)



Refresh the data.


Report → Refresh

a)






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a)





Note that the value of the purchase requisition was reduced and replacedby the purchase order commitment.

The purchase requisition commitment and purchase order commitmentcan be shown in separate columns in cost reports.

a)

4. Exit the purchase order and line item report, and return to the costelement report.

a)



Switch session.

1. Now enter a goods receipt for the purchase order.


First, set the default values.





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Choose Adopt.


a)



Goods receipt4)

Purch. order Purchase order number (you made anote of in step 3-1-4)


a)


Choose Post.



Choose Back.

a)



Refresh the data.


Report → RefreshContinued on next page


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Note that the commitment value has reduced and that the costs for theproject stock for E-1203A are shown in cost element 790000.

Note: The inventory balance sheet has been created as a statistical costelement. This enables the value of project stock to remain visible forthe project accounting reports, even though the inventory is still on thebalance sheet, and not yet expensed to the project.

a)





a)

3. Position the cursor on the line in the line item report.







a)

4. Exit the document display and line item report, and return to the costelement report.



a)



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In session 1, enter a goods issue for the network reservation for E-1203A.


The groups will block each other when carrying out exercise 4-8 (the materialshave the same plant segments). For this reason, each group should carry outexercise 3-5-2 as quickly as possible.

1. First, find the reservation for the first network.




necessary, you can use matchcodes to searchfor this)Leave other fields as they are

Choose Find.

The lower part of the screen now shows the reservations.

First, extend the lower part of the screen upwards to see all thereservations for your network.

Extend lower screen area using Drag & Drop.

a)

2. Select only the reservation for E-1203A. Copy the reservation selected.

Select the reservations for E-1203A.

Choose Adopt.

a)


Verify that the material has a default storage location. If the storagelocation is missing, enter storage location 0001.

Choose Post.Continued on next page


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Choose Back.

a)



Refresh the data.


Report → Refresh

Note that the project stock is reduced.

Consumption results in actual costs in the activity 3100. The actual costsare also displayed in aggregated form for the WBS elements.

a)







Choose the cost accounting document




Exit the document display and line item report, and return to the costelement report.



a)


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Lesson Summary

You should now be able to:� Explain project cash management� Explain payment flows


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Unit Summary PLM230

Unit SummaryYou should now be able to:� Define commitments� Explain the value flow for commitment items� Describe the process for updating commitments for projects� Explain project cash management� Explain payment flows


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Test Your Knowledge

1. The commitments for the purchase requisitions created by an MRP runare not updated.Determine whether this statement is true or false.□ True□ False

2. The goods issue does not make any financial postings when using thenon-valuated project stock.Determine whether this statement is true or false.□ True□ False

3. No short-term, unilateral changes can be made to purchase orders.Determine whether this statement is true or false.□ True□ False

4. Down payment requests, down payments, and payments do not lead tocosts or revenues and cannot be evaluated using cost or revenue reports.Determine whether this statement is true or false.□ True□ False

5. Project Cash Management monitors the project funds in order to:Choose the correct answer(s).□ A Safeguard liquidity□ B Limit funds commitments□ C Issue goods□ D Pay the customer on time


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Answers

1. The commitments for the purchase requisitions created by an MRP runare not updated.

Answer: True

The commitments for the purchase requisitions created by an MRP runare not updated.

2. The goods issue does not make any financial postings when using thenon-valuated project stock.

Answer: True

The goods issue does not make any financial postings if you use thenon-valuated project stock.

3. No short-term, unilateral changes can be made to purchase orders.

Answer: True

No short-term, unilateral changes can be made to purchase orders.

4. Down payment requests, down payments, and payments do not lead tocosts or revenues and cannot be evaluated using cost or revenue reports.

Answer: True

Down payment requests, down payments, and payments do not lead tocosts or revenues and cannot be evaluated using cost or revenue reports.

5. Project Cash Management monitors the project funds in order to:

Answer: A, B

Project Cash Management monitors the project funds in order tosafeguard liquidity and limit funds commitments.


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Unit 6Actual Costs

Unit OverviewThis unit covers the execution of projects . The unit begins by introducingproject execution aspects. It then explains external procurements andprocessing and activity confirmation. The unit finally explains about the CrossApplication Time Sheet (CATS), Execution Servicesand reposting internalactivities.


� Describe the value flow associated with purchasing process for externalprocessing activities

� Apply the method to enter confirmations using the structuredinformation system

� Record a Cross Application Time Sheet (CATS) and the valid cost objectsfor a CATS entry

� Describe the role of reposting internal activity allocations

Unit ContentsLesson: Aspects of Project Execution.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .286

Exercise 15: Reporting .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .307Exercise 16: Purchasing External Activities ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311Exercise 17: Activity Confirmation ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .321Exercise 18: Cross-Application Time Sheet (CATS) .. . . . . . . . . . . . . . . . . . . . . .327Exercise 19: Evaluation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .333


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Unit 6: Actual Costs PLM230

Lesson: Aspects of Project Execution

Lesson OverviewThis lesson focuses on project execution. It explains the value flow associatedwith purchasing process for external processing activities. The lesson alsoexplains how to enter confirmations using the structured information system.It describes the process of recording a Cross Application Time Sheet (CATS)and valid cost objects for a CATS entry. The lesson also describes the role ofreposting internal activity allocations.


� Describe the value flow associated with purchasing process for externalprocessing activities

� Apply the method to enter confirmations using the structuredinformation system

� Record a Cross Application Time Sheet (CATS) and the valid cost objectsfor a CATS entry

� Describe the role of reposting internal activity allocations

Business ExampleAs an employee of a company, you earlier recorded actual data to the projectfor material transactions that occurred through inventory management andproduction order processing. You need to enter additional actual data toprojects by recording activity confirmations and Cross Application TimeSheets (CATS) for network activities. Actual costs can be evaluated inaggregated form in the hierarchy of the Work Breakdown Structure.


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PLM230 Lesson: Aspects of Project Execution

Introduction to Project Execution

Figure 103: Aspects of Project Execution

You need to release the project (or the work packages) before you enter actualdata.

Actual data is posted to the project by business transactions from variouscomponents of the SAP system, such as:

� Purchasing: Purchase order, goods receipt for materials and services(MM)

� Inventory Management: Goods issue for reservations (MM)� Billing of the sales order (SD)� Confirmation of assigned production orders (PP)� Confirmation of assigned PM orders (PM)� Internal activity allocation, assigned CO orders (CO)� Down payments, payments (FI)� Settlement to assets (AM)� Entry of work for persons and posting as activity confirmation (CATS)


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Figure 104: Cost Integration Using Account Assignment

In the business transactions shown in the diagram, the link to accountingand controlling is the account assignment of the transaction. The accountassignment specifies the cost object that should be debited for costs. Costsactually incurred are posted directly to the WBS, network, or activity.

The account assignments correspond to cost planning transactions. Forexample:

� For purchase requisitions, purchase orders, and goods receipts:

Externally processed activities, service activities, and materialcomponents procured directly

� For material withdrawals:

Stock items or primary cost planning

� For invoice postings:

Primary cost planning, revenue planning, and general costs activities

� For activity allocation:

Activity input planning

� For confirmations:

Internally processed activities


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Figure 105: Cost Integration Using Assignment

For order categories in the SAP R/3 System, the link to the WBS element is byassignment. The assignment of an order to a WBS is maintained in the headerof the order. This assignment is also maintained when an order or networkis a subnetwork.

Each order is its own cost object. Based on the assigned WBS element, you canevaluate the assigned funds from orders (the planned costs, commitments,and actual costs) by the assigned WBS element.

During processing, the order keeps its own actual costs incurred until thecosts are settled.

In the structure information system, you can evaluate and edit (interactively)not only WBS elements and activities but also assigned orders.


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Figure 106: Assigned Orders in Reporting

This is an example of a cost element report for the project.

Assigned orders are displayed hierarchically under the appropriate WBSelement.

Although actual costs are posted to orders, they are reported as assignedfunds for the WBS elements.


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External Procurement and Processing

Figure 107: The Purchasing Process

Purchase requisitions are generated by the network for external processingactivities, service activities, and material components procured externally(non-stock). These purchase requisitions are passed on to the purchasingdepartment where they are processed further.

A service activity triggers a similar purchasing process, but can also contain ahierarchy of planned services to be purchased and value limits for unplannedservices. Goods receipt for services involves two steps, entering the servicesperformed and accepting the services.

The purchase requisition results in purchase requisition commitments for theaccount assignment object (activity or WBS element). When the purchaserequisition is converted to a purchase order, it results in purchase ordercommitments for the account assignment object (this value type is differentfrom purchase requisition commitments). Based on the account assignmentcategory of the purchase order, actual costs are posted upon goods receipt orinvoice receipt (valuated, non-valuated goods receipt). Based on the accountassignment, they are passed on to the network activity or WBS element.

In the standard SAP system, the account assignment category F is used forthe account assignment of orders, which includes network headers, networkactivities, maintenance orders, internal orders, and manufacturing orders.


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As an alternative to the network generating purchase requisitionsautomatically, you can manually create purchase requisitions and purchaseorders and assign them to WBS elements.

Figure 108: External Procurement

With non-stock procurement, you procure components directly from anexternal vendor.

When you post the goods receipt for externally procured products, theconsumption of the provided part is posted simultaneously to the accountassignment object such as the activity.

The invoice from the vendor is posted with reference to the purchase orderor delivery. Any variance between the invoice value and the purchase ordervalue is posted to the account assignment object.


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Figure 109: External Procurement: Goods Receipt

The graphic shows the posting of the goods receipt. The receipt for thenon-stock component is posted as an expense and is not posted to inventoryaccounts. The account assignment object is debited with the costs of externallyprocured material. The costs are based on the net purchase order price.

The accounts for posting are selected using materials management automaticaccount determination.

Figure 110: External Procurement: Posting


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Any price differences that arise when the invoice is posted are posted to theaccount assignment object.

Figure 111: External Processing

For external processing, the vendor and net price are defined in the purchaseorder.

When the goods receipt for external processing is posted, the accountassignment object is debited for the process based on the net purchase orderprice.

The invoice receipt is posted with reference to the purchase order receipt. Anydifferences between the preliminary goods receipt value (net purchase orderprice) and the invoice value are posted to the account assignment object.


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Figure 112: External Processing: Goods Receipt

Account assignment for the costs of external processing is performed on thecost object.

Figure 113: External Processing: Invoice Receipt

Price differences between the goods receipt and the invoice receipt also areupdated to the cost object.


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Activity Confirmations

Figure 114: Confirmation Options

Confirmations document the processing status of activities and activityelements and enable you to forecast project progress. Various businesstransactions are carried out automatically by confirmations, such as postingactual costs, actual dates, actual labor (work), and, if applicable, changingthe activity status.


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Confirmations can be created in the following ways:

� Individually for each network, activity, activity element, or individualcapacity.

� As a collective confirmation.� Using the structure information system (by selecting activities and

accessing individual or collective confirmation). From the informationsystem, you can send a confirmation workflow to another user or anorganizational unit.

� Using the Cross-Application Time Sheet (CATS):

CATS is an integrated function used to enter actual time data importantin HR, PS, PM, CS, CO, and MM-SRV.

� Through the Internet (by creating an individual or collective confirmationor entering time data in the time sheet).

� Using the OpenPS interface through Palm Pilot or the PDC (Plant DataCollection) interface.

Figure 115: Turbine T-100##: Confirmation

Confirmations result in actual costs debited to network activities.Confirmations credit the cost center assigned to the work center and debitnetwork activities.


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Figure 116: Individual and Collective Confirmation

You can confirm an activity or activity element with an individualconfirmation. You enter the confirmation data for this type of confirmationon the detail screen.

You can confirm various networks, activities, activity elements, and individualcapacities at the same time with a collective confirmation. You enter theconfirmation data for this type of confirmation on the list screen.

From the Structures information system, you can perform the followingactions for the activities you select:

� Go directly to the individual confirmation transaction� Go directly to the collective confirmation transaction� Save a pool of confirmations (you can select this pool later in the

collective confirmation transaction or the time sheet)� Send a pool of confirmations as a workflow to other users who can

then go directly from their Office inbox to the collective confirmationtransaction


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Figure 117: Activity Confirmation

An activity allocation leads to a credit to the cost center assigned to the workcenter and a debit to the activity.

The price used for activity allocation is controlled by the valuation variantassigned to the actual costing variant.

The actual costing variant is used to determine the valuation strategy foractivities and business processes. It is not used to determine the valueof inventory transactions. Actual material costs are determined by theaccounting value of the inventory (based on the accounting view of thematerial master using either standard or moving average price control).


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Cross Application Time Sheet

Figure 118: CATS: Cross-Application Time Sheet

CATS is an integrated function that is used to enter actual time data importantin HR, PS, PM, CS, CO, and MM-SRV.

You determine the layout of the data entry screen using data entry profiles.

Report programs pass on the released (and, if necessary, approved) data tothe various applications. The actual time data may be important for variousapplications, in which case the data is transferred to the applications.

Notes on PP production orders:

You cannot use CATS to enter confirmations for production orders becauseconfirmations in production primarily handle quantities of goods and scrap.You can use CATS to enter hours and assign them to production orders (Orderfield) as the receiver object. The hours entered are updated as an internalactivity allocation in the production order when the data is transferred to CO.This method enables you to capture costs, but does not post a confirmation tothe production order.

You can use CATS to post time to a network header, network activity, order(maintenance, service, internal, etc), business process, costs center, cost object,WBS, and a sales order.


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Figure 119: Time Sheet: Data Entry Screen

Time data is entered for one or more people.

The screen configuration (for the request screen, worklist, and data entrypart) is flexible:

� Based on the employee group (using data entry profile)� User-defined (using table control)� Determines the cost objects that can be entered in the time sheet

You can provide a worklist for employees by selecting:

� Activities to which employees are assigned by the work center or workdistribution to employee(s) for PS, PM, and CS

� Activities for a confirmation pool (for PS, PM, and CS)� Objects the employee is working on (using CATS database)� Objects using user exits


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Figure 120: Data Transfer: Possible Combinations

The table shows the possible combinations to transfer time data to applications(transfers to single applications are not shown).

The system does not permit transfers to a CO+Logistics combination. Whenyou confirm an activity, the posting is treated only as a confirmation. After theconfirmation is posted, it generates the appropriate internal activity allocationto post the actual costs to the network and credits the performing cost center.

Transfers to Materials Management for external services are necessary when acontractor utilizes CATS to create a service entry sheet. The accepted serviceentry sheet will debit the network activity.


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Activity Allocation Using ECP Execution Services

Figure 121: Execution Services

From Release 4.6C, you can use Execution Services to enter commitments andactual costs for items that you plan using Easy Cost Planning.

The following postings are possible:

� Internal activity allocation (for internal activities)� Direct process allocation (for processes)� Reservations (for material items)� Goods issues (for material items)� Purchase requisitions (for material items, external activity items, service

items, and variable items)� Purchase orders (for material items, external activity items, service items,

and variable items)


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Reposting Internal Activities

Figure 122: Internal Activity Allocation Reposting

Repostings are used to correct posting errors for incorrect receivers. Througha reference document number, the system creates a reference between thedocument from the source activity allocation and the adjustment document.The source document remains unchanged.

Repost internal activity allocations to adjust incorrect postings that ariseduring internal activity allocation.

Reposting enables you to adjust an internal activity allocation withoutreversing the document and making an adjustment posting.

You select the internal activity allocations that are to be reposted on a selectionscreen and then process them. This makes it possible to:

� Process together all the activity allocations of a receiver� Repost to two receivers an activity quantity that was previously allocated

to only one receiver� Repost a portion of the posted activity quantity� Post an activity allocation to another receiver

The changed document rows are checked by the system. If the data does notcontain errors, it is updated in a single work step.


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Figure 123: Transferring Line Items from Financial Accounting Documents

Reposting line items enables you to adjust posting errors of costs andrevenues. You can repost specific line items from CO documents. This enablesyou to track primary postings (for example, from Financial Accounting (FI)through the account assignment object in Cost Center Accounting such asa cost center, an activity, or a WBS).


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Exercise 15: Reporting

Exercise ObjectivesAfter completing this exercise, you will be able to:� Record activity confirmation for the network activities to enter additional

actual data to the projects� Record Cross Application Time Sheet (CATS) for the network activities

to enter additional actual data to the projects

Business Examplea) Earlier, you recorded actual data to the project for material transactions thatoccurred through inventory management and production order processing.You will enter additional actual data in projects by recording activityconfirmations and Cross Application Time Sheets (CATS) for networkactivities. The actual costs can be evaluated in aggregated form in thehierarchy of the Work Breakdown Structure.

b) You will evaluate the actual data entered in the cost element report Z6P1(session 2).

Task:Create a second session (referred to as session 2).

This session will be used for the remaining exercises in this unit to performthe evaluation.

Choose Create Session

1.

In session 2, branch to the information system.



Enter report group Z6P1. Choose Execute.





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Do not change other fields.


Choose Execute.


Call up the line item report.



5. Position the cursor on the first line of the line item report.




Hint: Activity 1300 is an externally processed activity. Whenyou released the activity, a purchase requisition was created andautomatically passed to Purchasing. Commitments are displayedfor the activity because the purchase requisition was assignedto the activity.

6. Make a note of the purchase requisition number: ______________________

7. Exit the purchase order and line item report. Return to the cost elementreport.


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Solution 15: ReportingTask:Create a second session (referred to as session 2).

This session will be used for the remaining exercises in this unit to performthe evaluation.

Choose Create Session

1.

In session 2, branch to the information system.



Enter report group Z6P1. Choose Execute.


a)




a)


Choose Execute.

a)



Select the commitment value.Continued on next page


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a)

5. Position the cursor on the first line of the line item report.




Hint: Activity 1300 is an externally processed activity. Whenyou released the activity, a purchase requisition was created andautomatically passed to Purchasing. Commitments are displayedfor the activity because the purchase requisition was assignedto the activity.

a)

6. Make a note of the purchase requisition number: ______________________

a)


a)


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Exercise 16: Purchasing External Activities

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a purchase order in purchasing� Enter a goods receipt for the purchase order

Business ExampleThe work planned in activity 1300 is purchased from a service provider. Youcreate a purchase order in Purchasing for this purpose. You later enter a goodsreceipt for the purchase order.

The values for each step are displayed in the information system:

(a) Purchase requisition open item, from the time the purchase requisitionis generated

(b) Purchase order open item, from the time the purchase order is created

(c) Actual costs, when the goods or invoice are received

Task 1:1. Go back to session 1.

Switch session.

In Purchasing, you need to create a purchase order for vendor 1000.

Logistics → Materials Management → Purchasing → Purchase Order →Create → Automatically via Purchase Requisitions

Enter the following data on the initial screen:

Field Name ValuesPurchasing group 001Purchasing organization 1000Vendor 1000



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Per requisition indicator YesPurchase req The number you made a note of in step

1-1-6Do not change other fields.



Choose Execute.

Choose Back twice.



Refresh your data.


Report → Refresh









Hint: Note that the value of the purchase requisition was reducedand replaced by the purchase order commitment.

The purchase requisition commitment and purchase ordercommitment can be displayed in different columns in cost reports.

4. Make a note of the purchase order number:



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________________________




Switch session.



First, make the settings for the default values.





Choose Adopt.


2. Enter your purchase order number in Goods Receipt Purchase Order.


Goods receipt Purch.order Purchase ordernumber (you made anote of in step 1-3-4)

Choose Execute Enter.Continued on next page


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Choose Post.



Choose Back.



Refresh your data.


Report → Refresh

Hint: Note that the commitment value is reduced and that theactual costs for activity 1300 are shown.

Note: In the purchase order, you specify if the goods receipt isvaluated and gives rise to actual costs.





3. Place the cursor on the line in the line item report.




Position the cursor on the line.






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4. Exit the document display and line item report. Return to the costelement report.


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Solution 16: Purchasing External ActivitiesTask 1:1. Go back to session 1.

Switch session.

In Purchasing, you need to create a purchase order for vendor 1000.

Logistics → Materials Management → Purchasing → Purchase Order →Create → Automatically via Purchase Requisitions

Enter the following data on the initial screen:

Field Name ValuesPurchasing group 001Purchasing organization 1000Vendor 1000Per requisition indicator YesPurchase req The number you made a note of in step

1-1-6Do not change other fields.

a)



Choose Execute.

Choose Back twice.

a)



Refresh your data.




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Report → Refresh

a)





a)





Hint: Note that the value of the purchase requisition was reducedand replaced by the purchase order commitment.

The purchase requisition commitment and purchase ordercommitment can be displayed in different columns in cost reports.

a)

Hint: Note that the value of the purchase requisition wasreduced and replaced by the purchase order commitment.

The purchase requisition commitment and purchase ordercommitment can be displayed in different columns in costreports.

4. Make a note of the purchase order number:

________________________

a)


a)



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Switch session.



First, make the settings for the default values.





Choose Adopt.


a)

2. Enter your purchase order number in Goods Receipt Purchase Order.


Goods receipt Purch.order Purchase ordernumber (you made anote of in step 1-3-4)


a)

3. Post the goods receipt.Continued on next page


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Choose Post.



Choose Back.

a)



Refresh your data.


Report → Refresh

Hint: Note that the commitment value is reduced and that theactual costs for activity 1300 are shown.

Note: In the purchase order, you specify if the goods receipt isvaluated and gives rise to actual costs.

a)





a)

3. Place the cursor on the line in the line item report.




Position the cursor on the line.




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a)

4. Exit the document display and line item report. Return to the costelement report.

a) Choose Back several times.



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Exercise 17: Activity Confirmation

Exercise ObjectivesAfter completing this exercise, you will be able to:� Confirm activities in the turbine project T-100# using the structure

information system

Business ExampleIn this exercise, you will confirm more activities in your turbine projectT-100##. An effective option is to enter confirmations using the structureinformation system. You can use the refresh function to immediately view thedata (actual dates, actual costs) you entered. You need to display two structureoverviews (transaction codes CNS41 and CN41) to enter your confirmations.

Task 1:Go back to session 1.

Confirmation from Structure Information System (session 1).

1. Call up the structure overview for your project T-100##.


Information system → Structures → Structure Overview (Transaction codeCN41)

Enter PS Info Profile: YIDES_130000, if prompted.

On the selection screen that appears, enter the following data:

Field Name ValuesProject T-100##


Execute the report.

Choose Execute.

2. Expand the project.

Place the cursor on project definition T-100##.



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Choose Expand subtree.

3. Adapt the icon toolbar as required.

Choose additional functions.

Choose functions.

