CO Overview

New Solutions with CORalf Moser SAP AG

SAP AG 2002, Title of Presentation, Speaker Name *

Solutions with COHow do you find CO in mySAP Financials?Which solution modules exist in Controlling?Can CO be scaled?Which new paths can be explored?


Solutions with COHow do you find CO in mySAP Financials?Which solution modules exist in Controlling?Can CO be scaled?Which new paths can be explored?


mySAP FinancialsAnalyzeDecideMeasureOperate/CollaborateIntegration of InfrastructureOperationsStrategic Enterprise Management/ Business AnalyticsAccountingFinancial PortalsFinancial Portals


mySAP FinancialsSAP R/3OM/OIMFICOPCPAmySAP Financials= R/3 FI/CO - smooth interaction with new componentsBWElectronic DocumentsIntangibles ManagementMultiple ValuationFinancial Supply Chain ManagementStrategic Enterprise ManagementApplication Integration


Solutions with COHow do you find CO in mySAP Financials?Which solution modules exist in Controlling?Which new paths can be explored?Can CO be scaled?


Which solution modules exist in Controlling?Strategic ControllingInvestment ManagementProfit Center Accounting

CO ComponentsClassic ControllingInvestment Management Profit Center Accounting Operative + Analytic ControllingProfitability AnalysisProduct Cost ControllingOverhead Cost ControllingReporting


Period End Closing

Profitability Analysis

Overhead Cost Management

Standard Costing

Actual Costing/ Material LedgerPreliminary/ Simultaneous Costing

Profit Center AccountingControlling Components/Processes?Investment Management



Operative + Analytic ControllingProfitability AnalysisProduct Cost ControllingOverhead Cost ControllingReportingCO ComponentsClassic Controlling Investment Management Profit Center Accounting


Profitability Analysis PSFICOSDPP

CharacteristicsMarket Segments

Company CodeSales OrganizationCustomerProduct

Value FieldsG/L AccountsQuantitiesRevenuesSales DeductionsCost of Goods Sold


Profitability Analysis Costing-basedAccount-basedPossible to use both of these types simultaneously !Accounting Methods


Characteristics Derivation ConceptInputCust. Product Sls rep. DistrictStateCust.grpProd.grpSls reg.Strat.BUR1P1 C1OutputCust. Product Sls rep. DistrictStateCust.grpProd.grpSls reg.Strat.BUSRR1P1 C1D1 S1G1PZSBProductCustomer groupStateProduct groupDistrict Sales rep.Sales regionStrategicbusiness unitCustomerDERIVATIONR1P1C1


Valuation ConceptOutput QuantityCustomer Disc.Revenue100001000 10 Quantity 10

Var. prod. costs 5,200Fixed prod. costs 1,800Special handling 200

Revenue10,000

Sales commision 500

InputBilling Document

Customer 1000Product P-100Quantity 10Revenue 10,000Discounts 1,000

ValuationSpecial handlingSales commisionFixed prod. costs 1800 500 200 5200 Var. prod. costs 5200



Operative + Analytic ControllingProfitability AnalysisProduct Cost ControllingOverhead Cost ControllingReportingCO ComponentsClassic Controlling Investment Management Profit Center Accounting


Product Cost Controlling

OrderMaterial $ Prod. Costs $ OH Costs $ Proc. Costs $ Total ...PlanDebitActualVariance

Periodic Actual Prices

Multiple Currencies

Multiple Valuations

Overhead, WIP

Variances, Scrap

SettlementProduct Cost Planning Standard Cost Estimate

Preliminary CostingSimultaneous Costing

Actual CostingMaterial Ledger

Period-End Closing

Multilevel Material Costing

Simulation Costing

Multiple Valuations / Currencies

Standard Price


Product Cost ControllingProduct Cost by Periodanalyze costs by period

Product Cost Collectors

Cost Object Hierarchies

Cost Object (Production Order)

Cost Object (Sales Document Items)

Product Cost by Sales Order

Product Cost by Orderanalyze costs by lot



Multilevel Material Costing

Simulation Costing


Standard Price

OrderMaterial $ Prod. Costs $ OH Costs $ Proc. Costs $ Total ...PlanDebitActualVariance