In the selection screen, you can move functions from the left to the rightusing the drag-and-drop technique and activate the functions in the icontoolbar.

Drag the following functions from the left to the right:

Object: Create, Change, Display

Verify: Individual confirmation, Collective confirmation

Copy the functions you selected.

Expand the functions in the selection screen.

Drag and drop the functions from the right.

Choose Copy.

Task 2:Use the Structure Information System to confirm activities.

1. Select all the objects.

Go to the collective confirmation transaction.

Choose Select all.

Choose Verify → Collective confirmation.

2. Set the final confirmation indicator for the following activities:

0100, 1000, 1200, 1300, 2000, 2100, and 2200.

Set the final confirmation indicator.


Choose Enter.

Hint: Note that planned data is defaulted for all activities thathave been processed. These activities are confirmed when yousave your data.



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3. Save the confirmation and return to the information system.

Choose Save.

4. Refresh the data in the information system.

Choose Deselect all.

Choose Refresh.

Hint: Note that the actual dates and actual costs for networkactivities have been updated by the confirmations. The changedvalues are highlighted in the report.

Actual costs are displayed in aggregated form for the WBSelements.

5. Return to the main SAP R/3 menu.

Choose Back twice.


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Solution 17: Activity ConfirmationTask 1:Go back to session 1.

Confirmation from Structure Information System (session 1).

1. Call up the structure overview for your project T-100##.


Information system → Structures → Structure Overview (Transaction codeCN41)

Enter PS Info Profile: YIDES_130000, if prompted.

On the selection screen that appears, enter the following data:

Field Name ValuesProject T-100##


Execute the report.

Choose Execute.

a)

2. Expand the project.

Place the cursor on project definition T-100##.

Choose Expand subtree.

a)

3. Adapt the icon toolbar as required.

Choose additional functions.

Choose functions.

In the selection screen, you can move functions from the left to the rightusing the drag-and-drop technique and activate the functions in the icontoolbar.

Drag the following functions from the left to the right:



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Object: Create, Change, Display

Verify: Individual confirmation, Collective confirmation

Copy the functions you selected.

Expand the functions in the selection screen.

Drag and drop the functions from the right.

Choose Copy.

a)

Task 2:Use the Structure Information System to confirm activities.



Choose Select all.

Choose Verify → Collective confirmation.

a)

2. Set the final confirmation indicator for the following activities:

0100, 1000, 1200, 1300, 2000, 2100, and 2200.



Choose Enter.

Hint: Note that planned data is defaulted for all activities thathave been processed. These activities are confirmed when yousave your data.

a)

3. Save the confirmation and return to the information system.

Choose Save.

a)

4. Refresh the data in the information system.



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Choose Refresh.

Hint: Note that the actual dates and actual costs for networkactivities have been updated by the confirmations. The changedvalues are highlighted in the report.

Actual costs are displayed in aggregated form for the WBSelements.

a)

5. Return to the main SAP R/3 menu.

Choose Back twice.

a)


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Exercise 18: Cross-Application Time Sheet(CATS)

Exercise ObjectivesAfter completing this exercise, you will be able to:� Use CATS to enter the work performed by persons in the system

Business ExampleYou use the Cross Application Time Sheet (CATS) to enter the work performedby persons in the system. This data can be written to various applicationcomponents, such as PS where it is used to confirm network activities and COwhere it is assigned to WBS elements as internal activity allocations.

Task:Using the CATS, enter time date for the person that your group uses (PPPP).

(PPPP is your course group�s number plus 1920).


Progress→ Confirmation→ Time Sheet → Time Data→ Enter


Field Name ValuesData entry profile 1304Key date TodayPersonnel number PPPP (1920 +##)

Press enter to display Key Date if it is not visible.

2. Branch to the data entry screen.

Choose Enter times.




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ReceiverWBSelement

Network Activity Yesterday To-day

Tomor-row

1st Ntwk forT-100## (*)

3000 4 4 7

Hint: Note (*):

You can use matchcodes to search for your networks using theassignment to project definition T-100##.

3. Confirm your entries.

Note that the system reads additional data such as cost center, activitytype, and attendance/absence type from the master data or profiles.

Choose Enter.

Go to the detail screen of the last hours entered.

Set the partial confirmation indicator.

Double-click the field.



4. Save the data you entered. Return to the main SAP menu.

Choose Save.

Choose Back.

Hint: Before you transfer data to the PS and HR applicationcomponents, you usually have to release the relevant data andget it authorized by a supervisor, but settings have been madein profile 1304 specifying that:

1. Data is released automatically when it is saved.2. Authorization by a supervisor is not required.

5. Transfer the data entered to the PS application components.




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Progress→ Confirmation→ Time sheet→ Transfer→ All components


Field Name ValuesPersonnel number The personnel number used by

your groupTarget components: Project System XTest run __ (deselect!!)


Choose Execute.

Hint: The system transfers the times for each day to PS in theform of confirmation documents. The confirmation documentcreates the activity allocation. The time data was transferred tothe HR application component when you saved the time sheet.


Choose Back three times.


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Solution 18: Cross-Application Time Sheet(CATS)Task:Using the CATS, enter time date for the person that your group uses (PPPP).

(PPPP is your course group�s number plus 1920).


Progress→ Confirmation→ Time Sheet → Time Data → Enter


Field Name ValuesData entry profile 1304Key date TodayPersonnel number PPPP (1920 +##)

Press enter to display Key Date if it is not visible.

a)

2. Branch to the data entry screen.

Choose Enter times.


ReceiverWBSelement

Network Activity Yesterday To-day

Tomor-row

1st Ntwk forT-100## (*)

3000 4 4 7

Hint: Note (*):

You can use matchcodes to search for your networks using theassignment to project definition T-100##.

a)



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3. Confirm your entries.

Note that the system reads additional data such as cost center, activitytype, and attendance/absence type from the master data or profiles.

Choose Enter.

Go to the detail screen of the last hours entered.


Double-click the field.



a)

4. Save the data you entered. Return to the main SAP menu.

Choose Save.

Choose Back.

Hint: Before you transfer data to the PS and HR applicationcomponents, you usually have to release the relevant data andget it authorized by a supervisor, but settings have been madein profile 1304 specifying that:

1. Data is released automatically when it is saved.2. Authorization by a supervisor is not required.

a)

5. Transfer the data entered to the PS application components.


Progress→ Confirmation→ Time sheet→ Transfer→ All components




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Field Name ValuesPersonnel number The personnel number used by

your groupTarget components: Project System XTest run __ (deselect!!)

a)


Choose Execute.

Hint: The system transfers the times for each day to PS in theform of confirmation documents. The confirmation documentcreates the activity allocation. The time data was transferred tothe HR application component when you saved the time sheet.



a)


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Exercise 19: Evaluation

Exercise ObjectivesAfter completing this exercise, you will be able to:� Evaluate your actual data in the cost element report

Business ExampleYou evaluate your actual data in the cost element report by switching to asession of the report and refreshing your data.

Task:Now evaluate your actual data in the cost element report (session 2).



Report → Refresh

2. Select the actual value for cost element 619000.

Display individual line items for the actual value.



3. Place the cursor on a line and go to the source document.

Place the cursor on a line.



Exit the line item report and the cost element report. Return to the mainSAP menu.




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Solution 19: EvaluationTask:Now evaluate your actual data in the cost element report (session 2).



Report → Refresh

a)

2. Select the actual value for cost element 619000.

Display individual line items for the actual value.



a)

3. Place the cursor on a line and go to the source document.

Place the cursor on a line.



Exit the line item report and the cost element report. Return to the mainSAP menu.



a)


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Lesson Summary

You should now be able to:� Describe the value flow associated with purchasing process for external

processing activities� Apply the method to enter confirmations using the structured

information system� Record a Cross Application Time Sheet (CATS) and the valid cost objects

for a CATS entry� Describe the role of reposting internal activity allocations


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Unit Summary PLM230

Unit SummaryYou should now be able to:� Describe the value flow associated with purchasing process for external

processing activities� Apply the method to enter confirmations using the structured

information system� Record a Cross Application Time Sheet (CATS) and the valid cost objects

for a CATS entry� Describe the role of reposting internal activity allocations


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Test Your Knowledge

1. For which component is the invoice receipt posted with reference to thepurchase?Choose the correct answer(s).□ A Price receipt□ B Order receipt□ C Available items receipt□ D Sold objects receipt

2. What is the role of the actual costing variant in activity confirmation?

3. When are transfers to Materials Management for external servicesnecessary?

4. What is the role of reposting line items in financial accountingdocuments?


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Answers

1. For which component is the invoice receipt posted with reference to thepurchase?

Answer: B

The invoice receipt is posted with reference to the purchase of orderreceipt.

2. What is the role of the actual costing variant in activity confirmation?

Answer: The actual costing variant is used to determine the valuationstrategy for activities and business processes.

3. When are transfers to Materials Management for external servicesnecessary?

Answer: Transfers to Materials Management for external services arenecessary when a contractor uses CATS to create a service entry sheet.

4. What is the role of reposting line items in financial accountingdocuments?

Answer: Reposting line items enables you to adjust posting errors ofcosts and revenues.


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Unit 7Actual Revenue

Unit OverviewThis unit explains different billing methods and how they are controlled inSD. The unit covers Milestone Billing, down payment requests and partialinvoices. Finally the unit explains resource-related billing using the DynamicItem Processor.


� Define a billing rule� Identify billing plan types� Describe the milestone billing process� Describe the down payment billing process� Explain the value flow associated with the billing process� Identify the use of the Dynamic Line Item Processor for resource-related

billing process� Identify the use of the DIP profile to control the resource-related billing

process

Unit ContentsLesson: Billing Methods and Controls.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .340Lesson: Milestone Billing .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .343

Exercise 20: Preparation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .351Exercise 21: Incoming Customer Sales Order .. . . . . . . . . . . . . . . . . . . . . . . . . . . .355Exercise 22: Billing Plan Maintenance ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .359Exercise 23: Milestone Billing and Down Payment Processing .. . . . . . . .365

Lesson: Resource-Related Billing .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .380Exercise 24: Creating Orders in Company Code 2000 ... . . . . . . . . . . . . . . . .385Exercise 25: Resource-related billing .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .391Exercise 26: Vendor Invoices for IDES AG ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . .397


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Unit 7: Actual Revenue PLM230

Lesson: Billing Methods and Controls

Lesson OverviewThe lesson explains how to define billing rules. The lesson also describes thevarious types of billing plans.


� Define a billing rule� Identify billing plan types

Business ExampleAs a project manager, you want to identify the factors that determine thebilling method. The billing method determines the form of the billing plan.

Control in SD

Figure 124: Billing: Control in SD


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PLM230 Lesson: Billing Methods and Controls

The item category controls if the item is relevant to billing and, if so, howbilling takes place:

� Using a billing plan� Resource related� Delivery related

The billing plan type determines the form of the billing plan (periodicor milestone billing). Periodic billing is often used in rental and serviceprocessing. The total value for each date is billed at the correct time. Plantengineering and construction projects usually use milestone billing. The totalamount to be billed is apportioned to individual dates in the billing plan.

The defined date categories perform a control function at billing date level.For example, date categories determine the billing rule used for settlementon a particular date, if the billing date is a fixed date, and if a billing lockwas set for this date.

You can define a billing rule for each billing plan date. This rule determineshow the billed amount is calculated. For example, you can specify that a fixedamount or a percentage of the total amount should be billed. You can alsospecify that the amount to be billed is a down payment, a partial invoice,or a final invoice.


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Lesson Summary

You should now be able to:� Define a billing rule� Identify billing plan types


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PLM230 Lesson: Milestone Billing

Lesson: Milestone Billing

Lesson OverviewThe lesson describes the milestone billing process and the down paymentbilling process. It also describes the value flow associated with the billingprocess.


� Describe the milestone billing process� Describe the down payment billing process� Explain the value flow associated with the billing process

Business ExampleYour company agrees to invoice a few customers based on the progress madein a project. As the project manager, you need to establish a milestone-billingplan to manage the billing process. You also need to process customer downpayments to include generating the payment request, payment processing,and payment clearing.


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Billing Plans

Figure 125: Billing Plan: Dates for Down Payment and Invoice

For example, a typical use for milestone billing is project billing such asin plant engineering and construction. This type of project often containsnumerous milestones that mark the completion of various project segments. Inthe SAP R/3, milestones are found in a network with actual and planned datafor the completion of project segments. Also, milestones are assigned to datesin the billing plan and retain a billing block until the milestones are confirmedas complete from the network (an actual date is set for this purpose).

The billing plan can contain invoice and down payment dates for downpayments that are agreed upon with the customer. The billing rule controlsthis procedure:

� Example: Billing rule 4: Down payment� Example: Billing rule 1: Partial invoice

Unlocked dates are billed in the billing plan for the corresponding duedates. A down payment request is created for down payment deadlines ora partial/final invoice for invoice dates (both of which are to be sent to thecustomer).

When you post the incoming payment for a down payment, you assign theposting to the down payment request. In the case of partial or final invoices,down payments are copied as down payments to be cleared.


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Figure 126: Confirming Milestones (1)

The starting point for milestone billing is a sales order item with a billing planwhose dates stem from milestones of the assigned project.

If you enter actual dates in the billing milestones (for example, by confirmingthe assigned activity), the billing lock imposed on the corresponding datein the billing plan is lifted.

In the turbine project, the lock on a down payment date (billing rule 4) is lifted.


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Figure 127: Billing Document and Down Payment Request

When you bill the down payment date, the system creates a down paymentrequest (document type FAZ).

In Financial Accounting, this down payment request represents a statisticalnoted item (not a G/L account posting).

This statistical noted item appears in payment reports as a result of acommitment item being assigned to the special G/L account.


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Figure 128: Customer Down Payments

The customer down payment is entered in Accounts Receivable.

The down payment posting references the down payment request. The downpayment is listed in the payment reports for the project through this reference.

Figure 129: Confirming Milestones (2)


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When you confirm activity 5000, an actual date for a further milestone isentered. The date is then unlocked in the billing plan of the sales order.

Down Payment Clearing

Figure 130: Partial Invoice: Clearing in Full

The billing program bills the unlocked second date of the billing plan.

A partial invoice is created using the billing document (controlled by billingrule 1).

The down payment is cleared to the partial invoice. In the invoice, the systemdefaults the down payments to be cleared in full. The down payment amountto be cleared can be reduced. When the invoices are printed, amounts thatare due and paid as down payments are displayed, which can be deductedfrom accounts payable.

The following postings are made in FI:

� Customer to revenues (to the amount of the invoice)� Down payment to customer (amount cleared in full or apportioned)


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Figure 131: Partial Invoice: Apportioned Clearing

You can change the amount of the down payment to be cleared (by changingthe amount for condition type AZWR in the pricing screen for the item) inpartial invoices.

The maximum amount that can be cleared is the amount received as a downpayment minus down payments that are already cleared.

The final invoice takes into account all down payments that are not yet cleared.


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Exercise 20: Preparation

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a new session

Business ExampleYou post actual revenues to the project using resource-related billing andmilestone billing.

You will perform milestone billing for the turbine sales order. This billingprocess results in a down payment request and partial invoices sent tothe customer. Down payment requests, down payments, and invoices areevaluated in the Payments Information System.

You will perform resource-related billing for engineering services that areprovided by the UK company code in support of the customer turbine project.To support this billing requirement, you will create a sales order to sell theseservices from company code 2000 to company code 1000.

In this exercise, you will confirm more activities in your turbine projectT-100##. An effective option is to enter confirmations using the structureinformation system. You can use the refresh function to immediately view thedata (actual dates, actual costs) you just entered. This course describes twostructure overviews (transaction codes CNS41 and CN41) that are used toenter confirmations.

Task:Preparatory steps � Structure information system in session 2:

1. If you have not already done so, create a second session (referred toas session 2 from hereon).


2. Branch to the conventional structure overview for project T-100##. To dothis, access transaction code CNS41 in session 2. Open the command fieldtop left in the icon bar. Enter /ncns41 in the command field. Press Enter.




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Field Name ValueProject T-100##

Leave other fields as they are.

4. Execute the report. Choose Execute. Remain in session 2 in the structureinformation system.


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Solution 20: PreparationTask:Preparatory steps � Structure information system in session 2:

1. If you have not already done so, create a second session (referred toas session 2 from hereon).


a)

2. Branch to the conventional structure overview for project T-100##. To dothis, access transaction code CNS41 in session 2. Open the command fieldtop left in the icon bar. Enter /ncns41 in the command field. Press Enter.

a)


Field Name ValueProject T-100##

Leave other fields as they are.

a)

4. Execute the report. Choose Execute. Remain in session 2 in the structureinformation system.

a)


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Exercise 21: Incoming Customer SalesOrder

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create a sales order for the customer turbine project

Business ExampleThe customer has accepted your quotation for the turbine project.

You will create a sales order in the system and assign it to the project.

You have already released the project, which enables you to enter actual dataas the project is executed.

Task:Go back to session 1.

Create a sales order for the turbine in Sales and Distribution.

Logistics→ Sales and Distribution→ Sales→ Order → Create


Field Name ValuesOrder type PS1 (PS: order)Sales organization 1000Distribution channel 10Division 00

Create a sales order referencing your quotation.

(See the exercise for sales pricing).

Choose Create with Reference.

Enter the following data on the quotation selection screen:



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Search for your quotation using the account assignment to your project:

Choose Search.

Use the second sales document in the list.

Copy the quotation to the sales order.

Place the cursor on the SECOND line in the list.

Choose Confirm.

Choose Copy.

Choose Complete delivery if required.

Enter a purchase order number for the sales order.

Field Name ValuesPurch. order no. GR##

Choose Enter (several times if necessary).

2. Save the document.


Choose Save.

Choose Back.

If a dialog box appears, click No.

Choose Back.


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Solution 21: Incoming Customer SalesOrderTask:Go back to session 1.

Create a sales order for the turbine in Sales and Distribution.

Logistics→ Sales and Distribution→ Sales→ Order → Create



Create a sales order referencing your quotation.

(See the exercise for sales pricing).

Choose Create with Reference.

Enter the following data on the quotation selection screen:


Search for your quotation using the account assignment to your project:

Choose Search.

Use the second sales document in the list.

Copy the quotation to the sales order.

Place the cursor on the SECOND line in the list.

Choose Confirm.

Choose Copy.

Choose Complete delivery if required.



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Enter a purchase order number for the sales order.

Field Name ValuesPurch. order no. GR##

Choose Enter (several times if necessary).

a)



Choose Save.

Choose Back.

If a dialog box appears, click No.

Choose Back.

a)


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Exercise 22: Billing Plan Maintenance

Exercise ObjectivesAfter completing this exercise, you will be able to:� Replace a WBS billing plan with a billing plan for the sales order item.

Business ExampleYou have already created a sales order for your turbine project. You have alsoplanned revenues using a billing plan for the WBS element you created usingthe sales pricing function. You need to replace the WBS billing plan with abilling plan for the sales order item.

Task 1:Billing plan for the WBS element.


In the structure information system, the Project revenue plan column containsthe values of the billing plan for the WBS element. You created this billingplan during sales pricing.

1. Change the top WBS element T-100## from the information system.


Select WBS element T-100##.

Choose Change object.


Choose Details → Billing plan

2. Delete the billing plan for the WBS element.

Reason: you want to perform revenue planning using the sales orderitem.

Choose Delete billing plan.

Choose Yes in the dialog box.

Save your changes.

Choose Save.



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Refresh your data in the information system.

Note that your project revenue plan has disappeared.

Choose Refresh.

Task 2:Billing plan for the sales order:

1. Change the sales order item of your sales order from the informationsystem.

Tip: First sales document item below the level 1 WBS element.


Select sales document item #### / 000010.


Go to the billing plan for item 10.


Select the Billing plan tab.

Copy the dates of your billing milestones as dates in your billing plan.

Choose Milestones.

Choose Continue.

Choose Select all.

Choose Copy.


Your billing plan contains three dates:

The first date is a down payment date (billing rule 4). When you bill thisdate, a down payment request is sent to the customer. The date is alreadyunlocked (as a result of the assigned activity being confirmed).

Dates 2 and 3 are for the partial invoice and the final invoice.

After the equipment is assembled in the plant and the test run iscomplete, the customer is invoiced for 40% of the net value. Theremaining 60% is invoiced after the equipment is installed on site.



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2. Return from the billing plan to the item overview of the sales order. Saveyour changes.

Choose Back.

Choose Save.

3. Refresh your data in the information system.

Note the new Project revenue plan value for the level 1 WBS element.

Choose Refresh.

Remain in session 2 in the information system.


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Solution 22: Billing Plan MaintenanceTask 1:Billing plan for the WBS element.


In the structure information system, the Project revenue plan column containsthe values of the billing plan for the WBS element. You created this billingplan during sales pricing.

1. Change the top WBS element T-100## from the information system.


Select WBS element T-100##.



Choose Details → Billing plan

a)

2. Delete the billing plan for the WBS element.

Reason: you want to perform revenue planning using the sales orderitem.

Choose Delete billing plan.


Save your changes.

Choose Save.

Refresh your data in the information system.

Note that your project revenue plan has disappeared.

Choose Refresh.

a)



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Task 2:Billing plan for the sales order:

1. Change the sales order item of your sales order from the informationsystem.

Tip: First sales document item below the level 1 WBS element.


Select sales document item #### / 000010.


Go to the billing plan for item 10.


Select the Billing plan tab.

Copy the dates of your billing milestones as dates in your billing plan.

Choose Milestones.

Choose Continue.

Choose Select all.

Choose Copy.


Your billing plan contains three dates:

The first date is a down payment date (billing rule 4). When you bill thisdate, a down payment request is sent to the customer. The date is alreadyunlocked (as a result of the assigned activity being confirmed).

Dates 2 and 3 are for the partial invoice and the final invoice.

After the equipment is assembled in the plant and the test run iscomplete, the customer is invoiced for 40% of the net value. Theremaining 60% is invoiced after the equipment is installed on site.

a)

2. Return from the billing plan to the item overview of the sales order. Saveyour changes.

Choose Back.



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Choose Save.

a)

3. Refresh your data in the information system.

Note the new Project revenue plan value for the level 1 WBS element.

Choose Refresh.


a)


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Exercise 23: Milestone Billing and DownPayment Processing

Exercise ObjectivesAfter completing this exercise, you will be able to:� Perform milestone billing and down payment processing

Business ExampleYou will confirm activities in the turbine project. When you do this, the billingmilestones assigned to activities are activated. This unlocks the dates in thebilling plan of the sales order.

The billing program processes all the unlocked dates in the sales order. Downpayment requests are generated for down payment dates and invoices aregenerated for billing dates. Invoices appear as actual revenues in the assignedbilling element. You can view down payments and invoices in the paymentreport.

Task 1:Return to session 1. Billing document and down payment request.

At this point, you have confirmed actual dates for the first billing milestonein your project. This unlocks the billing date for the down payment request.You will process the down payment request and payment for your sales order(turbine system).

Logistics→ Sales and Distribution→ Billing→ Billing Document→ Create

1. In the entry screen, use the following data:

Field Name ValueDocument Your first sales order (assigned to

WBS element T-100##)Do not modify other fields.

You can find the order number in the information system.

You can perform billing for a large number of sales documents using themass processing transaction Process billing due list.



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Execute the report.

Choose Execute.

In the billing document item overview, the screen title indicates that thisis not an invoice but a down payment request (document type FAZ).

2. Record the amount of the down payment.

Select the line item.

Click the item pricing condition icon at the bottom of the screen.

Record the total billing amount (down payment plus tax).

Billing Amount _________________________________


Choose Save.

Task 2:Evaluation in the payments information system:

Check the result in the payments information system using the paymentoverview report Receipts.

1. Create a third session (referred to as session 3).


2. In session 3, invoke the payment report Receipts.

Project System menu

Information System→ Financials→ Payments → Receipts

Select your project T-100## and execute the report.

Field Name ValueProject T-100##Output Type Classic drilldown report

Delete any Sales document or Network/Ordervalues that appear on the screen. Leave all otherfields as they are.

Choose Execute.



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The line DR down payment request of the report displays requests to thecustomer that are posted through the billing document.


Task 3:Down payment (session 1).

Enter the amount for the customer down payment in the R/3 system.

Accounting → Financial Accounting → Accounts Receivable → Document Entry→ Down Payment

When working on exercise 5-10-2, participant groups will block each otherbecause all payments are for the same customer account number. For thisreason, each group should complete the exercise as quickly as possible.


Field Name ValueDocument date Today�s datePosting date Today�s dateType DZCompany code 1000Currency/rate UNICustomer account no. 1600Special G/L indicator ABank account no. 113100Amount Enter amount from 3-1-2

2. Reference the document to the down payment request.

Choose Requests.

Note: If you press Enter first, enter the required date field valueon the screen and then choose Document Overview. ChooseRequests

In the down payment request selection screen, select the request with thenumber belonging to your project T-100##.



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Create the down payment and post the document.

Select the correct down payment request (by clicking the box to the leftof the line).

Choose Create down payments.


Choose Post.

Note: You may need to clear the document before posting.

To determine if this is required, note the gross credit amount:

(Amount to the right of and below "CR":

Amount: ___________________

Double-click debit item 0001 to open its detail screen.

Double-click line 001.

Enter the same amount in the Amount field.

Post the document.

Choose Post.

When a down payment is entered, there is usually a document containingthe gross amount.

Task 4:Evaluation in the Payments Information System (session 3):

1. Go to session 3.

Switch session.

2. Exit from the payment report and invoke it again.

Choose Cancel.

Click Yes in the dialog box.

Double-click Receipts.

Choose Execute.

Note that the amount in the line DR down payment request is replacedwith DR down payments.



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Task 5:Confirming more activities (session 2):

Use the structure information system to confirm further activities.

1. Go to session 2.

Switch session.



Choose Select all.

Extras/environment→ Confirm→ Collective confirmation

Set the final confirmation indicator for activities 3000 to 5000 (but not5100).

Set the final confirmation indicator for activities 3000 to 5000.


Choose Enter.

3. Save the confirmation, and go back to the information system.

Choose Save.

Task 6:Partial billing and down payment clearing (session 1):

When you confirmed activity 5000, the billing milestone assigned to theactivity was activated and the assigned Partial billing date was unlocked inthe billing plan for the SD document. The system uses billing to generate apartial invoice to be sent to the customer. Customer down payments can becleared in the process.

Go to session 1.

1. Bill your sales order (turbine system).


2. On the entry screen, use the following data:



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Field Name ValueDocument Your first sales order (assigned to WBS

element T-100##)Leave other fields as they are

Execute the report.

Choose Execute.

In the billing document item overview, you can see that:

An invoice has been created.

Two items exist: one for the partial invoice (item 10) and one to clear thedown payment (item 11).

You can reduce the amount to be cleared manually using the pricingdetails for the second item.

3. Now save the document.

Choose Save.


1. Go to session 3.

Switch session.


Choose Cancel.



Choose Execute.

Note that the down payment amount has been reduced to zero and isnow displayed in the line Payment on the debit side. The remainingamount is displayed as a payment obligation arising from the invoice.



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Task 8:Evaluation in the structure information system (session 2):

1. Go to session 2.

Switch session.

2. Refresh your data.

Choose Refresh.

Hint: Note that additional actual revenues are displayed in thelevel 1 WBS element.


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Solution 23: Milestone Billing and DownPayment ProcessingTask 1:Return to session 1. Billing document and down payment request.

At this point, you have confirmed actual dates for the first billing milestonein your project. This unlocks the billing date for the down payment request.You will process the down payment request and payment for your sales order(turbine system).


1. In the entry screen, use the following data:

Field Name ValueDocument Your first sales order (assigned to

WBS element T-100##)Do not modify other fields.

You can find the order number in the information system.

You can perform billing for a large number of sales documents using themass processing transaction Process billing due list.

Execute the report.

Choose Execute.

In the billing document item overview, the screen title indicates that thisis not an invoice but a down payment request (document type FAZ).

a)

2. Record the amount of the down payment.

Select the line item.

Click the item pricing condition icon at the bottom of the screen.

Record the total billing amount (down payment plus tax).

Billing Amount _________________________________

a)



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Choose Save.

a)

Task 2:Evaluation in the payments information system:

Check the result in the payments information system using the paymentoverview report Receipts.

1. Create a third session (referred to as session 3).


a)

2. In session 3, invoke the payment report Receipts.

Project System menu

Information System→ Financials→ Payments → Receipts

Select your project T-100## and execute the report.

Field Name ValueProject T-100##Output Type Classic drilldown report

Delete any Sales document or Network/Ordervalues that appear on the screen. Leave all otherfields as they are.

Choose Execute.

The line DR down payment request of the report displays requests to thecustomer that are posted through the billing document.


a)



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Task 3:Down payment (session 1).

Enter the amount for the customer down payment in the R/3 system.

Accounting → Financial Accounting→ Accounts Receivable→ Document Entry→ Down Payment

When working on exercise 5-10-2, participant groups will block each otherbecause all payments are for the same customer account number. For thisreason, each group should complete the exercise as quickly as possible.


Field Name ValueDocument date Today�s datePosting date Today�s dateType DZCompany code 1000Currency/rate UNICustomer account no. 1600Special G/L indicator ABank account no. 113100Amount Enter amount from 3-1-2

a)

2. Reference the document to the down payment request.

Choose Requests.

Note: If you press Enter first, enter the required date field valueon the screen and then choose Document Overview. ChooseRequests

In the down payment request selection screen, select the request with thenumber belonging to your project T-100##.

Create the down payment and post the document.



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Select the correct down payment request (by clicking the box to the leftof the line).

Choose Create down payments.


Choose Post.

Note: You may need to clear the document before posting.

To determine if this is required, note the gross credit amount:

(Amount to the right of and below "CR":

Amount: ___________________

Double-click debit item 0001 to open its detail screen.

Double-click line 001.

Enter the same amount in the Amount field.

Post the document.

Choose Post.

When a down payment is entered, there is usually a document containingthe gross amount.

a)


1. Go to session 3.

Switch session.

a)


Choose Cancel.

Click Yes in the dialog box.


Choose Execute.



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Note that the amount in the line DR down payment request is replacedwith DR down payments.

a)

Task 5:Confirming more activities (session 2):

Use the structure information system to confirm further activities.

1. Go to session 2.

Switch session.

a)



Choose Select all.

Extras/environment→ Confirm→ Collective confirmation

Set the final confirmation indicator for activities 3000 to 5000 (but not5100).

Set the final confirmation indicator for activities 3000 to 5000.


Choose Enter.

a)

3. Save the confirmation, and go back to the information system.

Choose Save.

a)



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Task 6:Partial billing and down payment clearing (session 1):

When you confirmed activity 5000, the billing milestone assigned to theactivity was activated and the assigned Partial billing date was unlocked inthe billing plan for the SD document. The system uses billing to generate apartial invoice to be sent to the customer. Customer down payments can becleared in the process.

Go to session 1.

1. Bill your sales order (turbine system).


a)

2. On the entry screen, use the following data:

Field Name ValueDocument Your first sales order (assigned to WBS

element T-100##)Leave other fields as they are

Execute the report.

Choose Execute.

In the billing document item overview, you can see that:

An invoice has been created.

Two items exist: one for the partial invoice (item 10) and one to clear thedown payment (item 11).

You can reduce the amount to be cleared manually using the pricingdetails for the second item.

a)

3. Now save the document.

Choose Save.

a)



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1. Go to session 3.

Switch session.

a)


Choose Cancel.



Choose Execute.

Note that the down payment amount has been reduced to zero and isnow displayed in the line Payment on the debit side. The remainingamount is displayed as a payment obligation arising from the invoice.

a)

Task 8:Evaluation in the structure information system (session 2):

1. Go to session 2.

Switch session.

a)

2. Refresh your data.

Choose Refresh.

Hint: Note that additional actual revenues are displayed in thelevel 1 WBS element.

a)


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Lesson Summary

You should now be able to:� Describe the milestone billing process� Describe the down payment billing process� Explain the value flow associated with the billing process


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Lesson: Resource-Related Billing

Lesson OverviewThe lesson explains how to use the Dynamic Line Item Processor tool forresource-related billing. The lesson also explains how to use DIP profile tocontrol the resource-related billing process.


� Identify the use of the Dynamic Line Item Processor for resource-relatedbilling process

� Identify the use of the DIP profile to control the resource-related billingprocess

Business ExampleTo support your project, you receive engineering services from a subsidiarycompany and agree to pay for their services using resource-related billing.You will create an intercompany sales order and use the Dynamic ItemsProcessor tool to perform this billing requirement.


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PLM230 Lesson: Resource-Related Billing

Views in Dynamic Line Item Processor

Figure 132: Views in the Dynamic Line Item Processor

The resource-related billing transaction contains the following views:

� Expenditure view:

This is an internal view that is used to dynamically processresource-related billing. In this view, actual costs or posted statisticalkey figures of the project are structured hierarchically on the basis ofcharacteristics. You can make changes interactively at any hierarchylevel. These changes influence billing (for example, value changes, fixedprices, and overheads for individual items) (for example, lock individualsubtrees which are not billed until later on or are not billed at all).

� Sales price view:

This is the external view of the billing request. You can make changesin this view too (for example, change conditions for individual items ofthe billing request).


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Dynamic Line Item Processor

Figure 133: Dynamic Line Item Processor: Conversion

The actual values of the project are converted to material masters for SDfollow-up documents.

Conversion is performed using characteristics (for example, cost element) andcharacteristics values (for example, cost elements 400000 ... 410000), which arecombined to form sets (for example, cost element group CO-PC-MAT).


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Figure 134: Dynamic Item Processor: Control

Dynamic item processor (DIP) profiles are used in PS for sales pricing andresource-related billing.


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Examples of controlling characteristics:

� The Characteristic relevant indicator is set for the Cost element characteristic.

Description: A dynamic item is created on the basis of sales price for eachcost element (planned or actual costs).

� The Material determination indicator is set for the Cost elementcharacteristic.

Description: The cost element is made available as a characteristic formaterial determination using sets. If this indicator is set, you can enteronly a set for the characteristic in the tableMaterial determination .

� TheNo summarization indicator is not set for the Cost element characteristic.

Description: Several dynamic items with the same material number andcost element in the sales price basis lead to item in the sales document.

� The Structuring indicator is set for the Cost element characteristic. Theset name OAS is preset with levels from 2 to 2.

Description: Dynamic items are structured hierarchically using the costelement group OAS, (using the cost element intervals or groups createdunder OAS at level 2).

Note: Note on material determination: The system can use the originof material costs directly for material costs. The Origin indicator(costing screen) should be set in the material master of the materialthat gives rise to material costs. The characteristicMaterial should alsobe relevant to create dynamic items.


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Exercise 24: Creating Orders in CompanyCode 2000

Exercise ObjectivesAfter completing this exercise, you will be able to:� Create sales orders in company code 2000 (UK)

Business ExampleSeveral companies within a corporate group are responsible for executingyour project. In the WBS structure, WBS elements are assigned to variouscompany codes.

Rotor assemblies are designed and constructed by a subsidiary in GreatBritain (IDES UK, company code 2000). All other activities are performed bythe consolidation parent (IDES AG, company code 1000).

In the turbine project, theWBS element T-100##-1-2 is assigned to the companycode 2000. Assigned activities are processed in the work centers of plant 2000.

Company code 2000 sells its services to company code 1000. You create asales order for this purpose and assign the document to the WBS elementT-100##.1.2.

Task:Create sales order.

1. Return to session 1 from session 2.


2. Create a sales order in SD.

Logistics→ Sales and Distribution→ Sales→ Order→ Create




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Choose Enter.

4. Enter the following data in the overview screen:

Field Name ValuesSold-to party 10000Purch. order no. GR##Req. deliv. date Today in 2 month�s timeOrder reason Credit memo procedureMaterial S-1300Order quantity 1Name Engineering of gearing T-100##

Confirm your entries and messages that appear.

Choose Enter (several times).

5. Navigate to the detail screen of the item by double-clicking the itemnumber.

Select the appropriate tab to navigate to the Account assignment screen.



In the account assignment screen, enter the WBS element of the companycode 2000 (IDES UK).

Field Name ValuesWBS element T-100##.1.2

6. Select the appropriate tab to navigate to the Conditions screen.



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Select the Conditions tab.

Enter sales price as 15000 pounds sterling for engineering services.

CnTy Amount CurrencyPR00 15000 GBP


Enter a profile for resource-related billing in the detail screen:




Note the document number and return to the main SAP menu.

Choose Save.

Choose Back.

Click No in the dialog box that appears.

9. Return to session 2 (structure information system).

Refresh the data in the information system.

Note the sales order assigned to the WBS element T-100##.1.2 and thechange in the revenue plan of the project.


Choose Refresh.



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Solution 24: Creating Orders in CompanyCode 2000Task:Create sales order.

1. Return to session 1 from session 2.


a)

2. Create a sales order in SD.

Logistics → Sales and Distribution→ Sales→ Order→ Create

a)



Choose Enter.

a)

4. Enter the following data in the overview screen:

Field Name ValuesSold-to party 10000Purch. order no. GR##Req. deliv. date Today in 2 month�s timeOrder reason Credit memo procedure



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Material S-1300Order quantity 1Name Engineering of gearing T-100##

Confirm your entries and messages that appear.

Choose Enter (several times).

a)

5. Navigate to the detail screen of the item by double-clicking the itemnumber.

Select the appropriate tab to navigate to the Account assignment screen.



In the account assignment screen, enter the WBS element of the companycode 2000 (IDES UK).

Field Name ValuesWBS element T-100##.1.2

a)

6. Select the appropriate tab to navigate to the Conditions screen.

Select the Conditions tab.

Enter sales price as 15000 pounds sterling for engineering services.

CnTy Amount CurrencyPR00 15000 GBP

a)


Enter a profile for resource-related billing in the detail screen:




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a)


Note the document number and return to the main SAP menu.

Choose Save.

Choose Back.

Click No in the dialog box that appears.

a)

9. Return to session 2 (structure information system).

Refresh the data in the information system.

Note the sales order assigned to the WBS element T-100##.1.2 and thechange in the revenue plan of the project.


Choose Refresh.


a)


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Exercise 25: Resource-related billing

Exercise ObjectivesAfter completing this exercise, you will be able to:� Perform resource-related billing and internal allocation

Business ExampleCompany code 2000 (IDES UK) designs and constructs the rotor assembliesof turbines.

You confirm activities, material consumption, and other costs incurredfor IDES UK, which are billed to IDES AG (company code 1000) on aresource-related basis.

Task 1:Confirming engineering services performed by IDES UK:

1. Use the Structure Information System to confirm activities.

Select the following activities:

1110, 1111, 1112, 1113, 1120, 1130, and 1140.

Choose Deselect All.

Select activities 1110 through to 1140.

Navigate to the collective confirmation transaction for the selectedactivities.

Extras/Environment→ Confirm→ Collective Confirmation

2. Set the final confirmation indicator for all activities.


Save the confirmation and return to the information system.

Choose Save.

Task 2:Resource-related billing.

1. Return to session 1.



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2. Enter a billing request using resource-related billing.

Logistics→ Sales and Distribution→ Sales→ Order→ Subsequent Functions→ Resource-Related Billing Document


Field Name ValuesSales document Your second sales order (if required, you can

use matchcodes to search for the sales orderor look in the information system)Do not modify other fields.

3. Navigate to the sales price view.

Choose Sales price.

Expand the billing request structure.

Choose Expand all nodes. You can now see the structure of the SD billingrequest (comprising header, item, and subitem). In the lower part of thescreen, there is a condition schema that enables you to change conditions.

By double-clicking the individual levels of the structure, you can transferthem to the condition schema and make changes.


Double-click the top line in the structure (PS: billing request).

Enter the surcharge as 10% (condition HA00) in the lower part of thescreen.


CnTy AmountHA00 10 (%)

Choose Enter.

5. Note the final amount and currency of the billing request:

Final amount: ___________________ Currency __________

6. Save your billing request.Continued on next page


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Make a note of the document number: _____________________

Choose Save Billing Request.

Note: Not simply Save.



Choose Back.

7. Create a billing document for your billing request.

Logistics→ Sales and Distribution→ Billing→ Billing document→ Create

In the selection screen, enter the document number of the billing request.Save the billing document.

Choose Save.

8. Switch to session 2 in the structure information system.


Refresh your data.

Note the actual revenues shown in WBS element T-100##.1.2.

Choose Refresh.



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Solution 25: Resource-related billingTask 1:Confirming engineering services performed by IDES UK:

1. Use the Structure Information System to confirm activities.

Select the following activities:

1110, 1111, 1112, 1113, 1120, 1130, and 1140.

Choose Deselect All.

Select activities 1110 through to 1140.

Navigate to the collective confirmation transaction for the selectedactivities.

Extras/Environment→ Confirm→ Collective Confirmation

a)

2. Set the final confirmation indicator for all activities.


Save the confirmation and return to the information system.

Choose Save.

a)

Task 2:Resource-related billing.

1. Return to session 1.


a)

2. Enter a billing request using resource-related billing.

Logistics→ Sales and Distribution→ Sales→ Order→ Subsequent Functions→ Resource-Related Billing Document




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Field Name ValuesSales document Your second sales order (if required, you can

use matchcodes to search for the sales orderor look in the information system)Do not modify other fields.

a)

3. Navigate to the sales price view.

Choose Sales price.

Expand the billing request structure.

Choose Expand all nodes. You can now see the structure of the SD billingrequest (comprising header, item, and subitem). In the lower part of thescreen, there is a condition schema that enables you to change conditions.

By double-clicking the individual levels of the structure, you can transferthem to the condition schema and make changes.

a)


Double-click the top line in the structure (PS: billing request).

Enter the surcharge as 10% (condition HA00) in the lower part of thescreen.


CnTy AmountHA00 10 (%)

Choose Enter.

a)

5. Note the final amount and currency of the billing request:

Final amount: ___________________ Currency __________

a)

6. Save your billing request.



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Make a note of the document number: _____________________

Choose Save Billing Request.

Note: Not simply Save.



Choose Back.

a)

7. Create a billing document for your billing request.

Logistics→ Sales and Distribution→ Billing→ Billing document→ Create

In the selection screen, enter the document number of the billing request.Save the billing document.

Choose Save.

a)



Refresh your data.

Note the actual revenues shown in WBS element T-100##.1.2.

Choose Refresh.


a)


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Exercise 26: Vendor Invoices for IDES AG

Exercise ObjectivesAfter completing this exercise, you will be able to:� Handle vendor invoices

Business ExampleServices are billed by IDES UK (company code 2000) and the invoice is sentto IDES AG (company code 1000). This invoice is entered in the system byIDES AG employees.

Task:Invoice receipt:



1. Enter a customer invoice (FI) in company code 1000.

Accounting→ Financial Accounting→ Accounts Payable→ Document entry→ Invoice


Field ValueVendor 4444Invoice date Today�s dateAmount and currency Final amount and currency of the billing

document you made a note of in step4-3-5

Calculate tax indicator NoTax code V0 (No tax)G/L account 415000



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Amount in Doc. Curr. Final amount of the billing documentyou made a note of in step 4-3-5

Tax code V0WBS element T-100##.1.1

3. Post your data.

Go back to the main SAP menu.

Choose Post.

Choose Exit.



Refresh your data.

Choose Refresh.

Note the additional costs from external procurement (cost element415000) shown in activity 1100.


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Solution 26: Vendor Invoices for IDES AGTask:Invoice receipt:



1. Enter a customer invoice (FI) in company code 1000.

Accounting→ Financial Accounting→ Accounts Payable→ Document entry→ Invoice

a)


Field ValueVendor 4444Invoice date Today�s dateAmount and currency Final amount and currency of the billing

document you made a note of in step4-3-5

Calculate tax indicator NoTax code V0 (No tax)G/L account 415000Amount in Doc. Curr. Final amount of the billing document

you made a note of in step 4-3-5Tax code V0WBS element T-100##.1.1

a)

3. Post your data.

Go back to the main SAP menu.

Choose Post.



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Choose Exit.

a)



Refresh your data.

Choose Refresh.

Note the additional costs from external procurement (cost element415000) shown in activity 1100.

a)


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Lesson Summary

You should now be able to:� Identify the use of the Dynamic Line Item Processor for resource-related


process


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Unit Summary PLM230

Unit SummaryYou should now be able to:� Define a billing rule� Identify billing plan types� Describe the milestone billing process� Describe the down payment billing process� Explain the value flow associated with the billing process� Identify the use of the Dynamic Line Item Processor for resource-related


process


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Test Your Knowledge

1. A billing rule cannot specify whether the amount to be billed is a downpayment, a partial invoice, or a final invoice.Determine whether this statement is true or false.□ True□ False

2. Plant engineering and construction projects usually use periodic billing.Determine whether this statement is true or false.□ True□ False

3. If actual dates are entered in billing milestones, the billing lock imposedon the corresponding date in the billing plan is lifted.Determine whether this statement is true or false.□ True□ False

4. The billing plan cannot contain invoice and down payment dates agreedupon with the customer.Determine whether this statement is true or false.□ True□ False

5. The amount of the down payment to be cleared can be changed in thepartial invoice.Determine whether this statement is true or false.□ True□ False

6. In the expenditure view, actual costs or posted statistical key figures ofthe project are structured hierarchically on the basis of characteristics.Determine whether this statement is true or false.□ True□ False


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7. The Origin indicator should be set in the material master of the materialthat gives rise to material costs.Determine whether this statement is true or false.□ True□ False


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Answers

1. A billing rule cannot specify whether the amount to be billed is a downpayment, a partial invoice, or a final invoice.