Multiple Currencies

Multiple Valuations

Overhead, WIP

Variances, Scrap

SettlementProduct Cost Planning Standard Cost EstimatePreliminary CostingSimultaneous CostingActual CostingMaterial Ledger

Period-End Closing


Product Cost PlanningMaterial Costing

With Quantity Structure Additive Cost Estimate

planning new products, services

Unit Costing Reference and Simulation Costing(base planning object) Easy Cost Planning rapid cost planning Price Update Without Quantity Structure


Product Cost PlanningCosting Material

w/o quantity structureSpreadsheet for planning costs of;

materials

base planning objects fast results in cost planning

testing the costing model price update

plan costs for a new product

simulate cost estimates Ad-Hoc Cost EstimateEasy Cost Planning

Additive Cost EstimateUnit CostingReference and Simulation Costing(base object cost estimate)



W/O Quantity Structure Additive Cost Estimate


Unit/Simulation Costing?? Reference and Simulation Costing(based planning object ) Easy Cost Planning (ad hoc cost estimate) rapid cost planning Price Update



W/O Quantity Structure Additive Cost Estimate

rapid cost planning

testing the costing model

Price Update


simulate cost estimates Reference and Simulation CostingAd-Hoc Cost EstimateEasy Cost Planning




Multiple Currencies

Multiple Valuations

Overhead, WIP

Variances, Scrap

SettlementActual CostingMaterial Ledger

Product Cost Planning Standard Cost EstimateOrderMaterial $ Prod. Costs $ OH Costs $ Proc. Costs $ Total ...PlanDebitActualVariancePreliminary CostingSimultaneous Costing

Period-End Closing Multilevel Material Costing

Simulation Costing


Standard Price


Period-End Closing with Schedule Manager



Operative + Analytic ControllingProfitability AnalysisProduct Cost ControllingOverhead Cost ControllingReporting

CO ComponentsClassic Controlling Investment Management Profit Center Accounting


Overhead Cost Controlling Cost Element Accounting

Cost Center Accounting

Activity Based Costing

Internal Orders

Cost Elements

Reconcilation with FI

Business Processes

HierarchiesCost CentersStat. Key FiguresActivity Types Internal Orders

Orders


Overhead Cost Controlling Cost Element Accounting

Cost Center Accounting

Activity Based Costing

Internal Orders

Cost Elements

Reconcilation with FI

Business Processes

HierarchiesCost CentersStat. Key FiguresActivity Types Internal Orders

Orders


Value Flow for Operative ControllingFinancialAccountingOverhead CostControllingS&DProfitability and Sales ControllingAssessmentSettlement Billing DocumentCost of Goods Manufactured for SalesActivity allocationProduction Variances Direct Account AssignmentProductionProduct CostControllingFICO-PCCO-OMCO-PASDPP






Reporting for R/3 COR/3 Reporting

Operational Transaction-oriented Realtime Reporting

Audit Trail (Line Items, Documents from Other Areas, Corrections, ...)

Support of Period-end Closing and Other Back Office Tasks

Analytical Warehouse-based Reporting

Relief of the OLTP System

Data Storage Optimization

Flexible Navigation: Slicing & Dicing in Any Dimension

Role-based Information Provision (Business Package Manager Self-Service MSS)

Extended Personalization Possibilities

Rule-based Alerting and Monitoring

Increasing the User Community

Switch from Well Informed Back Offices to Knowledge Workers in the Front Office

Portal SolutionsBW Reporting Reporting for R/3 CO

Integration into Portal

Integration into PortalData ExtractionDrill Down


Reporting for R/3 CO (Detail I)

ABAP Listviewer Reporting

CO Summarization Reporting

Formatted Reporting with ReportWriter

Drill Down Reporting (Recherche)

R/3 Reporting for R/3 CO CO-OM, CO-PC

Target/Actual Comparisons, Variances

Support of the Planning Process

Assessment Cycles, Target Costs CO-PC, CO-PA, PS

Profitability Analysis for Operating Concerns

Reconciliation Reports to look for Posting Anomalies CO-OM, CO-PC, PS

Standardized / Flexible Cost Analysis of Cost Objects

Check of Data Consistency

CO-OM, CO-PC

Tool Offers Set of Generic Functions Without Programming

Line Item Reports, Documents

Analysis of Incorrect Postings, Corrections


Reporting for R/3 CO (Detail II)

State-of-the-art Data Warehouse Tool

Web Caching

Web Application Designer

Common Meta Data Repository

Customer Specific Solution Data Merge from Different Applications and Systems

Flexible Definition of Aggregates

Mass Reporting for Cost Centers incl. Automatic User Profile Generation

Predefined Content

Highly Optimized Adaption

Highly Optimized Adaption Infocubes, Queries, Workbooks and Roles

Ready-to-run

Delta Extraction for Line Items


Reporting for R/3 CO (Detail III)

Role-based Monitoring and Alerting

Integration of Existing Reports

Cost Center Monitor

Internal Order Monitor

Internal Activity Allocation Monitor

ReportWriter/Painter Reports via iViews

BW Reports via Web Templates

Portal Solutions for R/3 COIntegration of Business Tasks Administrative Tasks via ISR Correction Posting Request Master Data Change Request

Planning Scenario






OrdersInvestment ProjectsPlanningActual ValuesSettlementMaintanenceInvestment ProgramFixedAssetsSettlementEquipment MaintanenceBudgeting

AppropriationRequestsApproval ProcessPlanCost CentersFlow of Values in Investment Management


Investment Cost Program: Budgeting top-downOrder OR03Total InvestmentsPlan Budget Distrib.Business Area 1Business Area 2Business Area 3Northern RegionSouthern RegionEastern RegionPlan Budget AllottedPlan Budget Distrib.AllottedProject PR02Project PR2.1Project PR2.2Appr.Request AR01Plan 20015025070805060040050015001200Budget values are distributed down within the organizational hierarchy.


Investment Measure: IntegrationAuCCapital Investment Measure(Order / WBS-Element)Cap. Investment ProgramCost CenterAsset History SheetDepr. simulationCost planningPurchase Order Ordering Down payment Invoice Internal Activity Transactions during constructionActual ValuesPlanned ValuesBudgetPlanned ValuesCommitmentsPeriodic SettlementActual ValueFinal SettlementAsset 1Asset 2Asset 3


Corporate Investment Management: OverviewPlanning of Investmentsin SubsidiaryPlanning of Investmentsin Subsidiary


Global SEM & BWLocal 1 ( R/3 )4UpdateLocal ProgramPositionsGroup DataSTRATEGIC2OPERATIONALCompany DataExtractor11ExtractorSEM BPS333Currency translation in reporting & planningLocal 2 ( R/3 )Global and Local Planning: Proces Cycle

Tabelle1

BusAreaCompanyKFig 1Sum 1KFig 2Sum 2KFig 3Sum 3KFig 4Sum 4

##10510

0001#50250

00010001100100

00010002100100

0002#50250

00020001100100

00020002100100

Tabelle2

BusACompAR

#

#

Tabelle3 (3)

Tabelle3 (4)

Tabelle3

Tabelle3 (2)






Profit Center Accounting ImplementationPlanningProfit Center Planning

Basic Settings PCA Settings

Master Data

Assignments

Overview

Comparison with PA

Standard Report Report Execution

Profitability AccountingInformation System Planning Layouts

Manual Planning

Integrated Planning


Period End Closing

Profitability Analysis

Overhead Cost Management

Standard Costing

Actual Costing/ Material LedgerPreliminary/ Simultaneous Costing

Profit Center AccountingControlling Components/Processes?Investment Management


Solutions with COWhich new paths can be explored?How do you find CO in mySAP Financials?Which solution modules exist in Controlling?Can CO be scaled?