Answer: False

A billing rule can specify if the amount to be billed is a down payment, apartial invoice, or a final invoice.

2. Plant engineering and construction projects usually use periodic billing.

Answer: False

Plant engineering and construction projects usually use milestone billing.

3. If actual dates are entered in billing milestones, the billing lock imposedon the corresponding date in the billing plan is lifted.

Answer: True

If actual dates are entered in billing milestones, the billing lock imposedon the corresponding date in the billing plan is lifted.

4. The billing plan cannot contain invoice and down payment dates agreedupon with the customer.

Answer: False

The billing plan can contain invoice and down payment dates that areagreed upon with the customer.

5. The amount of the down payment to be cleared can be changed in thepartial invoice.

Answer: True

The amount of the down payment to be cleared can be changed in thepartial invoice.


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6. In the expenditure view, actual costs or posted statistical key figures ofthe project are structured hierarchically on the basis of characteristics.

Answer: True

In the expenditure view, actual costs or posted statistical key figures ofthe project are structured hierarchically on the basis of characteristics.

7. The Origin indicator should be set in the material master of the materialthat gives rise to material costs.

Answer: True

The Origin indicator should be set in the material master of the materialthat gives rise to material costs.


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Unit 8Period-End Closing

Unit OverviewThis unit covers different period-end closing procedures, as for exampletemplate allocation, actual overhead allocation and project interest calculation.It explains also the cost forecast concept and the progress analysis for projects.This unit discusses results analysis in detail and covers the Incoming OrderAnalysis. Finally the unit explains the project settlement and how to use theschedule manager for planning and executing period-end closing tasks.


� Understand the concepts of period end closing� Describe the process of overhead calculation� Understand the role of interest calculation in project cost� Understand the process of cost forecast in project accounting� Understand the process of progress analysis in project accounting� Understand the concepts of results analysis� Identify the different customization that can be performed in results

analysis� Identify the different techniques of result analysis� Maintain incoming orders� Evaluate incoming orders� Explain the term settlements� Define settlement rules� Describe settlement structures� Identify tasks that can be created using the schedule manager� Schedule an object list using the schedule manager


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Unit 8: Period-End Closing PLM230

Unit ContentsLesson: Procedures for Period End Closing ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .409

Exercise 27: Preparation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .415Exercise 28: Overhead .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .421

Lesson: Project Interest Calculation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .429Exercise 29: Interest Calculation .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .435

Lesson: Cost Forecast and Progress Analysis ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .442Exercise 30: Cost Forecast .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .451

Lesson: Results Analysis ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .462Exercise 31: Results Analysis .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .485

Lesson: Incoming Order Analysis .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .492Exercise 32: Incoming Orders .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .497

Lesson: Project Settlement .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .504Exercise 33: Generating settlement rules .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .517Exercise 34: Settlement .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .521

Lesson: Schedule Manager ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .526


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PLM230 Lesson: Procedures for Period End Closing

Lesson: Procedures for Period End Closing

Lesson OverviewThis lesson describes the role of period-end closing in project costs. It explainsthe process of overhead calculation. It also explains how to revaluate allocatedactivity types business processes at actual prices.


� Understand the concepts of period end closing� Describe the process of overhead calculation

Business ExampleYou are responsible for ensuring that your projects are fully allocated theappropriate period-end cost allocations. You also need to prepare variousfinancial analyses for your project. To complete these activities, you need toevaluate the period-end processes that should occur for the customer project.


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Introducing Period-End Closing

Figure 135: Period-End Closing: Procedures

Period-end closing is a framework that is used to perform period-relatedcommercial transactions. It is also used to ensure that all the data belonging toa period is determined and available for purposes of enterprise control.

Period-end closing procedures are performed in the background, usually onceeach period. Procedures are generally performed for the previous monthat the beginning of the next month.

As of Release 4.6, you can use the Schedule Manager to help performperiod-end closing.

The Schedule Manager supports workflows for FI, CO, PS, and so on.


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Template Allocation

Figure 136: Actual Template Allocation

Process costs are calculated based on the template selected for the project.Templates are created in Customizing.

The template is determined by the controlling area, costing sheet, overheadkey, and template environment for the function.

Template environment 004 is used for networks. Template 005 is used forWBS elements.

The costing sheet and overhead key values are defined in the control orassignments tabbed pages of the WBS Elements, Network Header, or NetworkActivities.

After a template is selected, the calculation program determines:

� Each process in the template that applies to the project.� How much of each process (in the template that applies to the project)

was consumed by the project.� If the calculated value should be added to the project cost at the start,

end, or continuously throughout the project.


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Revaluation at Actual Prices

Figure 137: Revaluation at Actual Prices (1)

You can determine the actual prices for activity types and business processesat the end of the period. The actual prices are the actual costs divided by thequantities consumed.

You control if revaluation at actual prices is possible in Customizing in theparameters for the actual version that depend on the fiscal year. You alsospecify if revaluation at actual prices takes place separately for each activitytype.

You calculate actual prices in Overhead Cost Controlling.

Revaluation at actual prices is performed in the period-end closing process forthe project. Cost objects are charged with the difference between the actualprice and the price originally allocated during activity allocation.


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You can revaluate activities and business processes at actual prices in thefollowing components:

� In the Project System (projects, WBS elements, networks, and networkoperations).

� In Cost Object Controlling, for all cost objects (product cost collectors,production orders and process orders if they are being used as costobjects, sales order items, internal orders, cost object hierarchies, andgeneral cost objects).

Figure 138: Revaluation at Actual Prices (2)

In this diagram, the planned cost center price differs from the actual price.The planned price is 10.00 per hour. However, only nine hours were allocatedinstead of the 10 that were planned in the planned activity cost. As a result, atthe planned price, 90.00 is allocated to the network activity.

At the end of the period, the total activity-related cost at the cost center isdetermined to be 117.00. At 9 allocated hours, this results in a target price of13.00 per hour. Therefore, 9 x 13.00 = 117.00 should be charged to the costobject. The difference of 27.00 is charged to the network activity with therevaluation at actual prices function.

In this example, revaluation at actual prices is illustrated using an activitytype. It also applies to business processes.


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Actual Overhead Allocation

Figure 139: Actual Overhead Calculation

Actual overheads are calculated based on the costing sheet and overhead keyentered on the WBS element, Network Header, or Network Activity.

Actual overhead calculation allocates cost objects with actual overheads.

Overhead is allocated to cost objects using quantity-based or percentageallocation rates.

You can simulate overhead allocation (test run).

The overhead calculation process generates the following postings:

� Overhead expenses are charged to cost objects (network activities,network header, and WBS elements)

� The cost center (or the overhead order or process) is credited

Costs are updated using the secondary cost elements specified in the creditrows in the costing sheet.

Actual overhead calculation uses the costing sheet entered in the cost object.


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Exercise 27: Preparation

Exercise ObjectivesAfter completing this exercise, you will be able to:� Perform activity based costing

Business ExampleProcedures that are performed periodically (for example, results analysis orsettlement) are performed on the basis of a fiscal period, (usually at the startof a period and for the preceding period).

For the customer project you can execute period-end closing using individualprocessing for each task. These tasks will include process cost allocation,overhead calculation, interest calculation, cost forecast, results analysis,incoming order analysis, and settlement.

You can allocate process costs to WBS elements or network activities byassigning process templates in both plan and actual processing. You do thisusing the Costing sheet and Overhead key.

We will allocate process costs to some of the activities in your network. Youwill enter an overhead key in the network activity to accomplish this. Processcosts allocated represent administrative work for managing the network.

Allocation is based on the number of activities in the network.

Task:Verify that the overhead key 1300 and costing sheet 130000 have been assignedto activities 0100 and 1110 in the T-100## project.

Project System menu: Project → Project Builder

1. Branch to the detail screen for the activity 0100. Select the Assignmentstab to display the assigned costing sheet. Verify that the overhead key1300 has been assigned. Repeat the process for activity 1110.

The process cost template is selected based on the costing sheet, overheadkey and environment. Networks are assigned to environment 004.

Save your project.

Choose Save.



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Choose Exit.

2. Allocate process costs for project T-100##, using the Period-End Closingmenu for individual processing.


Financials→ Period-End Closing→ Single Functions→ Template Allocation→ Individual Processing

Field Name ValueProject definition T-100##With hierarchy YesWith orders YesVersion 0Period Current period

Fiscal year Current yearBackground processing NoTest run NoDetailed lists Yes

Perform processing.

Choose Execute.

The list displays the allocated business process, 300900, the quantityand total value allocated to the network activity. The selected template,1300, is also displayed.


Choose Back.

Choose Back.

3. Use the information system to look at the template allocation results.

Invoke the cost element report Actual/Plan/Variance for your projectT-100##.



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Information System→ Financials→ Costs→ Plan-Based→ By Cost Element→ Actual/Plan/Variance Absolute/Variance %

Enter the Project definition T-100##, delete all other entries for networkor WBS element.

Field Name ValueProject definition T-100##

To Fiscal Current Year +2Leave other fields as they are

Choose Execute.

Process cost allocation was debited to cost element 629900, WorkPreparation.





Now display the accounting documents.


Position cursor on line.


Note: Note that you are presented only the cost accountingdocument. This is a CO only transaction. There is no financialaccounting posting generated. The project�s network activity isdebited and the business process is credited.

Exit the reports and return to the main SAP menu.

Choose Exit.



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Solution 27: PreparationTask:Verify that the overhead key 1300 and costing sheet 130000 have been assignedto activities 0100 and 1110 in the T-100## project.

Project System menu: Project → Project Builder

1. Branch to the detail screen for the activity 0100. Select the Assignmentstab to display the assigned costing sheet. Verify that the overhead key1300 has been assigned. Repeat the process for activity 1110.

The process cost template is selected based on the costing sheet, overheadkey and environment. Networks are assigned to environment 004.

Save your project.

Choose Save.


Choose Exit.

a)

2. Allocate process costs for project T-100##, using the Period-End Closingmenu for individual processing.


Financials→ Period-End Closing→ Single Functions→ Template Allocation→ Individual Processing

Field Name ValueProject definition T-100##With hierarchy YesWith orders YesVersion 0Period Current period

Fiscal year Current year



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Background processing NoTest run NoDetailed lists Yes

Perform processing.

Choose Execute.

The list displays the allocated business process, 300900, the quantityand total value allocated to the network activity. The selected template,1300, is also displayed.


Choose Back.

Choose Back.

a)

3. Use the information system to look at the template allocation results.

Invoke the cost element report Actual/Plan/Variance for your projectT-100##.



Enter the Project definition T-100##, delete all other entries for networkor WBS element.


To Fiscal Current Year +2Leave other fields as they are

Choose Execute.

Process cost allocation was debited to cost element 629900, WorkPreparation.



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Note: Note that you are presented only the cost accountingdocument. This is a CO only transaction. There is no financialaccounting posting generated. The project�s network activity isdebited and the business process is credited.


Choose Exit.


a)


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Exercise 28: Overhead

Exercise ObjectivesAfter completing this exercise, you will be able to:� Calculate overhead

Business ExampleWe will calculate overhead for the customer project T-100##. In the exercisesthat follow, you will trace how planned and actual overhead is calculated forWBS elements and activities.

Task:Check the assignment of costing sheets to your WBS elements and activitiesin the T-100## project.



1. Branch to the detail screens for individual WBS elements. Open theControl tab page to display the assigned costing sheet.

Select a WBS element. Select the Control tab. Costing sheet 130000 isassigned to the WBS elements.

Note: In this case, the costing sheet for the WBS elementsoriginates from the standard WBS elements.

In newly created projects, the costing sheet is taken from theproject profile.

Branch to the detail screens for the individual activities. Select theAssignments tab to display the assigned costing sheet.



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Select an activity. Select the Assignments tab. Costing sheet 130000 isassigned to the activities.

Note: The costing sheet for the activities is taken from thesuperior WBS elements: This applies to all activities, both thosecopied from the standard network and those newly created.

Note: When you create a network using the Create Networktransaction, the activities inherit the data from the networkheader.

2. Calculate overhead on the actual values for the project T-100##, using thePeriod-End Closing menu for individual processing.


Financials→ Period-End Closing→ Single Functions→ Applied Overhead→Individual Processing, Actual.

Enter the following information:

Field Name ValueProject definition T-100##With hierarchy YesWith orders YesPeriod Current periodFiscal year Current yearBackground processing NoTest run NoDetail lists YesDialog display No

Perform processing.

Choose Execute.

Choose the next list level icon to view the WBS elements and activities towhich overhead has been applied. Return to the main SAP menu.

Choose Exit.

3. Use the information system to view the calculated costs and overhead.



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Invoke the plan-based hierarchy report Plan/Actual/Variance for theproject T-100##.


Information System→ Financials→ Costs → Plan-Based → Hierarchical→Plan/Actual/Variances.

Enter the Project definition T-100##, delete all other entries besides theplanning version.

Field Name ValueProject T-100##Output Type Classic Drilldown Report


Choose Execute.

Note: On this report you can view the actual and planned cost ofyour project based on your structure. In this view you can chooseto view the data by period, business transaction (cost driver), orvalue category. Select the diamond icon to the left of a row andselect the view in the navigation section of the screen.

4. Review the results of the overhead calculation.

Select the total actual project cost.


The overhead cost allocation was debited to cost elements that beginwith 655***.

Select the actual costs of one of the cost element 655*** lines and displaythe source document.

Select the actual costs of one of the 655***.


Place the cursor on a line in the cost accounting document report.






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Choose Exit.

Confirm the dialog box messages that appear.


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Solution 28: OverheadTask:Check the assignment of costing sheets to your WBS elements and activitiesin the T-100## project.



1. Branch to the detail screens for individual WBS elements. Open theControl tab page to display the assigned costing sheet.

Select a WBS element. Select the Control tab. Costing sheet 130000 isassigned to the WBS elements.

Note: In this case, the costing sheet for the WBS elementsoriginates from the standard WBS elements.

In newly created projects, the costing sheet is taken from theproject profile.

Branch to the detail screens for the individual activities. Select theAssignments tab to display the assigned costing sheet.

Select an activity. Select the Assignments tab. Costing sheet 130000 isassigned to the activities.

Note: The costing sheet for the activities is taken from thesuperior WBS elements: This applies to all activities, both thosecopied from the standard network and those newly created.

Note: When you create a network using the Create Networktransaction, the activities inherit the data from the networkheader.

a)

2. Calculate overhead on the actual values for the project T-100##, using thePeriod-End Closing menu for individual processing.


Financials→ Period-End Closing→ Single Functions→ Applied Overhead→Individual Processing, Actual.



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Field Name ValueProject definition T-100##With hierarchy YesWith orders YesPeriod Current periodFiscal year Current yearBackground processing NoTest run NoDetail lists YesDialog display No

Perform processing.

Choose Execute.

Choose the next list level icon to view the WBS elements and activities towhich overhead has been applied. Return to the main SAP menu.

Choose Exit.

a)

3. Use the information system to view the calculated costs and overhead.

Invoke the plan-based hierarchy report Plan/Actual/Variance for theproject T-100##.


Information System → Financials→ Costs → Plan-Based → Hierarchical→Plan/Actual/Variances.

Enter the Project definition T-100##, delete all other entries besides theplanning version.

Field Name ValueProject T-100##Output Type Classic Drilldown Report




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Choose Execute.

Note: On this report you can view the actual and planned cost ofyour project based on your structure. In this view you can chooseto view the data by period, business transaction (cost driver), orvalue category. Select the diamond icon to the left of a row andselect the view in the navigation section of the screen.

a)

4. Review the results of the overhead calculation.

Select the total actual project cost.


The overhead cost allocation was debited to cost elements that beginwith 655***.

Select the actual costs of one of the cost element 655*** lines and displaythe source document.

Select the actual costs of one of the 655***.


Place the cursor on a line in the cost accounting document report.







Choose Exit.

Confirm the dialog box messages that appear.

a)


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Lesson Summary

You should now be able to:� Understand the concepts of period end closing� Describe the process of overhead calculation


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PLM230 Lesson: Project Interest Calculation

Lesson: Project Interest Calculation

Lesson OverviewThis lesson describes the interest calculation process in project hierarchy.


� Understand the role of interest calculation in project cost

Business ExampleAs the project manager, you want to realize revenues as early as possible andupdate expenditures as late as possible to earn interest on the funds.

Interest Calculation

Figure 140: Interest Calculation

The interest component calculates the interest on actual values.

As of Release 4.5A, you can also calculate interest on planned values.


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The system draws up balances based on costs, revenues, and/orincoming/outgoing payments. The interest is calculated using interest rates forbalances. The interest calculated is totaled over the interest calculation periodand updated in the project as costs (interest loss) or revenues (interest profit).

You specify the values that flow into daily balances by maintaining valuecategory interest relevance in the appropriate table.

Characteristics of the interest calculation function:

� Interest calculation is based on payment data (such as down payments)and actual costs (for example, internal activities) or actual revenues.

� The interest is calculated on a daily basis. Daily balances are drawnup to calculate the interest. In planned interest calculation, the intereston payment data is also calculated on a daily basis. Planned costs andrevenues are calculated on the basis of periods.

� Documents are written for interest postings.� Interest postings can be cancelled.� You can also calculate compound interest.� User exits are available to make adjustments.

Figure 141: Interest Calculation Example

The following data is included in the planned interest calculation:

� Planned costs, planned revenues, and planned payments in projects� Planned costs and planned revenues in internal orders that do not

reference projects


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Planned interest is recorded:

� By period for planned costs and planned revenues� To the day for planned payments if planned line items are written for

planned payments

The following data is included in the actual interest calculation:

� Costs, revenues, and payments in projects� Costs and revenues in internal orders and capital investment orders that

do not reference projects

You can choose if the actual interest is recorded by period or to the day.

Figure 142: Hierarchy Processing


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Interest in the project hierarchy is determined as follows:

� Inheritance:

The general principle is that objects (such as WBS elements, internalorders, and network activities) inherit the interest profile of their superiorWBS element if they do not have one of their own. If they do have aninterest profile of their own, they do not inherit one.

� For customer projects (projects with a billing element), interest-relevantdata is aggregated in billing elements and the interest is calculated. Also,WBS elements in customer projects can have an interest profile with theCalculate interest separately or No interest calculation indicator. Interest iscalculated separately for all the WBS elements subordinate to this one.

� For cost projects, target interest is determined in account assignmentelements. It is not aggregated upwards. Cost projects are projectswithout billing elements.

� For investment projects (projects with an investment profile), interest iscalculated on each account assignment element.

Controlling Interest Calculation

Figure 143: Controlling Interest Calculation


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The WBS element contains an interest profile.

The interest indicator controls the interest rates for debit and credit interestand determines where the update takes place, among other things. You canuse several interest indicators to:

� Calculate interest for various costs using various interest rates� Update interest costs/interest revenues separately

The interest profile is the basis to decide if interest calculation should beperformed for the selected value category in cost/payment line items or tospecify that line items should not be included in interest calculation.


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Exercise 29: Interest Calculation

Exercise ObjectivesAfter completing this exercise, you will be able to:� Calculate interest for your project

Business ExampleAs the project manager, you want to realize revenues as early as possible andupdate expenditures as late as possible to earn interest on the funds.

Task:Calculate interest for the project T-100##.

For project T-100##, you entered actual costs (in earlier units) by confirmingactivities. You also posted a down payment from the customer and revenuesfrom billing.

Note: All postings are entered in exercises with that day�s date. In realproject processing, postings are made at various times over severalperiods or years. For this reason, you should calculate interest as atthe end of the current period or the end of the next period in thefollowing exercise. Usually, the calculation is performed for the periodin arrears (Period-End Closing).

1. Access the interest calculation (individual processing) for the projectT-100##.


Financials→ Period-End Closing→ Single Functions → Interest calculation→ Individual processing.


Field Name ValueProject def. T-100##With orders Yes



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To period Next period/current fiscal yearTest run NoDetailed lists Yes

Perform the processing. Ignore the warning message for the futureperiod.

Choose Execute.

Click the Next list level icon to view interest balances.

The detail list displays the amount of interest income or expenditureposted for objects and the cost element under which this appears in thecost element report.

Exit from the interest calculation and go to the information system toevaluate the amounts posted.

Choose Exit.

2. Note the interest costs (or revenues) for project T-100## in the informationsystem. Invoke the cost element report Actual/Plan/Variance for projectT-100##.



Enter the Project definition T-100## and delete all other entries for thenetwork or WBS element.

Field Name ValueProject T-100##To fiscal year Current Year +2


Choose Execute.

The interest was posted to cost element 483000, Accrued Interest.


Select the actual costs of 483000.Continued on next page


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Exit from the reports and return to the main SAP menu.

Choose Exit.



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Solution 29: Interest CalculationTask:Calculate interest for the project T-100##.

For project T-100##, you entered actual costs (in earlier units) by confirmingactivities. You also posted a down payment from the customer and revenuesfrom billing.

Note: All postings are entered in exercises with that day�s date. In realproject processing, postings are made at various times over severalperiods or years. For this reason, you should calculate interest as atthe end of the current period or the end of the next period in thefollowing exercise. Usually, the calculation is performed for the periodin arrears (Period-End Closing).

1. Access the interest calculation (individual processing) for the projectT-100##.


Financials→ Period-End Closing→ Single Functions→ Interest calculation→ Individual processing.


Field Name ValueProject def. T-100##With orders YesTo period Next period/current fiscal yearTest run NoDetailed lists Yes

Perform the processing. Ignore the warning message for the futureperiod.

Choose Execute.

Click the Next list level icon to view interest balances.



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The detail list displays the amount of interest income or expenditureposted for objects and the cost element under which this appears in thecost element report.

Exit from the interest calculation and go to the information system toevaluate the amounts posted.

Choose Exit.

a)

2. Note the interest costs (or revenues) for project T-100## in the informationsystem. Invoke the cost element report Actual/Plan/Variance for projectT-100##.