Survey


CO changes the company car assignmentIT Service renews authorities for different systemsPersonnel enters transfer posting for employee in HR-ORG and asks for provisional testimonialControlling checks budget items and other Controlling object requirementsJanitorial department organizes moveAsset Accounting enters transfer posting for equipment

Telephone service switches telephone overPC service brings computer to new officeDepartmental Transfer - Old


CO changes the company car assignmentIT Service renews authorities for different systemsPersonnel enters transfer posting for employee in HR-ORG and asks for provisional testimonial

Controlling checks budget items and other Controlling object requirementsJanitorial department organizes move

Asset Accounting enters transfer posting for equipmentConfirmation that all steps are completed.Departmental Transfer with Internal Service RequestTelephone service switches telephone overPC service brings computer to new office


Process for Sales in CRM

Contact CenterOpportunity, ActivitiesSales Order ProcessingProcurement,DeliveryATP Check6215Billing,Controlling4Online Store,Internet OrdersMobile Salese-MailTelesales3


R3 Integration: Process for Sales in CRMContact CenterOpportunity, ActivitiesSales Order ProcessingProcurement,DeliveryATP Check6215Billing,Controlling4Online Store,Internet OrdersMobile Salese-MailTelesales3


Solutions with COCan CO be scaled?How do you find CO in mySAP Financials?Which solution modules exist in Controlling?Which new paths can be explored?


How much Controlling do you need?AnalyzeDecideMeasureOperate/CollaborateProfit from COCost of COProfitabilityof ControllingUse of COAd hoc PeriodicProductivity Effectivity Efficiency ExactnessBetter DecisionsCost Reduction

PLAN TARGET ACTUAL VariancesKey Date Quarter Year RollingMaster Data MaintenanceExecutionControl


Recording Consumption QuantitiesEfficiencyCompromise:1. Backflushing2. Counting - daily, weekly, monthly3. Difference distribution Backflushing is used. No manual interaction. Quantities according to planned data from bill of material and routing. Accuracy

Manual confirmation by order. The user enters quantities as taken from stock.


Thank You!Thank you for your interest!

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Copyright 2002 SAP AG. All Rights ReservedNo part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice.Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors.Microsoft, WINDOWS, NT, EXCEL, Word, PowerPoint and SQL Server are registered trademarks of Microsoft Corporation.IBM, DB2, DB2 Universal Database, OS/2, Parallel Sysplex, MVS/ESA, AIX, S/390, AS/400, OS/390, OS/400, iSeries, pSeries, xSeries, zSeries, z/OS, AFP, Intelligent Miner, WebSphere, Netfinity, Tivoli, Informix and Informix Dynamic ServerTM are trademarks of IBM Corporation in USA and/or other countries.ORACLE is a registered trademark of ORACLE Corporation.UNIX, X/Open, OSF/1, and Motif are registered trademarks of the Open Group.Citrix, the Citrix logo, ICA, Program Neighborhood, MetaFrame, WinFrame, VideoFrame, MultiWin and other Citrix product names referenced herein are trademarks of Citrix Systems, Inc.HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology.JAVA is a registered trademark of Sun Microsystems, Inc. JAVASCRIPT is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape.MarketSet and Enterprise Buyer are jointly owned trademarks of SAP AG and Commerce One.SAP, SAP Logo, R/2, R/3, mySAP, mySAP.com and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned are trademarks of their respective companies.

Status tracking is possible for managers and employees.Profitability Analysis is used to judge product areas, regions and business areas for example. The terms can be summarized in any way required for their results amount or contribution margin. The aim is to support the areas of Sales, Marketing, Product Management and Enterprise Planning with information for Controlling and decision making.The CO-PA module can be used in enterprises of any industry (mechanical engineering, chemicals, service providers etc.) or production categories (repetitive manufacturing, process manufacturing, sales-order-related production and project processing).The results can be displayed either by period, order or project.Typical questions in Profitability Analysis:Which customers are the largest and are expanding the quickest?How did the sales business and the contribution margins for different product areas develop in the last period?How successful are the different business areas?*Organizational Units of PA?*Accounting Methods???*Account Based-reconcilation with FI*Costing based valuation- Costs and revenues according to value fields*Account based valuation- organized in accountsCharacteristic derivation refers to the system's attempts to determine characteristic values for characteristics for all COPA-relevant transactions (supplementing the automatic mappings).Supplementing those values determined through the automatic mappings, derivation can access additional information (characteristic values) both on and off the originating transaction.For every COPA-relevant transaction, the system will attempt to derive a characteristic value for each and every characteristic in the operating concern (if derivation configuration is complete).Derivation is not always successful. Unsuccessful derivation for a characteristic results in the posting of a blank, null, or unassigned characteristic value.The total combination of (segment-level) characteristic values for a given transaction comprises the definition of the relevant profitability segment, which is the account assignment object for CO-PA.