Enter the Project definition T-100## and delete all other entries for thenetwork or WBS element.

Field Name ValueProject T-100##To fiscal year Current Year +2


Choose Execute.

The interest was posted to cost element 483000, Accrued Interest.











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Exit from the reports and return to the main SAP menu.

Choose Exit.


a)


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Lesson Summary

You should now be able to:� Understand the role of interest calculation in project cost


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Lesson: Cost Forecast and Progress Analysis

Lesson OverviewThis lesson focuses on cost forecast and progress analysis. The lessondescribes the cost forecast process. It explains the role of progress analysisin project accounting.


� Understand the process of cost forecast in project accounting� Understand the process of progress analysis in project accounting

Business ExampleYou have been assigned the task of evaluating period-end processes. As apart of this process, you need to determine the remaining costs of networkactivities based on planned, actual, and commitments costs using the costforecast and progress analysis.

Cost Forecast

Figure 144: Cost Forecast: Function


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PLM230 Lesson: Cost Forecast and Progress Analysis

During project execution, variances occur between the original cost andprocess planning and the actual cost of the project. Shifting activities withinfloats is sufficient to change the pattern of costs in the project. After theinitial actual costs are incurred, it is necessary to check and possibly updateremaining costs. This is the only way to preserve a base for a realistic costforecast during a project�s life cycle.

The cost forecast process is used to adapt cost planning to constantly changingcircumstances. For the cost to complete, the system determines and valuesremaining activities on the basis of the planned, forecast, and actual valuesin the network. The resulting figure is derived by adding the actual andcommitment costs already incurred in the project to the updated cost tocomplete.

The cost forecast determines the remaining costs that are expected to beincurred to complete the project. Planned, actual, and commitment values andconfirmed forecast dates and forecast work are used as the basis.

Cost forecasts can be made for projects with activities that are both appendedand apportioned. The forecast takes into account activity costs and costsof material components that are managed as collective stock. The cost tocomplete cannot be determined for simulation versions.

Cost forecast values are stored in a separate plan version. You can evaluatethese values in hierarchical reports or cost element reports through this planversion and value type P3. The standard SAP R/3 system ships with thehierarchy report 12CTC1.


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Figure 145: Cost to Complete

Based on planned, actual, and commitment values, the system determines theremaining costs in network activities. The system includes:

� All the actual and commitment values in the project� The plan values for network activities in CO version 0� Forecast values from confirmations

It ignores the following:

� WBS element plan values� Network preliminary planning values� Plan costs for material components in valuated project stock (planned for

a later release)

Based on planned, actual, and commitment costs, the system determines whatis still to be done in network activities and costs. The system records thevalue determined as cost to complete, by period, in a cost forecast versionfor internally processed activities, externally processed activities, generalcosts activities, and material components not managed as part of project stock(valued or not valued).

Values are usually determined as of the first day of the current period, as partof period-end closing. You have the option to specify your own key datefor the cost forecast. The system uses the key date to determine the costdistribution.


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Residual costs are determined similar to the way planned values arecalculated. The basis for residual cost calculation is the planned costingvariant defined for the activity.

If an activity is marked as complete or there is a final confirmation, the systemsets the cost to complete to zero.

Progress Analysis

Figure 146: Progress Analysis: Basic Concepts

The Percentage Of Completion (POC) describes the ratio of activity performeduntil a key date as a percentage of the total work for the activity or project.

The system distinguishes between three values:

� Values not aggregated: Values are displayed for each object.� Aggregated values: Values are aggregated in line with the project

hierarchy. Various weightings can be applied.� CO-PA: The system determines the aggregated POC for the billing

element. The aggregation includes project elements that are subordinateto the billing element in the billing structure.

POCs are recorded under statistical key figures. For reporting purposes,statistical key figures are assigned to value categories.

The term earned value describes costs corresponding to the POC of an activityor project.


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It is the result of applying the overall planned costs to the POC.Overall plannedcosts are accumulated planned costs and the budget.

Figure 147: Progress Determination: Function

If you want to control your project effectively, you need to do more thanindividually studying costs, resources, and schedules. You can draw informedconclusions on the progress and current status of your project only whenyou compare these values with actual results. Progress analysis enables youto do this. It is suitable both for internal control of a project and for externalreporting.

You can estimate the POC of WBS elements, activities, and activity elements.You can also calculate POC automatically using existing data. In both cases,a planned POC (expected progress at a specific point in time) and an actualPOC (progress actually made at a specific point in time) is determined. Byspecifying a weighting factor (planned costs, for example), you can aggregatethese values in the WBS.

The system uses a factor such as planned costs to calculate progress valuesfrom POCs:

BCWS: Budget cost of work scheduled (costs according to planned progress)

BCWP: Budgeted cost of work performed (target costs according to actualprogress)

Actual costs: Costs actually incurred


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Comparing earned values provides important information. By comparingBCWS with BCWP, you can determine any deviations from the schedule (theproject is progressing too slowly). By comparing the BCWP with actual costs,you can determine any cost variances (the project is too expensive).

Earned value analysis data can be stored in a separate plan version andevaluated using the Structures Information System or the ControllingInformation System.

Figure 148: Progress Value Determination: Measurement Methods

Measurement techniques determine how the progress value (planned andactual) is calculated.


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The following measurement techniques are available in the SAP system:

� Start/finish rule� Estimation� Milestone technique� Time proportionality� Cost proportionality� Quantity proportionality� Degree of processing (only for activities, only for actual POCs)� Secondary proportionality� User-defined techniques (user exit)

You define default measurement techniques for each object (WBS element,activity, project orders) in Customizing. If required, you can overwrite thesedefaults in the project structures.

The system uses specific weighting factors to summarize progress valuesin the project structure. One such weighting factor is the project cost plan(recommended here).

You can use POCs as earned values for the results analysis. To do so, choosetechnique 07, POC method based on project earned value analysis, in the resultsanalysis and enter the plan version of the earned value analysis.

Figure 149: Progress Analysis: Evaluation (1)


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The POC and the earned value are important project key figures. You cananalyze them at the level of individual project elements or as aggregated forthe whole project/subproject. Like other project key figures, progress analysisvalues are available in the following report types:

� Structure-oriented report on progress analysis� Drill-down hierarchy report� Report Painter or Report Writer reports

You can use the structure overview to evaluate the POC and earned value.The system displays the values in line with the project hierarchy. You canuse the structure overview to evaluate the POC and the earned value in thefollowing configurations:

Aggregated, not aggregated, not corrected, and corrected

From the hierarchical display, you can navigate to a project object in the periodbreakdown and to the graphical display.


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Exercise 30: Cost Forecast

Exercise ObjectivesAfter completing this exercise, you will be able to:� Identify the purpose of Cost planning� Identify the purpose of planned costs

Business ExampleAs the project manager, you want to determine the remaining costs thatare expected to be incurred to complete the project. Planned, actual, andcommitment values and the confirmed forecast dates and forecast work fromactivity confirmations are used as the basis for this. The cost forecast resultsare stored in a cost forecast version.

Task:Calculate the cost forecast for project T-100##.

For project T-100##, you entered actual costs (in earlier units) by confirmingactivities. You also confirmed activities as complete and created commitmentsfor purchased items. You would like a projection of costs based on the workthat is completed and remaining planning values.

1. Access the cost forecast calculation (individual processing) for projectT-100##.


Financials → Period-End Closing → Single Functions → Cost Forecast →Individual processing.


Field Name ValueProject definition T-100##Version PS: Cost to CompleteTest run NoDetailed lists Yes

Execute.



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Choose Execute.

Click the Detail List icon to view the result.

In the detail list, you see the planned costs, actual costs, commitments,the updated remaining costs, and the updated overall costs. If an activityis complete (status) and does not have remaining commitments, theupdated overall costs reflect the actual costs. If there is work remaining,the updated remaining costs reflect the difference between the actualcosts and the updated overall costs. You can expand the activities todisplay the cost element information. There is also a totals line displayedfor each network.

Exit from the listing and return to the main SAP menu.

Choose Exit.

2. Compare the forecasted results for project T-100## to the planningversion 0 in the information system. This enables you to evaluate if theprojected cost for the project is above or below the planned costs inversion 0. Invoke the hierarchy report Planned -Costs, Forecast:


Information System → Financials → Costs → Plan -Based → Hierarchical→ Forecast

Enter project T-100##. Compare plan version 0 to forecast version 133.

Field Name ValueProject definition T-100##Project Version 0Forecast Version 133Output Type Classic Drilldown Report

Execute.

Choose Execute.

Expand the report levels, which displays original planned costs, actualcosts confirmed to date, planned costs that require confirmation, and anupdated total cost that represents the actual cost plus the balance ofthe unconfirmed planned cost. You notice that the original project costwas planned inaccurately.



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Record the following total values:

Updated Remaining Cost: ______________________________

Updated Total Cost: _____________________________

Exit from the report and return to the main SAP menu.

Choose Exit.

3. To review the effect of confirmation on the cost forecast, enter aconfirmation for activity 5100. While creating the confirmation, removethe degree of processing, final confirmation indicator, and the completionindicator. Specify the actual work days as five, forecasted work as 65days, actual hours as 50, and the forecasted remaining work hours as1500. Save the confirmation.


Information System→ Structures→ Structure Overview (CN41)



Leave all other fields as is.

Choose Execute.

Select activity 5100 for confirmation.

Expand the project structure.

Select activity 5100.

Select Verify → Individual Confirmation.

Enter data in the screen as follows:

Field Name Value100 % Processing Remove valueFinal Conf Indicator DeselectCompl indicator DeselectActual duration 5 Day



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Forecast duration 65 DayActual work 50 HrForecast work 1500 Hr

Save.

Confirm the message about the work and the degree of processing.

Click the Refresh icon to update the structure overview for theconfirmation entry. Note that the changed values are highlighted onthe screen.

Exit from the Structure Overview and return to the main SAP menu.

Choose Exit.

4. Recalculate the cost forecast (individual processing) for project T-100##.In the output, note the effect of the forecast work on activity 5100.


Financials → Period-End Closing → Single Functions → Cost Forecast →Individual processing



Execute

Choose Execute.


The detail list displays the planned costs, actual costs, commitments, theupdated remaining costs, and the updated overall costs. The cost forecastof activity 5100 has been increased to recognize the forecasted remainingwork hours (1500 hours) that were entered during the confirmationprocess. The cost forecast for this activity now exceeds the original planfor the activity.



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Exit from the Detail List and return to the main SAP menu.

Choose Exit.

5. Again, compare the forecasted results for project T-100## to the planningversion 0 in the information system. This enables you to evaluate if theprojected cost for the project is above or below the planned costs inversion 0. Invoke the hierarchy report Planned -Costs, Forecast:





Choose Execute.

Expand the report levels. You will notice that the cost of completing theproject has increased as a result of the confirmation you entered.

Record the following total values and compare them with your entries instep 4-1-2:


Updated Total Cost: ______________________________

Exit the report and return to the main SAP menu.

Choose Exit.


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Solution 30: Cost ForecastTask:Calculate the cost forecast for project T-100##.

For project T-100##, you entered actual costs (in earlier units) by confirmingactivities. You also confirmed activities as complete and created commitmentsfor purchased items. You would like a projection of costs based on the workthat is completed and remaining planning values.

1. Access the cost forecast calculation (individual processing) for projectT-100##.


Financials → Period-End Closing → Single Functions → Cost Forecast →Individual processing.



Execute.

Choose Execute.


In the detail list, you see the planned costs, actual costs, commitments,the updated remaining costs, and the updated overall costs. If an activityis complete (status) and does not have remaining commitments, theupdated overall costs reflect the actual costs. If there is work remaining,the updated remaining costs reflect the difference between the actualcosts and the updated overall costs. You can expand the activities todisplay the cost element information. There is also a totals line displayedfor each network.

Exit from the listing and return to the main SAP menu.



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Choose Exit.

a)

2. Compare the forecasted results for project T-100## to the planningversion 0 in the information system. This enables you to evaluate if theprojected cost for the project is above or below the planned costs inversion 0. Invoke the hierarchy report Planned -Costs, Forecast:





Execute.

Choose Execute.

Expand the report levels, which displays original planned costs, actualcosts confirmed to date, planned costs that require confirmation, and anupdated total cost that represents the actual cost plus the balance ofthe unconfirmed planned cost. You notice that the original project costwas planned inaccurately.

Record the following total values:


Updated Total Cost: _____________________________

Exit from the report and return to the main SAP menu.

Choose Exit.

a)

3. To review the effect of confirmation on the cost forecast, enter aconfirmation for activity 5100. While creating the confirmation, removethe degree of processing, final confirmation indicator, and the completion



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indicator. Specify the actual work days as five, forecasted work as 65days, actual hours as 50, and the forecasted remaining work hours as1500. Save the confirmation.


Information System→ Structures→ Structure Overview (CN41)



Leave all other fields as is.

Choose Execute.

Select activity 5100 for confirmation.

Expand the project structure.

Select activity 5100.

Select Verify → Individual Confirmation.

Enter data in the screen as follows:

Field Name Value100 % Processing Remove valueFinal Conf Indicator DeselectCompl indicator DeselectActual duration 5 DayForecast duration 65 DayActual work 50 HrForecast work 1500 Hr

Save.

Confirm the message about the work and the degree of processing.

Click the Refresh icon to update the structure overview for theconfirmation entry. Note that the changed values are highlighted onthe screen.



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Exit from the Structure Overview and return to the main SAP menu.

Choose Exit.

a)

4. Recalculate the cost forecast (individual processing) for project T-100##.In the output, note the effect of the forecast work on activity 5100.


Financials → Period-End Closing → Single Functions → Cost Forecast →Individual processing



Execute

Choose Execute.


The detail list displays the planned costs, actual costs, commitments, theupdated remaining costs, and the updated overall costs. The cost forecastof activity 5100 has been increased to recognize the forecasted remainingwork hours (1500 hours) that were entered during the confirmationprocess. The cost forecast for this activity now exceeds the original planfor the activity.

Exit from the Detail List and return to the main SAP menu.

Choose Exit.

a)

5. Again, compare the forecasted results for project T-100## to the planningversion 0 in the information system. This enables you to evaluate if theprojected cost for the project is above or below the planned costs inversion 0. Invoke the hierarchy report Planned -Costs, Forecast:

Project System menu:Continued on next page


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Choose Execute.

Expand the report levels. You will notice that the cost of completing theproject has increased as a result of the confirmation you entered.

Record the following total values and compare them with your entries instep 4-1-2:


Updated Total Cost: ______________________________

Exit the report and return to the main SAP menu.

Choose Exit.

a)


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Lesson Summary

You should now be able to:� Understand the process of cost forecast in project accounting� Understand the process of progress analysis in project accounting


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Lesson: Results Analysis

Lesson OverviewThis lesson explains the concepts of Results Analysis. It describes thevarious methods of valuating Results Analysis. The lesson also explains thecustomization that can be performed in Results Analysis and the varioustechniques of Results Analysis.


� Understand the concepts of results analysis� Identify the different customization that can be performed in results

analysis� Identify the different techniques of result analysis

Business ExampleUse Results Analysis to accrue costs and revenues by period for the projectT-100##. Results Analysis calculates reserves and balances. Settlement isused to settle profit by period to Profitability Analysis and post reserves orbalances in FI.


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PLM230 Lesson: Results Analysis

Overview of Results Analysis

Figure 150: Results Analysis: Objectives

Results Analysis is a periodic process that determines the costs and revenuesfor a period based on planned costs and revenues and the Percentage OfCompletion (POC).

By comparing these results with actual postings recorded previously inFinancial Accounting, the analysis provides postings in Financial Accounting(WIP, reserves). Also, a few results can be posted to Profitability Analysis toensure that the period results in Financial Accounting are the same as thoserecognized in Profitability Analysis.

The first stage of results analysis involves calculating the following values:

� Inventory values� Reserves for unrealized costs� Reserves for imminent loss� Reserves for complaints/warranties and commissions� Cost of Sales


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You can settle the following to Financial Accounting (FI) and Profit CenterAccounting (CO-PCA):

� Inventory values� Reserves for unrealized costs� Reserves for imminent loss� Reserves for complaints and commissions.� The cost of sales if you are using nonvaluated project stock and are

balancing in FI with the cost-of-sales accounting method

You can settle the following to Profitability Analysis (CO-PA):

� Cost of sales or calculated revenue� Reserves for imminent loss and complaints

Figure 151: Results Analysis: Overview (1)

Results analysis evaluates long-term customer projects.

It determines costs and revenues that belong to earned values for a projectin a given period. It can also determine Work-In-Process (WIP) or reservesfor unrealized costs.

Results Analysis calculations are based on comparing planned with actualcosts and revenues based on a POC.


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The POC is determined by the valuation method you chose. You can calculateResults Analysis using various valuation methods and store the results invarious CO versions.

Results are calculated for:

� Billing elements

.

� Non-billing WBS elements with stocks of their own and assigned orders,which require a separate Results Analysis calculation.

Legend:

C(z) Work in progress C(r) Reserves for unrealized costs

R(z) Inventory, from which R(r) Revenue surplus

revenue can be generated

R(p) Planned revenues C(p) Planned costs

R(a) Actual revenues C(a) Actual costs

R(c) Revenues affecting result C(c) Costs affecting result

POC Percentage of completion

Figure 152: Results Analysis: Overview (2)


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Results Analysis calculates costs and revenues by period, with balances orreserves. Settlement settles the values it determines to a settlement receiver(usually a profitability segment).

If the costs that affect the result are different from actual costs, the followingscenarios may result:

� If actual costs are greater than the calculated cost of sales for the result,the difference is posted as work in process.

� If actual costs are less than the calculated cost of sales for the result, areserve for unrealized costs is established.

If revenues that affect the result are different from actual revenues, thefollowing scenarios may result:

� If the actual revenues exceed revenues that affect the result, the differenceforms a revenue surplus (unearned revenue)

.

� If the actual revenues are less than revenues that affect the result, theresult is called inventory, from which revenue can be generated (deferredrevenue).


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Methods of Valuating Results Analysis

� 01 - Revenue proportionality - with realization of profit� 02 - Revenue proportionality - with no realization of profit if actual

revenue < plan costs� 03 - Cost proportional POC method� 04 - Quantity proportional method� 05 - Quantity proportional POC method� 06 - POC method based on revenue planned by period� 07 - POC method based on project progress analysis� 08 - Derive costs of sales from resource-related billing� 09 - Completed contract method� 10 - Determine stock without plan costs without milestone billing� 11 - Determine stock without plan costs with milestone billing� 12 - Determine stock and reserves for follow-up costs without milestone

billing� 13 - Determine WIP for actual costs in objects not bearing revenues� 14 - Derive costs of sales from resource-related billing of dynamic

line items� 15 - Derive revenues from resource-related billing of dynamic line items

The Results Analysis method you use depends on the constraints of yourbusiness requirements. Your business can use various processes and types ofprojects and may require various Results Analysis methods. The valuationmethod contains formulas to calculate Results Analysis data.

There are also legal constraints that determine if unrealized profit may becapitalized. The constraints differ from country to country (for example, theUnited States and Germany).

� If you do not want to capitalize unrealized profits, use a Results Analysismethod that can be used to create capitalized costs.

� If you want to capitalize unrealized profits, use a Results Analysismethod to create inventory from which revenue can be generated.

A few methods of creating capitalized costs and inventory from whichrevenue can be generated also enable automatic creation of reserves forunrealized costs or reserves for imminent losses.

This unit describes the methods highlighted in this graphic.


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Figure 153: Revenue-Proportional Results Analysis: An Example

When you use revenue-based methods, the revenue relevant to profit equalsthe actual revenue. You can use this method with milestone billing and toreport intermediate profits. You should have planned costs and revenues touse this method.

The POC is determined using the ratio of actual revenue to planned revenue.

If you perform revenue-based Results Analysis according to the cost of salesmethod, the cost of sales is formed on the basis of actual revenues earnedto date.

If actual costs are greater than the costs relevant to profit, the system createsreserves for unrealized costs.

If actual costs are less than the costs relevant to profit, the system createsreserves for unrealized costs (expenses).

If you use the revenue-based method with profit realization, the calculatedcost of sales is zero as long as the actual revenue for the period is zero.Capitalized costs then equal the actual costs of the period.

The example shows the POC calculated using the ratio of actual revenuesposted to date to planned revenues (POC = 40%).


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The POC is used to determine the cost of sales for actual revenues (COS =40% x planned costs = 800).

The result is an inventory balance (WIP = 200) because actual costs are greaterthan the calculated costs of sales. The settlement of the WIP generates thefollowing postings in FI: Inventory (WIP) account against an InventoryChange account of 200.

The inventory change account is closed against the profit and loss account.The P and L shows 1200 as the actual revenue on the profit side plus 200 asinventory change. On the loss side, the P and L shows actual costs as 1000.Based on these postings, FI and CO-PA both show a profit of 400.

Figure 154: Cost Proportionality Example

When you use the cost-based percentage of completion method in ResultsAnalysis, the system calculates the revenue on the basis of actual costsincurred up to the current period. You should have planned costs andrevenues to use this method.

The percentage of completion method differs from revenue-based results. Aprofit or loss is reported if actual costs are incurred, but there is no revenue.With revenue-based Results Analysis, a profit or loss is not shown until actualrevenue is received.


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The example shows the POC calculated using the ratio of actual costs postedtill date to the planned costs (POC = 50%).

The calculated revenues belonging to actual costs are determined using thisPOC (R(c) = 50% x planned revenues = 1500).

The result is inventory from which revenue can be generated (R(z) = 300,deferred revenue), because the actual revenues to date are less than thecalculated amount (1200).

The settlement generates the following posting in FI, inventory (WIP) againstan inventory change account of 300.

The inventory account is closed against the Profit and Loss account. The Pand L account shows 1200 as actual revenues on the profit side plus revenuesthat can be capitalized as 300. The P and L account shows actual costs as 1000(expenses) on the loss side. The FI and CO-PA shows a profit of 500.

Figure 155: POC Using Progress Analysis: Example

In the POC method of earned value analysis, the project earned valueis determined by a process that is independent of the Results Analysis(PS-earned value analysis, see Appendix).


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This independent POC is used to determine costs and revenues by period andperform correction postings to both costs and revenues.

The POC method is often used in Britain and North America. The POCmethod is used in Germany only for internal information purposes, becauseGerman law does not permit the reporting of unrealized profits.

This method enables you to:

� Determine the revenue that affects net income on the basis of the actualquantity. This enables you to report a profit before a revenue has actuallybeen received.

� Determine the costs that affect net income

.

� Determine the revenue in excess of billings

.