In costing-based Profitability Analysis, it is possible to configure a function known as valuation to supplement the performance information provided directly by a transaction. The additional information may be estimated, calculated, or retrieved from a different source.For example, it is possible to configure the system to calculate estimated values for internal sales commision and freight costs at the time an invoice is billed, so that profitability can be projected prior to knowing the actual values. Likewise, it is possible to access detailed product costing information.

*Do we need this slide???

*Cost Object Controlling supports you in: Reaching make-or-buy decisions Determining price floors Performing complex cost analysis (such as target/actual analysis) Determining inventory values

* Product Cost by Period In contrast to Product Cost by Order in which you analyze costs by lot, in Product Cost by Period you analyze costs by period. This means that you collect the costs on a cost object over an extended period of time, and analyze the debits and credits in each period.

You can use the Product Cost by Period component for the following purposes:Create a preliminary cost estimate for product cost collectors Calculate and analyze target costs and actual costs for product cost collectors and cost object hierarchiesCalculate or update the work-in-process inventory and the finished goods inventory Calculate and analyze variances for each periodTransfer data to FI, CO-PA, EC-PCA, CO-PC-ACT

* Product Cost by OrderThe Product Cost by Order application component enables you to analyze costs at the level of manufacturing orders. You can use the Product Cost by Order application component in make-to-stock and sales-order-related production environments. In Product Cost by Order, the manufacturing orders themselves are the cost objects. Costs charged to manufacturing orders are usually analyzed and settled by lot. This means that variances can only be analyzed after the entire planned production quantity has been put into inventory.

The Product Cost by Order component allows you to do the following:Calculate and analyze planned costs, target costs, and actual costs of production orders and process ordersCalculate or update the work-in-process inventory and the finished goods inventory Calculate and analyze variancesTransfer data to FI , CO-PA, EC-PCA, CO-PC-ACT

* Product Cost by Sales OrderIn the application component Product Cost by Sales Order, the sales document items (items in inquires, quotations, or sales orders) function as the cost objects for which you can determine costs and revenues in both planned and actual data. In sales-order-related production, you use the functions of Product Cost by Sales Order to collect and analyze the costs in complex make-to-order production on the sales order item.

You can use the Product Cost by Sales Order component in the following situations:When you are manufacturing in-house with reference to a sales order in complex make-to-order production When you are purchasing customer-specific trading goods with reference to a sales order and reselling them to your customersWhen you are providing services whose costs are assigned to a sales order When you want to collect the sum of the actual costs incurred for the sales order item on the sales order item (standard cost of goods manufactured of sales plus variances) For detailed information, refer to the sections Valuated Sales Order Stock and Settlement in Product Cost by Order or Period.

The Product Cost by Sales Order component enables you to do the following:Calculate and analyze planned costs and actual costs by sales document item Calculate and analyze planned revenues and actual revenues by sales document item Revaluate the activities and business processes allocated to the cost objects with actual activity prices Allocate the overhead costs to the cost object using overhead calculation or dynamic process allocation Calculate the value of goods that have been delivered to your customer but not invoiced Create reserves automaticallyTransfer data to Financial Accounting (FI)Transfer data to Profitability Analysis (CO-PA)Transfer data to Profit Center Accounting (EC-PCA)

* Costs for Intangible goods and ServicesThe application component Costs for Intangible Goods and Services provides capabilities for analyzing the costs of intangible goods and services.A telecast is an example of an intangible good. Assembling a machine at a customer site is an example of a service.The cost objects can be internal orders or general cost objects.

*\\Dwdf039\GBU-FIN\Product_Management\Teams\Product_Management\PM_R3\R3Enterprise\DetailPPT

*Product Cost Planning (PCP)To calculate the non-order-related cost of goods manufactured and cost of goods sold for each product unit To establish how the costs are broken down for each product, and to calculate the value added for each step of the production process ( Concept of Cost Rollup) To optimize the cost of goods manufactured through comparison costing ( Product Cost Controlling Information System) To provide basic information for other R/3 applications, for example: To establish standards with which to assess production efficiency in Cost Object Controlling To update prices in the material master record and in Profitability analysis Lower price limits for Sales and Distribution

*Costing Material / Cost Estimate for a MaterialA cost that is based on an activity unit and that remains stable over a relatively long period of time. The standard cost of a material can remain stable for a year. It is essentially a norm that should not be exceeded.

With quantity structure BOMs and routings or master recipedata from Production Planning (PP or PP-PI)

Without quantity structure The cost estimate without quantity structure is a tool for planning costs and establishing prices for materials without reference to quantity structure data from Production Planning (PP and PP-PI). It is intended for materials with insufficient or no quantity structure data.It enables you to:Plan costs for raw materials, internal activities, and external activities for a product in the form of a unit cost estimate Assign overhead to the product in the production and material areas Assign the calculated costs to the cost components as well as when saving them Group the costs of the materials used for semifinished products into cost components It can also be used to enter data from non-SAP systems.

*Additive Cost EstimateYou use additive costing to add costs manually to a material cost estimate when they cannot be calculated by the system. Examples of such costs are freight charges, insurance costs, stock transfer costs, incomplete or changed BOMs, and routings.

*Ad Hoc Cost Estimateplanning costs without going to the effort of creating a planning object in the system can also used to test the costing model

*Reference and Simulation CostingWith this component, you can create base planning objects. A base planning object is a reference object of Product Cost Planning which you create in Reference and Simulation Costing, in order to plan costs for a new product or service and simulate changes to existing cost estimates. You can use the base planning object as follows:As a building block in other cost estimates, such as other base object cost estimates, or material cost estimates without quantity structure As a reference when planning other objects in the R/3 System, such as WBS elements, CO production orders To simulate the effects on costs following changes to production factors or to the exchanging of materials or internal activities
























Cost Element AccountingCost and Revenue Element Accounting details which costs and revenues have been incurred. Accrual is calculated here for valuation differences and additional costs. Cost Accounting and Financial Accounting are also reconciled in Cost Element Accounting. This means that the tasks of Cost and Revenue Element Accounting stretch beyond the bounds of Overhead Cost Controlling.

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

Internal ordersOverhead Orders are internal orders used either to monitor overhead costs for a limited period, or overhead incurred by executing a job, or for the long-term monitoring of specific parts of the overhead. Independently of the cost center structure, internal orders collect the plan and actual costs incurred, enabling you to control the costs continuously. You can also use internal orders to control a cost center in more detail. You can assign budgets to jobs. These budgets are then monitored automatically by the SAP system to ensure that they are kept to.

Activity-Based CostingIn contrast to the responsibility and function-oriented basis of Cost Center Accounting, Activity-Based Costing provides a transaction-based and cross-functional approach for activity output in which several cost centers are involved. The emphasis is not on cost optimization in individual departments, but the entire organization. By allocating process quantities based on cost drivers, rather than using overhead calculation, cost allocation along the value chain is more source-based. Activity-Based Costing enables you to cost products more accurately in the overhead areas. Cost Element AccountingCost and Revenue Element Accounting details which costs and revenues have been incurred. Accrual is calculated here for valuation differences and additional costs. Cost Accounting and Financial Accounting are also reconciled in Cost Element Accounting. This means that the tasks of Cost and Revenue Element Accounting stretch beyond the bounds of Overhead Cost Controlling.

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

Internal ordersOverhead Orders are internal orders used either to monitor overhead costs for a limited period, or overhead incurred by executing a job, or for the long-term monitoring of specific parts of the overhead. Independently of the cost center structure, internal orders collect the plan and actual costs incurred, enabling you to control the costs continuously. You can also use internal orders to control a cost center in more detail. You can assign budgets to jobs. These budgets are then monitored automatically by the SAP system to ensure that they are kept to.