� Determine the capitalized costs.� Determine the reserves for unrealized costs.� Determine the surplus revenue.� Show unrealized profits.

You should have planned costs and revenues to use this method.


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Figure 156: Cost of Sales from Resource-Related Billing

Method 14 (cost of sales from resource-related billing) does not determine aPOC. It determines the cost of sales as a proportion of the actual costs incurredthat have already been billed to the customer. The remainder of the actualcosts make up the cost balance.

This Results Analysis method can be used only with resource-related billingof dynamic line items.

The cost of sales is derived from resource-related billing with dynamic items.The cost of sales is calculated in the amount of the invoiced line items.

Revenues are calculated in SD pricing on the basis of billed line items.

Planned values are not used in this Results Analysis method. It is notnecessary to establish planned costs for Results Analysis.

You can calculate inventory values using this method. In this process, there isno reserve for unrealized costs.

See Results Analysis method 15 Derive Revenue from Resource-Related Billingand Simulation of Dynamic Items. Results Analysis method 15 calculates the costof sales in the amount of the incurred actual costs.


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Considerations for Results Analysis

Figure 157: Life Cycle of a Project

Use the WBS element status to divide the project life cycle in defined stagesthat lead to various results in the Results Analysis. The standard systemdistinguishes between three stages (the second stage can be left blank in thevaluation methods).

Released: As soon as the WBS element has this status, you can assign actualcosts and revenues to the WBS element. Results Analysis can then value theWBS element on the basis of actual costs, actual revenues, or actual quantities.The standard system draws on the valuation basis ofMaximum of planned costsand actual costs and planned revenues.

Final invoice: As soon as this status is set (manually) for the WBS element,further actual revenues cannot be entered. You can specify that all balancesand reserves for unrealized costs should be cancelled (all costs are costs ofsales). Follow-up costs (such as warranties or refunds) are still possible. Forthis reason, reserves remain in place. The actual revenues replace the plannedrevenues as the basis for Results Analysis.


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Technically completed: As soon as this status is set for the sales order item,further changes to planned values are not possible. Further (unplanned) costshave a direct effect on profit. The standard system draws on the Actual cost,actual revenues valuation basis in this phase. The planned data is ignored. Theresult is the actual revenues minus actual costs.

Figure 158: Separate Results Analysis for Billing Elements

Results Analysis in the project structure always takes place in billing elements.

The Results Analysis data in a billing element includes an aggregated planand actual costs from the WBS elements or orders subordinate to the billingelement.

In the case of orders, note that only plan costs for appended orders areincluded in the assigned WBS elements. You usually plan the costs for otherorders manually in the WBS element.

In settlement, only billing elements with Results Analysis are settled becausethey already contain the plan and actual data for subordinate WBS elementsand orders.

Note: The Project structure indicator is set to A in the simplified(non-expert) mode to maintain valuation methods. This setting ispossible only for projects with a billing element or projects that have allbilling elements in one hierarchy level. In all other cases, you shoulduse the expert mode to set the structure indicator to U, T, or B.


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Figure 159: Results Analysis for Subhierarchies and Overall Valuation

If you want to perform Results Analysis separately for specific subhierarchiesand valuate the entire project, the top element in the project is assigned aResults Analysis key with the project structure indicator B.

The planned and actual data from subordinate WBS elements are summarizedupwards; plan, actual, and results analysis data from the WBS elements,where results analysis has taken place, is passed to the top element.

Figure 160: Separate Results Analysis for WIP Elements


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If parts of the project are processed in different company codes, businessareas, or profit centers, you may have to calculate and post balances andreserves separately in non-billing elements (WIP elements) or orders.

In such cases, the WBS elements or orders are assigned a Results Analysis keyor settlement rule of their own. Plan and actual data is rolled up from thesubordinate WBS elements. Data between WIP elements is not aggregated inResults Analysis.

Note: Results Analysis that is proportional to revenue is not possiblein non-billing elements.

Figure 161: Results Analysis on Loss-Making Projects

A loss-making project is a project whose planned costs exceed its plannedrevenues. In this case, Results Analysis creates a reserve for imminent loss tothe amount of the difference.

You can specify when this reserve is to be cleared in Customizing:

� When actual costs are incurred� When actual revenues arise� In both cases


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Figure 162: Planned Results Analysis

You can perform Results Analysis as a planning process.

Do this with the same transaction or program used for actual Results Analysis,but set the planned results analysis indicator.

You can use planned Results Analysis to determine the revenues and costs ofsales you expect for future periods by period. The calculated planned valuesare settled to Profitability Analysis (CO-PA).

Precise data is particularly important for this process.


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Customizing Results Analysis

Figure 163: Results Analysis: Customizing

Steps in Customizing:

� Create Results Analysis cost elements for WIP and reserves and stipulatecost element grouping (organizational)

� Create Results Analysis version as CO plan version� Maintain Results Analysis keys� Maintain Results Analysis methods� Define the update� Define the assignment� Define posting rules

Legend:

Profit and loss statement

POC Percentage of completion (method)

Line ID Line identification number

WIP Work in process


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COS Cost of sales

Figure 164: Valuation Methods: Simplified Maintenance

Choose a Results Analysis method based on your business requirements. Acompany usually runs various types of processing and various methods ofResults Analysis simultaneously. Results Analysis methods contain the rule tocalculate Results Analysis data. The standard system contains various ResultsAnalysis methods. Decide which results analysis method you want to use.

A project passes through a number of stages that lead to various results inResults Analysis. In the standard system, there are three relevant systemstatuses, such as:

� REL (released)� FNBL (final billing)� TECO (technically completed)

In Customizing, you specify the status that permits the following activities:

� At which status Results Analysis can be performed� At which status the work in process is canceled (optional)� At which status the work in process and reserves are cancelled


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Figure 165: Assignment/Update/Posting Rules

Results Analysis records the Results Analysis data in the billing element orWIP element under secondary cost elements. You specify the cost elementsthat should be updated in Customizing.

You assign source cost elements (expense and revenue) to a Line ID, whichrepresents a type of cost such as material consumption, direct activities,overheads, or revenues. You can choose to specify a percentage of eachassignment line to not be capitalized and another percentage to have theoption to be capitalized. The remaining percentage is considered capitalized.

Each LID and type of result (costs, revenues, reserves, and special costs) isassigned to a Results Analysis cost element. These cost elements are used torecord the data from the analysis and in Results Analysis reporting.

Define the posting rules that enable you to forward balances and reserves toFinancial Accounting. The posting rules are defined by the type of result suchas costs, WIP, reserves, or revenues.


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Results Analysis Levels

Figure 166: Results Analysis at Group Level

If you specify Valuation at line ID level in the valuation method, ResultsAnalysis determines separate values for each line ID. In specific cases, thismay result in WIP balances being determined for some line IDs and reservesfor imminent losses for other line IDs.


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Figure 167: Results Analysis at Totals Level

If you choose Totals Level, the system calculates work in process, reserves forunrealized costs, reserves for complaints and commissions, and reserves forimminent loss for each object. These values are then distributed to line IDsaccording to a method of apportionment specified in the valuation method.

If Results Analysis takes place at the totals level, you should check the methodused to apportion the total value to individual line IDs.

� The standard setting for apportionment is:� Capitalized costs and work in process: Cumulative actual costs� Reserves for unrealized costs: Difference between planned costs and

cumulative actual costs� Reserves for costs of complaints and commissions: Difference between

plan costs and cumulative actual costs� Reserves for imminent loss: Display of credit for inventory with

prohibition to capitalize and inventory with option to capitalize


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If a method of apportionment cannot be used, the system seeks an alternativemethod of apportionment. The system searches in the following order:

� Apportionment numbers (according to the number defined under Updatefor Results Analysis)

� Cumulative actual costs� Planned costs� Apportionment numbers with apportionment numbers for each line ID

= 1

Figure 168: Apportioning Balances per Plan

In this example, apportionment is based on plan costs.

Results Analysis determines that the WIP balance is 200.


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This amount is apportioned to Line IDs based on planned costs:

� Total plan: 2000� Material ratio of plan: 50% (1000/2000)

� Material apportionment is then 200 x 50% = 100� Internal cost allocations ratio of plan 25% (500/2000)

� Internal apportionment is then 200 x 25% = 50� Overhead cost allocations ratio of plan 25% (500/2000)

� Overhead apportionment is then 200 x 25% = 50

The apportionment is used to determine the portion of the 200 balance thatbelongs to each Line ID. The RA cost elements and posting rules depend onthe assigned Line ID.


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Exercise 31: Results Analysis

Exercise ObjectivesAfter completing this exercise, you will be able to:� Use results analysis to accrue costs and revenues by period for the

projects

Business ExampleUse Results Analysis to accrue costs and revenues by period for the projectT-100##. Results Analysis calculates reserves and balances. Settlement settlesthe profit by period to Profitability Analysis and posts reserves or balancesin FI.

Task:Assigning the Results Analysis Key:

In the following, determine the Results Analysis keys that are assigned to thebilling WBS elements of project T-100##. A Results Analysis key is required tocalculate results.

1. Access the project builder for project T-100##.

Project Systems menu:

Basic data → Project Builder

Select project T-100##.

Branch to the detail screen for billing elements T-100## and T-100##.1.2.

Open the Control tabbed page.

Double-click WBS element.

Control tab page.

Note: The Results Analysis key 130001 assigned to each WBSelement. No other WBS elements are assigned RA keys.

2. Results Analysis:

Carry out results analysis for the current period for project T-100##.



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From the period-end closing, access Results Analysis using individualprocessing for project T-100##.


Financials → Period-End Closing → Results analysis → Proceed →Individual processing


Field Name Values WBS Element. T-100## Calculation to month Currentperiod Year Current year Results analysis version 0 Manual ProcessingOnly No Full log Yes Execute the report.

Execute the report.

Review the list of Results Analysis values for your project. Note that thecosts and revenue for the billing element T-100##.1.2 are not includedin this analysis.

Hint: Results Analysis key 130001 and Results Analysis version0 stipulate revenue-proportional Results Analysis in the IDESsystem. Cost of sales (COS) is calculated for the project. Thesystem uses this figure to calculate reserves for unrealized costsor Work-In-Process (WIP). If the proportional revenue (POCactual revenue: planned revenue) determines the calculated COSgreater than actual COS, reserves are created for unrealized costs.This prevents profit from being overstated in the fiscal period.If the proportional revenue determines the calculated COS lessthan the actual COS, balances are created for the inventory fromwhich revenue can be generated.


Choose Execute.



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Hint: Results Analysis key 130001 and Results Analysis version0 stipulate revenue-proportional Results Analysis in the IDESsystem. Cost of sales (COS) is calculated for the project. Thesystem uses this figure to calculate reserves for unrealized costs orWork-In-Process (WIP). If the proportional revenue (POC actualrevenue: planned revenue) determines the calculated COS greaterthan actual COS, reserves are created for the unrealized costs.This prevents profit from being overstated in the fiscal period.If the proportional revenue determines the calculated COS lessthan the actual COS, balances are created for the inventory fromwhich revenue can be generated.

5. Access the logs to obtain additional information about Results Analysiscalculation, such as the POC and the configuration for Results Analysiskey 130001.

Logs → Explanation Facility

Save your results.

6. Execute the Results analysis calculation for WBS element T-100##.1.2.

Enter the following data in the initial screen: Field Name Values WBSElement. T-100##.1.2 Calculation to month Current period Year Currentyear Results analysis version 0 Manual Processing Only No Full log YesExecute the report.

Choose Execute.

Review the list of Results Analysis values for your project.

Save your results in both currencies (controlling area and company code).

Exit from the program and return to the main SAP menu.

Click Exit.


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Solution 31: Results AnalysisTask:Assigning the Results Analysis Key:

In the following, determine the Results Analysis keys that are assigned to thebilling WBS elements of project T-100##. A Results Analysis key is required tocalculate results.

1. Access the project builder for project T-100##.


Basic data → Project Builder


Branch to the detail screen for billing elements T-100## and T-100##.1.2.

Open the Control tabbed page.

Double-click WBS element.

Control tab page.

Note: The Results Analysis key 130001 assigned to each WBSelement. No other WBS elements are assigned RA keys.

a)

2. Results Analysis:

Carry out results analysis for the current period for project T-100##.

From the period-end closing, access Results Analysis using individualprocessing for project T-100##.


Financials → Period-End Closing → Results analysis → Proceed →Individual processing

a)


Field Name Values WBS Element. T-100## Calculation to month Currentperiod Year Current year Results analysis version 0 Manual ProcessingOnly No Full log Yes Execute the report.



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Execute the report.


Hint: Results Analysis key 130001 and Results Analysis version0 stipulate revenue-proportional Results Analysis in the IDESsystem. Cost of sales (COS) is calculated for the project. Thesystem uses this figure to calculate reserves for unrealized costsor Work-In-Process (WIP). If the proportional revenue (POCactual revenue: planned revenue) determines the calculated COSgreater than actual COS, reserves are created for unrealized costs.This prevents profit from being overstated in the fiscal period.If the proportional revenue determines the calculated COS lessthan the actual COS, balances are created for the inventory fromwhich revenue can be generated.

a)


Choose Execute.


Hint: Results Analysis key 130001 and Results Analysis version0 stipulate revenue-proportional Results Analysis in the IDESsystem. Cost of sales (COS) is calculated for the project. Thesystem uses this figure to calculate reserves for unrealized costs orWork-In-Process (WIP). If the proportional revenue (POC actualrevenue: planned revenue) determines the calculated COS greaterthan actual COS, reserves are created for the unrealized costs.This prevents profit from being overstated in the fiscal period.If the proportional revenue determines the calculated COS lessthan the actual COS, balances are created for the inventory fromwhich revenue can be generated.

a)



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5. Access the logs to obtain additional information about Results Analysiscalculation, such as the POC and the configuration for Results Analysiskey 130001.

Logs → Explanation Facility

Save your results.

a)

6. Execute the Results analysis calculation for WBS element T-100##.1.2.

Enter the following data in the initial screen: Field Name Values WBSElement. T-100##.1.2 Calculation to month Current period Year Currentyear Results analysis version 0 Manual Processing Only No Full log YesExecute the report.

Choose Execute.

Review the list of Results Analysis values for your project.

Save your results in both currencies (controlling area and company code).

Exit from the program and return to the main SAP menu.

Click Exit.

a)


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Lesson Summary

You should now be able to:� Understand the concepts of results analysis� Identify the different customization that can be performed in results

analysis� Identify the different techniques of result analysis


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Lesson: Incoming Order Analysis

Lesson OverviewThis lesson describes the incoming order analysis. It explains how to maintainand evaluate incoming orders.


� Maintain incoming orders� Evaluate incoming orders

Business ExampleIncoming Order analysis can be used to evaluate the costs and revenues forincoming orders or the open order value. This information can be updatedto Profitability Analysis during settlement. This enables you to obtain astatement on the expected result for customer projects at an early stage.

Evaluating Incoming Orders in Profitability

Figure 169: Incoming Orders: Sales Order Values


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PLM230 Lesson: Incoming Order Analysis

The system uses this function to determine key figures for incoming order andopen order values from sales orders assigned to projects. You can obtain astatement on the expected result for customer projects at an early stage.

Key figures for incoming orders are costs, revenues, and quantities that areexpected to arise from sales orders that are closed or changed in the currentperiod.

The open order value is the incoming order value reduced by the billingdocuments with revenue.

You can evaluate the expected result and key figures listed below in theproject information system and Profitability Analysis:

� Incoming order values� Order history� Open order value

A prerequisite for this function is that sales order values are recorded inthe project either from Sales and Distribution (SD) or through a BAPI fromexternal systems. Project-related incoming orders are determined on the basisof project planning for each billing element and recorded in the project.

Figure 170: Incoming Orders: Customizing


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In Customizing, you assign cost elements of the incoming order to the costelements in revenue and cost planning and the results analysis cost elements.

These have the following cost element categories:

� 50 Incoming orders: Sales revenues� 51 Incoming orders: Other revenues� 52 Incoming orders: Cost of sales

Use the PA transfer structure to assign incoming order cost elements to thevalue fields for profitability segments.

For incoming order values to be recorded in Profitability Accounting (CO-PA),you need to first include the Sales order history (SORHIST) in the operatingconcern and maintain the number range for transaction type I in CO-PA.

The SORHIST characteristic has the following configurations:

� New order: Includes cost element categories 50, 51, and 52 and is formedwhen you create sales orders for the billing element or the whole project

� Order changes: Includes the cost element category 50 and is formedwhen you make changes to sales orders (for example, to quantities orterms of payment)

� Cancellation: Includes cost element categories 50, 51, and 52 and isformed when you cancel all sales orders for the billing element or wholeproject

� Plan changes: Includes cost element categories 51 and 52 and is formedwhen you make internal changes to the cost structures of projects


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Figure 171: Incoming Orders: Example of Evaluation

The system creates an incoming order history, where the origins of incomingorders are sorted based on the following categories:

New orders, Order changes, Cancellations, Plan changes

The open order value is derived from the incoming order figure, after takinginto account revenues that are already billed and costs of sales.

You can evaluate costs and revenues for incoming orders or the open ordervalue and update this information to Profitability Analysis. The update is partof settlement and is regulated by the Processing type indicator. The followingprocessing types are available:

� O - Settlement of project-related incoming orders� P - Automatic actual settlement and settlement of project-related

incoming orders


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Exercise 32: Incoming Orders

Exercise ObjectivesAfter completing this exercise, you will be able to:� Carry out incoming order analysis

Business ExampleIncoming Order analysis can be used to evaluate costs and revenues forincoming orders or the open order value. This information can be updatedto Profitability Analysis during settlement. This enables you to obtain astatement on the expected result for customer projects at an early stage.

Task:Incoming Order Analysis:

Perform incoming order analysis for the current period for project T-100##.

1. From the period-end closing, access incoming order analysis usingindividual processing for project T-100##.

Project System menu: Financials→ Period-End Closing→ Single Functions→Incoming Orders → Individual processing.


Field Name ValuesWBS Element T-100##Calculation to month Current periodYear Current year

Test Run NoDetailed lists Yes

Execute the report.

Navigate to the detail list.

Choose Execute.



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Choose Next list level.

Review the list of order values for your project. Both the WBS elementsthat are assigned to sales orders are analyzed and listed. The valuecategory IONO indicates incoming order value for the period. The valuecategory OBRB indicates the open order value that is reduced by thebilling documents with revenue.

Open order value (revenues) = incoming order value (revenues) -revenues that affect the result.

Open order value (costs) = incoming order value (costs) - costs of sales.

Exit from the detail list and return to the main SAP menu.

Choose Exit.

2. Perform incoming order settlement for your turbine project using theindividual processing transaction in the period-end closing menu. Usethe settlement processing type to settle incoming orders.

Project System menu: Financials→ Period-End Closing→ Single Functions→Settlement → Individual processing.


Field Name ValuesProject Definition T-100##Settlement Period Current periodFiscal Year Current yearProcessing Type Project-related incoming ordersTest Run NoDetail list YesCheck trans. Data No

Execute the report.

Choose Execute.

Display the settled amounts by selecting Detail lists. You can select theReceiver, Sender, or Accounting documents for review. The incoming ordervalues have been settled to Profitability Analysis.




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Choose Exit.

3. Display the Profitability Analysis report IDES-085, which containsincoming order settled values. Note that all incoming orders for allparticipants are displayed in the report based on report characteristics.

Accounting menu:

Controlling→ Profitability Analysis→ Information Systems→ Execute Report.

If required, set Operating Concern IDEA, costing-based.

Select (click-on) report IDES-085.

Execute the report.

Choose Execute.

Select Yes in the message box for data selection.


Choose Exit.


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Solution 32: Incoming OrdersTask:Incoming Order Analysis:

Perform incoming order analysis for the current period for project T-100##.

1. From the period-end closing, access incoming order analysis usingindividual processing for project T-100##.

Project System menu: Financials→ Period-End Closing→ Single Functions→Incoming Orders → Individual processing.


Field Name ValuesWBS Element T-100##Calculation to month Current periodYear Current year

Test Run NoDetailed lists Yes

Execute the report.

Navigate to the detail list.

Choose Execute.


Review the list of order values for your project. Both the WBS elementsthat are assigned to sales orders are analyzed and listed. The valuecategory IONO indicates incoming order value for the period. The valuecategory OBRB indicates the open order value that is reduced by thebilling documents with revenue.

Open order value (revenues) = incoming order value (revenues) -revenues that affect the result.

Open order value (costs) = incoming order value (costs) - costs of sales.




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Choose Exit.

a)

2. Perform incoming order settlement for your turbine project using theindividual processing transaction in the period-end closing menu. Usethe settlement processing type to settle incoming orders.

Project System menu: Financials→ Period-End Closing→ Single Functions→Settlement → Individual processing.


Field Name ValuesProject Definition T-100##Settlement Period Current periodFiscal Year Current yearProcessing Type Project-related incoming ordersTest Run NoDetail list YesCheck trans. Data No

Execute the report.

Choose Execute.

Display the settled amounts by selecting Detail lists. You can select theReceiver, Sender, or Accounting documents for review. The incoming ordervalues have been settled to Profitability Analysis.


Choose Exit.

a)

3. Display the Profitability Analysis report IDES-085, which containsincoming order settled values. Note that all incoming orders for allparticipants are displayed in the report based on report characteristics.

Accounting menu:

Controlling→ Profitability Analysis→ Information Systems→ Execute Report.

If required, set Operating Concern IDEA, costing-based.



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Select (click-on) report IDES-085.

Execute the report.

Choose Execute.

Select Yes in the message box for data selection.


Choose Exit.

a)


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Lesson Summary

You should now be able to:� Maintain incoming orders� Evaluate incoming orders


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Lesson: Project Settlement

Lesson OverviewThe lesson describes the role of settlements in period-end closing. The lessonexplains the settlement concept and settlement rules and strategies. The lessonalso describes settlement structures.


� Explain the term settlements� Define settlement rules� Describe settlement structures

Business ExampleCosts and revenues are collected in projects only temporarily. They are settledto one or more receivers as part of period-end processing.

Settlement Aspects

Figure 172: Aspects of Settlement


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PLM230 Lesson: Project Settlement

Costs and revenues are collected in projects only temporarily. They are settledto one or more receivers as part of period-end processing.

In settlement, the actual costs (and, if required, revenues) incurred in acommercial object are allocated in whole or in part, to one or more receivers.Offset postings that credit the sender object are generated automatically.The debit postings assigned to the sender object remain after settlementis performed and can be displayed. The settled costs are updated to therespective receiver objects and displayed in reporting.