Activity-Based CostingIn contrast to the responsibility and function-oriented basis of Cost Center Accounting, Activity-Based Costing provides a transaction-based and cross-functional approach for activity output in which several cost centers are involved. The emphasis is not on cost optimization in individual departments, but the entire organization. By allocating process quantities based on cost drivers, rather than using overhead calculation, cost allocation along the value chain is more source-based. Activity-Based Costing enables you to cost products more accurately in the overhead areas. Costing-based profitability analysis has the following interfaces:Transfer of sales order receipts and billing document data supplemented by valuation with product costs (Product Cost Planning and sales order costing) and accrued costs and sales deductions (SD).Periodic assessment of cost center costs and process costs (CO).Periodic settlement of internal orders (CO), plant maintenance orders (PM), orders (SM), projects (PS) and sales orders that carry costs and revenues from sales order-related production (SD).Activity allocations from cost centers and process allocation (CO).Direct postings from Financial Accounting (FI)Settlement of production variances (PP).Periodic transfer of accrued costs and revenues from projects, internal orders or orders from sales order-related production.Transfer customer agreements (SD)Ideas for possible investments are entered in Appropriation Requests. Appropriation requests, Orders and Projects can be assigned to the investemnt program for bottom up planning. When an appropriation request is approved, an order or a project is created. Budgets can be distribution top-down from the investement program to orders and projects.. Costs are collected in orders or Projects. They are settled periodically to assets under construction or to cost centers, if they are not to be capitalized. When the investment is complete, it is settled to final fixed assets. During the useful life of the capital investment, you can monitor maintenance costs for fixed assets when they are linked to equipment master records in Plant Maintenance (PM).

The investment cost program typically is a hierarchy of responsibility areas (eg. business areas, regions, profit centers).Appropriation requests, WBS elements, CO orders and PM orders can be assigned to the leaves of the program structure (end nodes).Plan values can be rolled up from appropriation requests, WBS elements, internal orders or PM orders into the leaves of the investment cost program and within the hierarchy of the program positions.The plan values of the program can be taken over into the budget as a whole - either unchanged or with suitable adjustments.The budget can be distributed within the hierarchy of the program positions, and from the leaves to the assigned measures (WBS elements, CO orders, PM orders).If budget distribution to measures is switched on in the program type, then budget for assigned measures can only be maintained from the program position. -> Pprogram Budget cannot be surpassed.

Internal orders, WBS elements, or plant maintenance orders can serve as capital investment measures. An asset under construction can automatically be create, if an investment profile is entered. The budget of the investment measure is assigned via the investment program.The plan or budget values of the investment measure can be taken over to depreciation simulation and cost planningDuring the construction process, all transaction are posted to the order or the wbs element. During periodic settlement, the values that have been posted to the investment measure are settled automatically to the asset under constructionWhen the asset is ready for service, you create the final asset master records. The assets are assigned in the settlement rule of the investment measure.When you now settle the investment measure, the system will automatically transfer the values from the asset under construction to the final asset. The complete global planning process can work in a cycle:1) Planned costs (and actuals and comitments) are extracted from the local systems and loaded into the IM InfoCube in BW2) Data are transferred into the special SEM Planning InfoCube3) In SEM-BPS corporate planning is done4) Corporate Plan is transferred back to the local systems (push back)5) If the corpoarte plan is accepted by local managers, it can locally be copied into budget*Profit Center Accounting (EC-PCA) lets you determine profits and losses by profit center using either period accounting or the cost-of-sales approach. It also lets you analyze fixed capital and so-called "statistical key figures" (number of employees, square meters, and so on) by profit center. Consequently, you can calculate all the key figures commonly used in cost accounting (return on investment, cash flow, sales per employee, and so on).

A profit center is a management-oriented organizational unit used for internal controlling purposes. Dividing your company up into profit centers allows you to analyze areas of responsibility and to delegate responsibility to decentralized units, thus treating them as "companies within the company".

The main aim of Profit Center Accounting is to determine profit for internal areas of responsibility .

Status tracking is possible for managers and employees.Status tracking is possible for managers and employees.Status tracking is possible for managers and employees.This diagram illustrates a possible sales process starting in the contract center. CRM Closed-Loop-Sales is supported from CRM Release 3.0.Integration with FI requires a minimum of R/3 Release 4.0B and Plug In PI 2001.1

This diagram illustrates a possible sales process starting in the contract center. CRM Closed-Loop-Sales is supported from CRM Release 3.0.Integration with FI requires a minimum of R/3 Release 4.0B and Plug In PI 2001.1

Although backflushing is mentioned here, DUV can be applied to all types of confirmation. Backflushing is a typical procedure in the process industry and repetitive manufacturing.

CO Overview

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