Figure 173: Settlement: Debit and Credit

Actual costs and actual revenues occur in a project or order as a result of:

� Material withdrawals and goods receipts� Vendor invoices� Customer billing� Internal activity allocations, transfers, cost distribution, process costs,

and overhead� Confirmation of network activities


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In settlement, costs/revenues are transferred to:

� Financial Accounting (G/L account)� Asset Accounting (fixed asset)� Cost Accounting/Profitability Analysis (order, cost center, and

profitability segment)� Project System (WBS element, network, and activities)

You need a settlement rule to perform settlement. You define the settlementrule in the sender object. The settlement rule contains distribution rules andsettlement parameters for a sender object.

Settlement Rules

Figure 174: Maintaining Settlement Rules

You can maintain the settlement rule for WBS elements or networks andactivities in an overview screen. Use distribution rules to specify theproportion of costs that should be settled to receivers. Costs can be distributedon the basis of:

� Percentages� Equivalence numbers� Fixed amounts


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There are two types of settlements, periodic and full:

� In periodic settlement, only the costs of the period for which you specifysettlement are settled.

� In full settlement, the costs for all the periods up to the one you specifyin settlement are settled.

If Customizing has been set accordingly, you can branch from the overviewscreen to a settlement rule parameters screen that is used to change thesettlement profile or structures on which it calls.

Figure 175: Generating the Settlement Rule for a WBS

As of Release 4.5, you can use a mass processing transaction to derivesettlement rules for WBS elements.


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Settlement rules for WBS elements are determined by various strategies. Youdefine these strategies in Customizing:

� Results Analysis is usually performed for billing elements in salesprojects. The resulting analysis data includes the costs and revenues oflower-level WBS elements and activities/orders. For this reason, only theResults Analysis elements are settled.

When the system derives settlement rules, it generates profitabilitysegments that contain the characteristic values of WBS elements and salesorders assigned to them.

Settlement rules and Results Analysis keys are only ever assigned tobilling elements. All other objects are assigned the settlement profileDo not settle.

� In the case of cost projects, the system can derive the settlement rule forWBS elements from the cost center or the requesting cost center.

� A settlement rule can also be passed from a higher-level WBS elementto its lower-level WBS elements. This can occur over several levels,but the rule can only be inherited by WBS elements that do not have asettlement rule of their own.

Figure 176: Determine Settlement Strategy for WBS Element

The settlement strategy for WBS elements can be used to automaticallydetermine a settlement rule.

The determination of the settlement profile and RA key is based onWBS-operative indicators for account assignment and billing element.


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In the IDES example, WBS elements that are not billing elements are assignedthe settlement profile 130002, which has the setting Not for settlement. Also, Noreceiver is assigned for the settlement rule for these WBS elements.

Settlement rules to the profitability segment are determined for the two billingelements in the IDES example. The Change in assignment of the organizationalunits indicator specifies that the settings are valid only if the assignments ofthe current object and the directly preceding object in the hierarchy differ inone of the following organizational units:

� Company code� Business area� Profit center

RA is executed for each billing element with an organizational change. Thisenables reserves and WIP to be calculated for each organizational unit.

The settlement strategy profile is assigned to the project profile.

Figure 177: Deriving Settlement Rules for Activities

You can define a strategy to determine the settlement rule innetworks/activities.


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In this strategy, you specify the sequence in which the settlement rule shouldbe determined:

� Use the settlement rule of the WBS element� Use the settlement rule of the project definition� Generate a settlement rule using the default rule� Generate a settlement rule for the WBS element� Manual maintenance of the settlement rule

Figure 178: Settlement Rules for Network Activities

A settlement strategy can be assigned to parameters for the network typeand plant.

The strategy determines the priority to assign the default settlement rule.

The strategy is executed left to right. The first successful settlement rule isassigned to the network or network activity based on the account assignmentobject.

If you use No settlement rule, costs are settled directly from the assigned WBSelement.


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Settlement Parameters

Figure 179: Multi-Level Settlement: Direct Settlement

In direct settlement, each object (WBS elements, networks, orders, andactivities) in a project is settled directly to a cost object not included in theproject, such as a profitability segment.

In multi-level settlement, activities, orders, and WBS elements are first settledto the top WBS element in the project. The top element then settles the costscollected.

Specify which of these you want to use when you maintain or determine thesettlement rule.

� Multi-level settlement is used for settlement to WBS elements of otherprojects or internal orders

� Direct settlement is used for the settlement of PS structures to receiversother than those specified above.

In customer projects, Results Analysis is performed before settlement.Settlement only settles the objects for which Results Analysis has beenperformed (WBS elements and orders with their own WIP). Orders and WBSelements without their own WIP should have a settlement profile set to Donot settle.


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Figure 180: Indicators in the Settlement Profile

The settlement profile is the central control parameter for settlement. Youenter it in the project profile or order type (network type). It then proposesthe settlement structure, PA settlement structure, and source structure fororders with this order type.

The settlement structure controls the assignment of source cost elementsto settlement cost elements for each receiver. You can also choose to settleby cost element.

The PA settlement structure controls the assignment of cost elements tovalues fields in Profitability Analysis (PA). It is required only to settle projectsdirectly to the operating result.

If you want to settle to various receivers according to the source cost elementsposted in the order, use the source structure technique.


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Figure 181: Settlement Structure

The settlement structure controls the conversion of cost elements to settlementcost elements. Settlement by original cost element is also possible.

To use the settlement structure, you need to create cost element groups thataggregate the primary and secondary cost elements used for debit postings toorders. In Customizing, link the cost element group to the settlement structurewith a settlement assignment. For each settlement assignment, specify byreceiver type if the settlement should use the original posted cost elements ora designated settlement cost element.

Similarly, the PA settlement structure controls the conversion of cost elementsto Profitability Analysis value fields. A PA settlement structure is requiredonly if you want to settle to a profitability segment.


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Figure 182: PA Settlement Structure

You define a PA settlement structure if you want to settle the costs andrevenues for a project to a profitability segment.

The PA settlement structure specifies the costs and revenues that should besettled to Profitability Analysis. It classifies debit cost elements by assignmentline and assigns assignment lines to value fields in an operating unit.

The PA settlement structure comprises one or more items (called assignmentlines).

Note that when defining a PA settlement structure:

� Each debit cost element should be represented in the PA settlementstructure.

� The category for debit cost elements is called Cost elements.

If you do not perform Results Analysis, the actual costs and revenues aresettled to the profitability segment for the project/WBS element. All costelements under which costs and revenues are recorded in WBS elementsshould be represented in the PA settlement structure.


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If you performed Results Analysis, the Results Analysis data (valuated actualrevenue, cost of sales, and reserves for imminent losses) is settled to theprofitability segment. All Results Analysis cost elements in which data thataffects Profitability Analysis is recorded should be represented in the PAsettlement structure.


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Exercise 33: Generating settlement rules

Exercise ObjectivesAfter completing this exercise, you will be able to:� Determine settlement rules and Results Analysis keys

Business ExampleYou will require Results Analysis keys and settlement rules for ResultsAnalysis, incoming orders, and settlement. You can manually enter thismaster data for WBS elements/activities or derive it in either individual orcollective processing. In this exercise, you will use the strategy method toautomatically generate the settlement rule and assign the Results Analysiskey to WBS elements.

Task:Determine the settlement rules for your project

1. In individual processing, determine the settlement rules for WBSelements in your T-100## project.


Financials→ Period-End Closing→ Single Functions→ Settlement Rule→Individual Processing

On the initial screen, enter the following data:

Field Name ValuesProject definition T-100##With hierarchy YesPeriod Current periodFiscal year Current yearTest run NoDetailed lists Yes

Execute the report.

Now go to the detail list.



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Choose Execute.


Information on settlement rules:

In the customer project, a profitability segment settlement rule wasgenerated for billing elements T-100## and T-100##.1.2. At the same time,the Results Analysis key 130001 was assigned for these WBS elements.Settlement rules were generated for other WBS elements, but a settlementprofile (130002 � Do not settle) was assigned. Results Analysis at thebilling element level includes all planned and actual values of lower-levelWBS elements, orders, and activities. Consequently, only the billingelement is settled.



2. Display the configuration of the strategy for the determination of thesettlement rule for both projects. The cost project I/00## uses projectprofile 0002, Cost projects. The customer project T-100## uses projectprofile 2000, Turbine standard.

Project System customizing → Costs → Automatic and periodic allocations→ Settlement → Settlement Rule for Work Breakdown Structure Element →Assign Strategy to Project Profile

Which strategy profile is assigned to the customer project?

10

3. Display the strategy for profile 10, customer projects. Which ResultsAnalysis key is assigned to billing elements?

Project System customizing→ Costs→ and periodic allocations→ Settlement→ Settlement Rule for Work Breakdown Structure Element → DetermineStrategy for Settlement Element

The Results Analysis key 130001 is assigned for billing WBS elements.

What is the purpose of the Order change indicator. Is this indicatorrelevant for project T-100##. Why?

The purpose of the Order change indicator is to specify that iforganizational units change within the project structure, a settlementrule and RA should be assigned at that level. This is relevant to theT-100## project, because WBS T-100##.1.2 is assigned to company code2000. This indicates that company code 2000 creates its own RA andsettlement rules.


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Solution 33: Generating settlement rulesTask:Determine the settlement rules for your project

1. In individual processing, determine the settlement rules for WBSelements in your T-100## project.


Financials→ Period-End Closing→ Single Functions→ Settlement Rule→Individual Processing

On the initial screen, enter the following data:

Field Name ValuesProject definition T-100##With hierarchy YesPeriod Current periodFiscal year Current yearTest run NoDetailed lists Yes

Execute the report.

Now go to the detail list.

Choose Execute.


Information on settlement rules:

In the customer project, a profitability segment settlement rule wasgenerated for billing elements T-100## and T-100##.1.2. At the same time,the Results Analysis key 130001 was assigned for these WBS elements.Settlement rules were generated for other WBS elements, but a settlementprofile (130002 � Do not settle) was assigned. Results Analysis at thebilling element level includes all planned and actual values of lower-levelWBS elements, orders, and activities. Consequently, only the billingelement is settled.




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a)

2. Display the configuration of the strategy for the determination of thesettlement rule for both projects. The cost project I/00## uses projectprofile 0002, Cost projects. The customer project T-100## uses projectprofile 2000, Turbine standard.

Project System customizing → Costs → Automatic and periodic allocations→ Settlement → Settlement Rule for Work Breakdown Structure Element →Assign Strategy to Project Profile

Which strategy profile is assigned to the customer project?

10

a)

3. Display the strategy for profile 10, customer projects. Which ResultsAnalysis key is assigned to billing elements?

Project System customizing→ Costs→ and periodic allocations→ Settlement→ Settlement Rule for Work Breakdown Structure Element → DetermineStrategy for Settlement Element

The Results Analysis key 130001 is assigned for billing WBS elements.

What is the purpose of the Order change indicator. Is this indicatorrelevant for project T-100##. Why?

The purpose of the Order change indicator is to specify that iforganizational units change within the project structure, a settlementrule and RA should be assigned at that level. This is relevant to theT-100## project, because WBS T-100##.1.2 is assigned to company code2000. This indicates that company code 2000 creates its own RA andsettlement rules.

a)


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Exercise 34: Settlement

Exercise ObjectivesAfter completing this exercise, you will be able to:� Execute the settlement of a sales order

Business ExampleSettlement is used to transfer the results of Results Analysis (RA) andIncoming Order Analysis to Profitability Analysis and post the reservesor balances determined in RA to Financial Accounting. Only billing WBSelements are settled, because their results include planned and actual valuesfrom their subordinate WBS elements and activities.

Task:Review project settlement rules and execute the settlement of the sales orderfor the turbine project.

1. Access the project builder to display the settlement rules that weregenerated for project T-100##.




Branch to the detail screen for billing elements T-100## and T-100##.1.2..

Double-click the WBS element.

Right-click and select Settlement Rule (this is context-sensitive. Thecursor should be positioned in the detail screen and not the hierarchy).

Note the settlement rule to the profitability analysis.

Display the settlement parameters.

GOTO → Settlement Parameters

Record the settlement profile, allocation structure, and PA transferstructure to be used by the settlement program.

Settlement profile ____________________________

Allocation Structure ____________________________



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PA transfer structure ____________________________

Exit the settlement profile and project builder and return to the mainSAP menu.

Choose Exit twice.

2. Perform project settlement for the turbine project using the individualprocessing transaction within the period-end closing menu.


Financials → Period-End Closing → Single Functions → Settlement →Individual processing


Field Name ValuesProject Definition T-100##Settlement Period Current periodFiscal Year Current yearProcessing Type AutomaticTest Rum NoDetail list YesCheck trans. Data No

Execute the report.

Choose Execute.

Display the settled amounts by selecting Detail lists. From the display,you can select the Receiver, Sender, or Accounting documents for review.There are two views of the detail list, Accrual Data for FI and List ofSettled Values.

Exit the detail list and return to the main SAP menu.

Choose Exit.


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Solution 34: SettlementTask:Review project settlement rules and execute the settlement of the sales orderfor the turbine project.

1. Access the project builder to display the settlement rules that weregenerated for project T-100##.




Branch to the detail screen for billing elements T-100## and T-100##.1.2..

Double-click the WBS element.

Right-click and select Settlement Rule (this is context-sensitive. Thecursor should be positioned in the detail screen and not the hierarchy).

Note the settlement rule to the profitability analysis.

Display the settlement parameters.

GOTO → Settlement Parameters

Record the settlement profile, allocation structure, and PA transferstructure to be used by the settlement program.

Settlement profile ____________________________

Allocation Structure ____________________________

PA transfer structure ____________________________

Exit the settlement profile and project builder and return to the mainSAP menu.

Choose Exit twice.

a)

2. Perform project settlement for the turbine project using the individualprocessing transaction within the period-end closing menu.


Financials → Period-End Closing → Single Functions → Settlement →Individual processing



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Field Name ValuesProject Definition T-100##Settlement Period Current periodFiscal Year Current yearProcessing Type AutomaticTest Rum NoDetail list YesCheck trans. Data No

Execute the report.

Choose Execute.

Display the settled amounts by selecting Detail lists. From the display,you can select the Receiver, Sender, or Accounting documents for review.There are two views of the detail list, Accrual Data for FI and List ofSettled Values.

Exit the detail list and return to the main SAP menu.

Choose Exit.

a)


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Lesson Summary

You should now be able to:� Explain the term settlements� Define settlement rules� Describe settlement structures


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Lesson: Schedule Manager

Lesson OverviewThis lesson focuses on understanding the method to schedule tasks. It lists thetasks that can be created using the schedule manager. It also explains how toschedule an object list using the schedule manager.


� Identify tasks that can be created using the schedule manager� Schedule an object list using the schedule manager

Business ExampleAs an employee of a company, you are asked to schedule jobs in the systemqueue using the schedule manager.

Schedule Manager Overview

Figure 183: Schedule Manager: Overview


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PLM230 Lesson: Schedule Manager

The Schedule Manager is available as of Release 4.6. It is a user-friendly toolthat enables you to plan and edit all period-end closing actions performed inthe SAP R/3 Enterprise.

The top organizational object in the Schedule Manager is the task list, which isa hierarchical representation of tasks from various applications (for example,FI-GL, CO-OM, CO-PC, PS, CO-PA, and EC-PCA).

There are various tasks, such as:

� ABAP reports (for example, Generate Settlement Rules in CollectiveProcessing)

� Transactions (for example, Set Period Lock)� Memory joggers (for example, the note Upon completion, inform those

involved)� Flow definitions

You schedule tasks in the task list (reports and flow definitions) by draggingthem to the calendar.

The flow and worklist monitor enables you to detect, analyze, and correcterrors. When you restart the procedure, records that contained errors arereprocessed.

Figure 184: Task List and Flow Definition


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The task list forms a hierarchical folder structure. It is used to map period-endclosings in the SAP R/3.

You can create task groups by right-clicking. A typical task group containsall tasks for the period-end closing of a specific area (such as FI, CO-OM,CO-PC, or PS).

You can create the following tasks:

� Transactions: Called up online through the Schedule Manager. Forexample, call the Structure information system.

� ABAP reports (for example, use the F4 help to display a list of allreports for period-end closing in the R/3 Enterprise. You can also enterother ABAP reports as tasks. For example, one-time determination ofsettlement rules for projects.

� Flow definitions: Created using the Workflow Builder and contain aseries of individual procedures that should be consecutively started inthe background.

You can change the individual procedures in the Workflow Builder bydouble-clicking.

For example, the flow definition PS periodic procedures contains thefollowing individual procedures:

(a) Template allocation before (b) application of overheads before (c)interest calculation before (d) results analysis before (e) determination ofvalue of incoming orders before (f) settlement.


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Figure 185: Schedule Manager: Scheduling

You schedule tasks in the task list (reports and flow definitions) by draggingthem to the calendar.

If you schedule for time in the past, you can start immediately.

When the workflow is complete, the user assigned to the step Check objectreceives a workflow mail. From the Office inbox, the user can:

Restart the flow definition (only the records that contain errors arereprocessed)

Complete the scheduled flow definition (status change)


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Job Monitor and Worklist

Figure 186: Job Monitor and Object List

The job monitor and object list enable you to detect errors.

You can call up the master data from the object list to correct errors.

For example, revise the costing sheet for application of overheads andtemplate allocation.

You can call up reports to check the values of periodic procedures.

You can manually change the flow status. For example, the object list showsan error in the application of overheads to activity 1200. You may decide toskip the application of overheads to activity 1200 during the next run becausethe values are negligible.

You can restart the flow definition after the error is corrected. Only recordsthat contain errors are reprocessed during the second run (this enhancesperformance).


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Lesson Summary

You should now be able to:� Identify tasks that can be created using the schedule manager� Schedule an object list using the schedule manager


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Unit Summary PLM230

Unit SummaryYou should now be able to:� Understand the concepts of period end closing� Describe the process of overhead calculation� Understand the role of interest calculation in project cost� Understand the process of cost forecast in project accounting� Understand the process of progress analysis in project accounting� Understand the concepts of results analysis� Identify the different customization that can be performed in results

analysis� Identify the different techniques of result analysis� Maintain incoming orders� Evaluate incoming orders� Explain the term settlements� Define settlement rules� Describe settlement structures� Identify tasks that can be created using the schedule manager� Schedule an object list using the schedule manager


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Test Your Knowledge

1. Template environment is used for networks while is usedfor WBS elements.Fill in the blanks to complete the sentence.

2. What postings are generated for the overhead calculation process?

3. You cannot calculate planned interests using the to the day method.Determine whether this statement is true or false.□ True□ False

4. Remaining costs are determined only as of the first day of the currentperiod.Determine whether this statement is true or false.□ True□ False

5. What are the report types for which progress analysis values areavailable?

6. The Result Analysis process can determine only the Percentage OfCompletion (POC) and not the Work-In-Progress (WIP)Determine whether this statement is true or false.□ True□ False


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7. Results Analysis records Results Analysis data in the billing element orWIP element under secondary cost elements.Fill in the blanks to complete the sentence.

8. If a method of apportionment cannot be used, where does the systemlook for an alternative method of apportionment?

9. The open order value is the incoming order value minus thedisplayed in the billing documents.

Fill in the blanks to complete the sentence.

10. The value is derived from the incoming orderfigure after taking into account the value of revenues already billed andcosts of sales.Fill in the blanks to complete the sentence.

11. The settlement rule contains distribution rules and settlement parametersfor a sender object.Determine whether this statement is true or false.□ True□ False

12. Settlement rules can be inherited by only those WBS elements that do nothave a settlement rule of their own.Determine whether this statement is true or false.□ True□ False

13. The PA settlement structure classifies debit cost elements by assignmentline and assigns assignment lines to value fields in an operating unit.Determine whether this statement is true or false.□ True□ False


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14. How are flow definition tasks created?

15. Master data can be called from the object list to correct errors.Determine whether this statement is true or false.□ True□ False


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Answers

1. Template environment 004is used for networks while 005is used forWBS elements.

Answer: 004, 005

2. What postings are generated for the overhead calculation process?

Answer: Overhead expenses are charged to cost objects and the costcenter is credited.

3. You cannot calculate planned interests using the to the day method.

Answer: False

To calculate planned interests, you can use the to the day method and theby period method.

4. Remaining costs are determined only as of the first day of the currentperiod.

Answer: False

You have the option to specify a date for the cost forecast.

5. What are the report types for which progress analysis values areavailable?

Answer: The report types for which progress analysis values areavailable are structure-oriented report, drill-down hierarchy report, andReport Painter report.

6. The Result Analysis process can determine only the Percentage OfCompletion (POC) and not the Work-In-Progress (WIP)

Answer: False

Results Analysis can determine WIP.


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7. Results Analysis records Results Analysis data in the billing element orWIP element under secondary cost elements.secondary

Answer: secondary

8. If a method of apportionment cannot be used, where does the systemlook for an alternative method of apportionment?

Answer: The system searches for alternative apportionment inapportionment numbers, cumulative actual costs, planned costs, andapportionment numbers with apportionment numbers per line ID = 1.

9. The open order value is the incoming order value minus the revenuedisplayed in the billing documents.

Answer: revenue

10. The open order value is derived from the incoming order figure aftertaking into account the value of revenues already billed and costs of sales.

Answer: open order

11. The settlement rule contains distribution rules and settlement parametersfor a sender object.

Answer: True

The settlement rule contains distribution rules and settlement parametersfor a sender object.

12. Settlement rules can be inherited by only those WBS elements that do nothave a settlement rule of their own.

Answer: True

Settlement rules can be inherited by only those WBS elements that do nothave a settlement rule of their own.


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13. The PA settlement structure classifies debit cost elements by assignmentline and assigns assignment lines to value fields in an operating unit.

Answer: True

The PA settlement structure classifies debit cost elements by assignmentline and assigns assignment lines to value fields in an operating unit.

14. How are flow definition tasks created?

Answer: Flow definition tasks are created using the WorkflowBuilder. They contain a series of individual procedures that should beconsecutively started in the background.

15. Master data can be called from the object list to correct errors.

Answer: True

Master data can be called from the object list to correct errors.


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PLM230 Course Summary

Course SummaryYou should now be able to:

� Plan project costs using networks and assigned orders.� Plan revenue using sales orders and the Dynamic Items Processor.� Explain the benefit and use of project stock.� Manage commitments for a project.� Post actual costs to a project.� Post actual revenue to a project.� Execute Period-end closing processes for a project and assigned orders.


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Course Summary PLM230


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Appendix 1Additional Information

This appendix contains information on some topics that are not covered indetail in PLM230.

Figure 187: OPEN PS for MS Project

Open PS offers the following options:

Create projects in Microsoft Project (MSP) and transfer them to SAP PS

Create projects in SAP PS and transfer them to MSP


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Appendix 1: Additional Information PLM230

Change projects and transfer them in both directions

Open PS is based on the External Project Software (EPS) interface. Use thisinterface to export project structures to external software and import it back.

SAP delivers Open PS for Release 4.5 and 4.6 systems. It creates a concretelink with Microsoft Project. You must have Microsoft Project 98, Version SR-1US installed on your PC.

You can download Open PS from the Internet. SAPNet contains a briefdescription of Open PS for Microsoft Project. You can download the programand its documentation from there.

Call up SAP�s Internet page and add "/ps" to branch to the Project Systempage. http://sapnet.sap.com/ps

Go from there to the EPS 4,0 interface and jump to Open PS for MicrosoftProject.

Notes 180418 and 144467 describe how to install Open PS.

Figure 188: Planning Integration: Cost Centers and Projects

With planning integration, you can transfer planned project data created atthe same time as planned cost center data to cost centers. It is not necessary tocreate more data for the receiver cost center.

Activate planning integration using the project profile. Your projects arethen plan integrated. In addition, stipulate in the planning version whetherplanning integration between cost centers and projects is active.


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PLM230 Appendix 1: Additional Information

If activity input is planned for a plan-integrated project, the scheduled activityis updated to the sender cost center. The total planned costs are furtherallocated to a receiver center using planned periodic settlement.

The planned data from plan-integrated projects, together with the planneddata from the cost center, are passed on to Profit Center Accounting.

Networks are not integrated with planning at this time because the changesin cost center planning which would arise from network rescheduling areconsidered undesirable.

Figure 189: Transfer Prices

As of Release 4.5A, it is possible to update the legal valuation, businessvaluation, and profit center valuation for cost objects.

Differences between the valuations occur in situations where materialmovements take place across several Profit Centers or even company codes.

For example, production in a different plant (assigned to a different ProfitCenter).

For example, product purchased from a company other than your own.

Whereas the legal view valuates a material to be delivered with costs inaccordance with the valuation (for example, standard costs), a transfer pricecan be used in the Profit Center view. If a delivery takes place between


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different companies, the legal valuation takes account of the profits madeby the companies involved; this intercompany profit is not taken intoconsideration in the group view.

In Customizing, two additional plan versions for planned and actual valuesare created alongside the plan/actual version 0; one version for the ProfitCenter and one for the group valuation.

Figure 190: Pricing in Sales Document (SD) (1)

All the condition types possible in pricing are determined in the costing sheet.

In the costing sheet, you can also specify the terms under which the individualconditions should be taken into account.

You can also stipulate the sequence in which the conditions are set in thebusiness document.

The costing sheet allows you to create any interim gross and net totals youwant.

You can flag condition types in the costing sheet as statistical.


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Figure 191: Pricing in Sales Document (SD) (2)

Figure 192: Revenue Account Determination

In the standard system, you can make account determination dependent onthe following:


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Chart of accounts: A chart of accounts is a systematic classification of all themaintained accounts. More than one company code can use the same chartof accounts.

Sales organization

Customer account assignment group: You can use account assignment groupsto group customers together for account assignment purposes.

Material assignment group: You can use account assignment groups to groupmaterials together for account assignment purposes.

Account key: You can use account keys to group condition types together foraccount assignment purposes.

Figure 193: Assembly Processing: Pricing via Costing

In the diagram, condition type EK02 is selected for sales document type PS1(standard PS order). Pricing is based on condition type PR00. The values forcosting are recorded under condition type EK02 and used for informationpurposes (in the example, to show a contribution margin).

With resource-related billing, the lines items posted in the project are used asa basis for sales price determination. Condition type EK01 is used to specifythat invoices are created on the basis of realized actual costs.


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Figure 194: FI/CO/MM Postings: Standard Price Control

This diagram summarizes the postings that are demonstrated during theproduction of T-20600.

During the goods receipt of the purchased materials, the Stock account isdebited for the inventory value (dynamic standard value for project stock),and the clearing account is credited for the purchase order value. Anyvariance is debited or credited to the Price Difference Account. If furthervariances occur during the Invoice Receipt, they are also debited or credited tothe Price Difference Account.

As the inventory is issued to the production order, the Stock account iscredited, and a P&L account for Material Consumption is debited. In addition,the production order is debited for the inventory value.

Further debits to the production order occur during the production orderconfirmations.

During the Goods receipt of the production material, the Stock accountis debited for the inventory value (dynamic standard value for projectstock), and the P&L account for Factory output is credited. In addition, theproduction order is credited for the inventory value.


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During production order settlement, any variances that occurred duringproduction are posted to the Production variance account, and the FactoryOutput account. In addition, the production order is debited or credited forthe variance.

If desired, the price variance accounts can be established as Primary CostElements. This would enable the variance postings for Project Stock to bereflected on the Project. A separate valuation class for project stock may bemaintained on the material master for this purpose. Variance postings forcollective stock are not normally reflected in Controlling.

Figure 195: FI/CO/MM Postings: Moving Average Price Control

If the materials are managed using Moving Average Price control, the full costof the procurement transaction is assigned to the Stock Account. This wouldoccur during goods receipt, invoice receipt, and production order settlement.

Note (*): With moving average price control, if during the settlement ofproduction order variances or the posting of the invoice variances, the totalstock quantity on hand is less than the receipt quantity, the portion of thevalue that cannot be assigned to the stock will be assigned to the pricevariance account.


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Figure 196: CATS - Customizing Using Data Entry Profiles

Maintain the data entry profiles in Customizing.

The data entry profile determines how time data is entered and (by means ofthe field selection for receivers) the modules to which activity data is updated.


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Figure 197: CATS - Field Selection

Field selection determines which of the many fields in the worklist and dataentry screen groups are displayed or accept input.

Field selection can be controlled in accordance with the data entry profile field.

Keep the field selection as simple as possible and do not include anyunnecessary fields. All possible receivers and activities should appear for aperson or group of persons. For example, if a person carries out activities forboth a network and a receiver cost center, both receivers should be includedin the field selection.


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Figure 198: Progress Analysis: Initial Screen

Description:

If you want to control your project effectively, you need to do more thanlook at costs, resources, and schedules separately. You can draw informedconclusions as to the progress and current status of your project if youcompare these values with the results actually achieved.

Progress analysis enables you to do just that. It is suitable both for the internalcontrol of a project and for performance reports to the ordering party.

Legend :

SV = Schedule variance (BCWP - BCWS)

CV = Cost variance (BCWP - Actual costs)


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Figure 199: Progress Analysis: Calculation

As the project progresses, you enter plan and actual data, such as costs, foryour project.

These values are displayed in the appropriate object.

As part of progress determination, the system:

Determines the planned and actual POC, based on defined rules and POCsestimated manually

Calculates the BCWS and BCWP, referencing a base factor (planned costsand budget)

To arrive at an earned value, the POC is usually multiplied by a planningfactor, such as the budget or the original plan.


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Figure 200: Progress Analysis: Aggregation

Planned and actual progress values are calculated for networks, WBSelements, and orders assigned to the project using suitable methods.

The system uses weighting factors to aggregate these progress values in theproject structure.

These weighting factors are defined manually, or calculated by the systemusing suitable key figures.

In most cases, the project cost plan is used as a weighting factor, as it exists forall objects (activities, orders, and WBS elements).

In the diagram, the WBS elements have progress values of 35% and 50%. Sincethe weighting factor of the first WBS elements is twice that of the second one,the aggregated progress value of the top WBS element is 40%.


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The POC and the earned value are important project key figures. You cananalyze them at the level of individual project elements, or aggregated for thewhole project/subproject. Like other project key figures, the progress analysisvalues are available in the following report types:

Structure-oriented report on progress analysis

Drilldown hierarchy report

Report Painter or Report Writer reports

You can use the structure overview to evaluate the POC and earned valuetogether. The system displays the values in line with the project hierarchy.You can use the structure overview to evaluate the POC and earned value inthe following configurations:

Aggregated, not aggregated, not corrected, corrected

From the hierarchical display, you can navigate to a project object in the periodbreakdown and to the graphical display.


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In the hierarchy reports, you can evaluate the earned value with other relevantvalues in progress analysis. Standard reports include:

Progress analysis 12EVA1 (hierarchical overview of the following values):

- BCWS (original value) accumulated up to the current period

- Planned costs, accumulated up to the current period

- Overall plan, planned costs accumulate over the whole project duration

- BCWP (original value)

- Actual costs

- Cost variance, cost index, schedule variance

- ETC, EAC

Progress analysis detail 12EVA2 (comparison of aggregated/not aggregatedvalues)

- BCWS, BCWS (corrected)

- Planned costs

- BCWP, BCWP (corrected)

- Actual costs


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- Cost variance

- Cost index

- Work variance

Figure 203: Values in Progress Analysis

The values shown in the diagram are calculated as part of progress analysisand offer starting points for report evaluation. As the project is executed, thevalues are calculated left to right, as shown.

The system calculates the POC in line with the measurement method, eitherdefined in the individual object or entered as a default for the object type inCustomizing. Both planned and actual values are calculated.

The budgeted cost of work scheduled (BCWS) and budgeted cost of workperformed (BCWP) are calculated by multiplying the POC by the basisstipulated in advance (planned costs or budget).

Comparing them with the actual costs (actual cost of work performed[ACWP]), you calculate variance values (schedule variance and cost variance),a variance index, and the costs you expect to incur between now andcompletion of the project (estimate to completion [ETC]).


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Figure 204: Selecting Measurement Methods for WBS Elements and Networks

The diagram illustrates how the system determines which measurementmethod to use.

Figure 205: Measurement Method Selection Guide

The diagram contains recommendations for which methods should be usedfor which objects.


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Figure 206: Maintaining Progress Versions

Define in the progress version the control data used to calculate the percentageof completion (POC) and the earned value.

You must first go to customizing and define a progress version.

We recommend using the standard delivered progress version as a reference.


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Figure 207: Customizing: Measurement Methods

In this step, you stipulate the measurement methods used to determinethe POC. The measurement method consists of a measurement techniqueprescribed by the SAP system and other parameters, such as a start POC.

Example:

The following measurement methods are determined for the start-finish ruletechnique:

0-100 method, with a start POC of zero.

20-80 method, with a start POC of 20.

With the Estimation technique, you enter the POC manually in the WBS ornetwork.

You enter a maximum POC and a short ID. For as long as an activity is notfinished (you do not know when it will be finished) the actual POC cannotexceed the maximum POC. The aim of the maximum POC is to ensurethat activities that are almost complete are not overvalued. In the case ofestimation, SAP recommends a maximum POC of 80%.


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Figure 208: Customizing: Maintain Default Measurement Methods

Define the measurement methods to calculate the POC as a default value forthe various object types in the Project System.

The settings are per controlling area.

The measurement method defined here is a default value and can be changedin object master data maintenance. The system only displays the measurementmethod in the detailed data for the object if you maintain a progress version.


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Figure 209: Customizing: Measurement Methods for Orders

Define the measurement methods used to calculate the POC for the ordersassigned to the project. The settings are per controlling area.

You cannot change the measurement methods in order master datamaintenance.


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Figure 210: Customizing: Statistical Key Figures

Stipulate the statistical key figures under which the system is to update thePOC calculated. You need to assign statistical key figures so that you canevaluate the POC in reporting and update it to Profitability Analysis.

The values are updated as follows:

� Aggregated� Not aggregated� Relevant for Profitability Analysis

We deliver the following key figures as standard:

Stat.KF Usage10 Aggregated20 Not aggregated30 Relevant for Profitability Analysis


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Figure 211: Information Systems in PS

You can use the following information systems to evaluate important keyfigures for your projects:

� Structure/Date Information System� Costs/Revenues/Payments (Controlling) Information System, with

hierarchy reports, cost element reports, and the ABAP List Viewer forline items

� Capacity analysis� Order report, lists of reservations, purchase requisitions, and purchase

orders pertaining to the projects� Stock/requirements overview

You can report across projects using

� Project summarization� SAP-EIS� Profit Center Accounting� Profitability Analysis


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Figure 212: Information Systems: Level of Detail

In Profitability Analysis, reporting is performed at the profitability segmentlevel.

Reporting is based on value fields and characteristics. The reporting tools usedare called drilldown reports. You can evaluate project data and productiondata together.

In Profit Center Accounting, reporting is based on profit centers and the profitcenter hierarchy. You can execute reports here that enable you to monitorsuccess in your organizational structure.

You can use SAP EIS to evaluate logistical and accounting key figuresacross projects. Reporting is performed using drilldown reports. Definecharacteristics of your choice based on your project master data (project type,business area, or person responsible for project, for example).

Hierarchy reports are drilldown reports for evaluating the costs, revenues andpayments of one or more projects. Reporting is based on value categories. Youcan drilldown on the basis of various characteristics, and you can go to lineitems and documents.

Cost element reports enable you to evaluate project costs and revenues,using a cost-element-based display. In addition, the report display in Excelis interactive.


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Line item reports enable you to evaluate line items and documents. Columnscan be selected, subtotals are displayed, and you can go to all accountingdocuments.

The Structures/Date Information System enables you to evaluate objects aswell as logistical and accounting key figures. You can edit (change, create)objects from the information system, you can select columns, a wide selectionof functions are available.

Figure 213: Evaluation in Hierarchy Reports

The Costs/Revenues/Payments hierarchy reports enable you to evaluate yourPS data interactively. It can evaluate the dataset using existing criteria. Eachreport contains a wide range of lists that you can access interactively. Thehierarchy reports include user-friendly functions that enable you to workonline in these lists.

Using the drilldown functions, you can navigate from the basic list to thevarious levels in the report. You can also change the sequence of characteristicsas you go. You can select individual elements and analyze costs in greaterdetail using drilldown lists.

Examples:

Displaying all of the planned costs of a project

Displaying the planned costs of WBS element WBS-2 only


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Displaying the planned costs of WBS element WBS-2, value category 620, inperiod 10 / 2000

Other features available in hierarchy reports:

Sort columns, define exceptions, display in different currencies, expandor collapse various levels of the hierarchy structure, and display resultsgraphically.

Export data to MS Word, MS Excel, or to a local file; send/print out the report.

Go to other reports.

Figure 214: Branching to Other Reports

From the basic list or the drilldown lists of the drilldown report, you can goto other reports of different types (for example, cost element reports or lineitem reports).

The standard system supports predefined navigation options to cost elementreports and line item reports. You can copy this report-report interfacewhen you create reports of your own. You can also define other navigationoptions to standard reports and user-defined reports when you maintain thedrilldown report (sender/receiver list).

Once you have executed the report, you can select fields, and navigate to otherreports by choosing the Goto menu.


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For example, drill down from the cost structure to itemized cost elementsand individual documents.

Figure 215: Cost Element Reports

Cost element reports display costs by cost element. You use the Report Painterto create cost element reports.

As of Release 4.6, there is a hierarchical structure on the left where you canselect objects interactively. When you select an object, the costs of that object,broken down by cost element, are displayed on the right side.

As of Release 4.6, you can output this report in Excel and Lotus format. Forexample, you may want to use it as a spreadsheet to calculate average values.

Important features of cost element reports include:

You can export the report in various formats (including Excel, HTML, DBASE,and WK1)

Graphical evaluation

You can send the report to other people

You can select values, and navigate to other reports (for example, to the lineitem report where you can display original documents)

Sort function


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Filter function

You can display the report in different currencies

Refresh function (for displaying changes made)

Figure 216: ABAP List Viewer (ALV) for Line Items

All line items are evaluated using the ABAP List Viewer. This tool standardizesand simplifies the procedure for working with lists in the SAP R/3.

Important features of the ABAP List Viewer include:

Flexible column selection (you can even specify that information is to bedisplayed over two or three lines)

Automatic optimization of column width

Sort and filter functions (column-based)

Print function

Calculation of totals and subtotals

You can export data to MS Excel or to a local file

You can display the original document as well as the account documents forthe original document

You can save your settings as a (user-specific or generally applicable) displayvariant.


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When you call up or display the report, you can select various display variants.

Figure 217: Project Summarization: Inheritance

In project summarization, you can evaluate costs, revenues, and paymentdata across projects.

Summarization hierarchies form the basis for project summarization. InCustomizing, you can define as many of these hierarchies as you require. Youdefine summarization hierarchies using master data characteristics of theWBS elements or activities.

Example of a summarization hierarchy (in IDES: 1301)

Level 1 is always the controlling area

Level 2 is the Project type field (customer projects, investment projects, costprojects, and so on)

Level 3 is the Person responsible field (Smith, Green, Johnson, and so on)

During an inheritance run, the characteristic values of higher-level WBSelements are passed on to any lower-level WBS elements and activities thatdo not have any characteristic values of their own.


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Figure 218: Project Summarization: Summarization and Evaluation

During the summarization run, the key figures of the project (costs, revenues,and payment data) are totaled up for the various nodes in the summarizationhierarchy.

Once the summarization run has been completed, you can use summarizationreports to analyze the quantity structure (objects at a summarization node)and values throughout the entire summarization hierarchy.

You can also use the Structure Information System or Controlling InformationSystem to display selected projects in the order of the summarizationhierarchy.


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Figure 219: Project Views

The Project System logical database (PSJ) forms the basis for reporting in theinformation system. You can display the data retrieved from the database in arange of different views (for example, the project structure view, or a profitcenter hierarchy view).

Define a hierarchy type for each view and, if necessary, define a hierarchy or aset for summarization. A user exit is available for defining views of your own.

You can use the Structure Information System and the Controlling InformationSystem to display data in the above-mentioned views.

Examples:

Evaluating the cost plan/actual costs/planned and actual work in the hierarchyof the investment program. You would use the Structure Information Systemfor this.

Advantage: You can display key figures relating to both Logistics andControlling.

Advantage: You can edit all objects - even the investment program - from theinformation system.

Evaluating project costs and revenues in the profit center hierarchy. Youwould use the Controlling Information System for this.

Advantage: You can drill down to line items and original documents.


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Figure 220: Project Controlling: Enterprise Controlling

Whereas project controlling involves planning and monitoring one or moreprojects, Profitability Analysis and Profit Center Accounting are used fordifferent purposes.

Profitability Analysis allows you to monitor the external market andindividual market segments. In Profitability Analysis, reporting is performedon the basis of profitability segments. Project data is posted to ProfitabilityAnalysis when you settle a project.

Profit Center Accounting allows you to monitor the success of your company�sorganizational units. Reporting is performed at the profit center level. Projectdata can be posted to Profit Center Accounting if data is written to a profitcenter document when CO and FI postings are made to the project.


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Figure 221: Profit Center Accounting

Profit Center Accounting is an additional view of all the documents postedin FI and CO. It compares the overall costs of the business or parts of thebusiness with the revenues and internal activities for a period. It helps youcalculate internal operating profits, and offers an internal view of how wellyour business is doing.

The costs and revenues are borne by objects such as cost centers, internalorders, WBS elements, network activities, production orders, sales orders,operating concerns, and so on. The objects are assigned to a profit center intheir respective master data.

The data is duplicated in a separate document, classified by profit center, andstored in a separate database. You can use the statistical update for profitcenters in both CO-PA and Profit Center Accounting, thereby obtainingalternative views of your company results.


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Figure 222: Business Information Warehouse (SAP BW) (1)

The SAP Business Information Warehouse (BW) enables you to evaluatecompany data across applications and across systems. The interface used forreporting is the MS Excel interface. The SAP BW is a product that is differentfrom the SAP R/3.

Both SAP R/3 Systems and non-SAP systems can be used as data sources forthe BW. Data transfer is triggered and monitored via the BW. The data transferprocess is, to a large extent, automated.

The Business Information Warehouse has a data base that is completelyseparate from the systems that originally supply the data. It is possible topreconfigure metadata from SAP R/3 Systems. It is, however, also possibleto import application data from other systems, and to store this data in amultidimensional database.

The BW database is a powerful, yet easy-to-use, reporting tool. Powerful,thanks to the relational OLAP (online analytical processing) processor, anduser-friendly in that the Excel interface is used to evaluate and present data.Instead of Excel, you can use other application interfaces if you wish (OLEDB and HTML interfaces).

Glossary of important terms

OLTP = Online Transaction Processing (source system for application data)

ODS = Operating Data Storage (unstructured data from the source systems)


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InfoCubes = Structured data for reporting (derived from ODS data)

Metadata Repository = Information on how data is interrelated

OLE DB = Object Link Enabling Database

(interface to another reporting software package).


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IndexAAccount assignmentcategory, 106

Account AssignmentCategory, 98

Activity account assignment,34

Activity-assigned networks,34

Activity-based costing, 57BBilling milestones, 114Billing plan, 114Billing plan type, 341Billing rule, 341CCollective stock, 215Commitment item, 258Commitment values, 178Confirmations, 296Controlling (CO) planversions, 69

Controlling objects, 245Cost forecast, 443Cost Object Controlling, 413Costing sheet, 60Costing variant, 31Cross Application TimeSheet (CATS), 286

Customizing, 494DDIP profile, 125Direct procurement, 152

Dynamic Item Processor, 118EEasy cost planning, 65Externally processedactivities, 43

FFunds Commitments, 250HHeader-assigned networks,33

Hierarchical planning, 113IIncoming orders, 493Interest indicator, 433Interest profile, 433Internal activities, 41Invoicing plan, 46Item category, 101Item category group, 102MMaterial determination, 384Milestones, 345NNetwork (NWA), 4Non-stock components, 153Non-valuated project stock,180

OOrder category, 27Order types, 27


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Index PLM230

Overhead Cost Controlling,412

Overhead costing sheet, 59PPartial invoice, 348Percentage Of Completion(POC), 445

Planned costs, 37Project billing, 344Project Builder, 8Project stock, 175Project System, 413Project versions, 69Purchase requisitions, 291RRequirements class, 103Requirements typedetermination, 103

Results Analysis, 98, 463SSales and Distribution, 100

Sales document type, 99Sales order, 100Schedule Manager, 527Settlement, 505Settlement rule, 506Simulation versions, 69Structuring indicator, 384TTask list, 528Totals Level, 482VValuated project stock, 180Valuation method, 481Valuation variant, 31Value transfer, 71Variances, 220WWork Breakdown Structure(WBS), 4, 105

Work center data, 41


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FeedbackSAP AG has made every effort in the preparation of this course to ensure theaccuracy and completeness of the materials. If you have any corrections orsuggestions for improvement, please record them in the appropriate place inthe course evaluation.
