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Q & A Data Base

FINANCE & CONTROLLING

BALCO

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Table of Contents1. Cross-Application/Central Organizational Units.......................................91.1. Company...........................................................................................91.2. Credit Control Area...........................................................................91.3. Company Code..................................................................................102. Financial Accounting...............................................................................132.1. Chart of Accounts..............................................................................133. Asset Accounting....................................................................................143.1. Depreciation area.............................................................................143.2. Chart of depreciation........................................................................153.3. Asset class........................................................................................15

B. Master Data..................................................................................................161. General Master Records..........................................................................161.1. Customer Master Record...................................................................161.2. Vendor Master Record.......................................................................161.3. Bank/Bank Directory TR/FI................................................................171.4. Taxes................................................................................................172. Financial Accounting...............................................................................172.1. G/L Account.......................................................................................172.2. Ledger...............................................................................................183. Asset Accounting....................................................................................19

C. Business Processes.......................................................................................201. Financial Accounting...............................................................................201.1. Basic Settings...................................................................................201.1.1. Fiscal Year and Posting Periods...................................................201.1.2. Document....................................................................................211.1.3. Posting Help................................................................................211.1.4. Tax on Sales/Purchases in SAP System.......................................211.1.5. Withholding Tax..........................................................................221.2. General Ledger Accounting...............................................................231.2.1. Postings in G/L.............................................................................231.2.1.1. Park G/L Account Document..................................................231.2.1.2. G/L Account Posting...............................................................231.2.1.3. Recurring Entry.....................................................................231.2.1.4. Document Reversal...............................................................231.2.2. General Ledger Account Analysis................................................241.2.2.1. General Ledger Line item Analysis........................................241.2.3. Account Clearing [GL].................................................................241.2.3.1. Automatic Clearing................................................................241.2.4. Closing Operations......................................................................241.2.4.1. Regroup Receivables/Payables..............................................251.2.4.2. GR/IR Clearing Account Maintenance....................................251.2.4.3. Financial Statement Creation................................................251.2.4.4. Periodic Reports....................................................................251.2.4.5. Carry Forward G/L Balances..................................................261.2.5. Integration...................................................................................261.3. Accounts Payable..............................................................................271.3.1. Vendor Down Payments..............................................................271.3.2. Invoices and Credit Memos.........................................................271.3.2.1. Vendor Document Parking.....................................................27

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1.3.2.2. Invoice Receipt......................................................................281.3.2.3. Vendor Credit Memo..............................................................281.3.2.4. Document Reversal...............................................................281.3.2.5. Recurring Entry.....................................................................291.3.3. Vendor Account Analysis.............................................................291.3.3.1. Vendor Line Item Analysis.....................................................291.3.3.2. Balance Analysis....................................................................291.3.3.3. Vendor Account Evaluations..................................................291.3.4. Vendor Payments........................................................................291.3.4.1. Vendor Payment Request......................................................301.3.4.2. Release for Payment.............................................................311.3.4.3. Manual Outgoing Payments...................................................311.3.4.4. Automatic Outgoing Payments..............................................311.3.4.5. Vendor Payment Medium Creation........................................321.3.5. Account Clearing [AP]..................................................................331.3.5.1. Automatic Clearing................................................................331.3.6. Interest Calculation [A/P].............................................................331.3.6.1. Vendor Account Balance Interest Calculation........................331.3.6.2. Calculation of Interest on Arrears - Vendors..........................331.3.7. Correspondence with Vendors.....................................................341.3.7.1. Correspondence with Vendors...............................................341.4. Accounts Receivable.........................................................................341.4.1. Customer Down Payments..........................................................341.4.1.1. Customer Down Payment......................................................351.4.2. Invoices and Credit Memos.........................................................351.4.2.1. Customer Document Parking.................................................351.4.2.2. Outgoing Invoice...................................................................361.4.2.3. Customer Credit Memo..........................................................361.4.2.4. Document Reversal...............................................................361.4.2.5. Recurring Entry.....................................................................361.4.3. Account Analysis [A/R]................................................................371.4.3.1. Customer Line Item Analysis.................................................371.4.3.2. Balance Analysis....................................................................371.4.3.3. Credit Management Analysis.................................................371.4.3.4. Customer Evaluations............................................................371.4.4. Customer Payments....................................................................371.4.4.1. Payment Advice Note Processing..........................................381.4.4.2. Release for Payment.............................................................381.4.4.3. Manual Incoming Payments...................................................381.4.4.4. Automatic Incoming Payments..............................................391.4.4.5. Customer Payment Medium Creation....................................391.4.4.6. Manual Payment by Bill of Exchange.....................................391.4.4.7. Bill of Exchange Usage..........................................................401.4.5. Account Clearing [AR].................................................................401.4.5.1. Automatic Clearing................................................................401.4.6. Dunning Notice............................................................................401.4.6.1. Automatic Dunning................................................................401.4.7. Interest Calculation [A/R]............................................................411.4.7.1. Customer Account Balance Interest Calculation....................411.4.7.2. Calculation of Interest on Arrears - Customers......................411.4.8. Correspondence with Customers.................................................421.4.8.1. Correspondence with Customers...........................................42

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1.5. Bank Accounting...............................................................................421.5.1. Incomings....................................................................................421.5.1.1. Cash Journal..........................................................................421.5.1.2. Manual Account Statement...................................................431.5.1.3. Check Deposit Transaction....................................................431.5.1.4. Bill of Exchange Presentation (Debit)....................................441.5.1.5. Cash Journal..........................................................................441.5.2. Check Management.....................................................................441.5.2.1. Manage Check Balance.........................................................441.5.3. Account Balance Interest Calculation..........................................441.5.3.1. Account Balance Interest Calculation....................................441.6. Special Purpose Ledger.....................................................................454. Asset Accounting....................................................................................454.1. Handling Fixed Assets.......................................................................464.1.1. Asset Maintenance......................................................................464.1.1.1. Creation of Master Record for Tangible Assets......................464.1.1.2. Asset Master Record Change.................................................464.1.1.3. Mass Change.........................................................................474.1.2. Receipts......................................................................................474.1.2.1. Direct Acquisition of Internal Activity....................................474.1.2.2. Processing of Asset Acquisition.............................................484.1.2.3. Subsequent Acquisition.........................................................494.1.3. Depreciation................................................................................494.1.3.1. Creation of Reserves from Gain from Asset Retirement........494.1.3.2. Reserves Carry forward.........................................................494.1.3.3. Depreciation Processing........................................................504.1.3.4. Manual Depreciation Planning...............................................504.1.3.5. Depreciation Posting.............................................................514.1.3.6. Unit-of-Production Depreciation............................................514.1.4. Business Transactions.................................................................514.1.4.1. Settlement of Asset under Construction................................514.1.4.2. Post-capitalization.................................................................534.1.4.3. Write-up.................................................................................534.1.4.4. Reposting..............................................................................534.1.5. Specific Valuations......................................................................544.1.5.1. Closing of Insurance Contract................................................544.1.5.2. Revaluation...........................................................................554.1.6. Group Requirements...................................................................554.1.6.1. Transfer Within a Client.........................................................554.1.6.2. Creation of Master Record for Tangible Assets......................554.1.7. Retirements.................................................................................564.1.7.1. Retirement............................................................................564.1.7.2. Mass Retirement....................................................................564.1.8. Closing Operations [Asset Accounting].......................................574.1.8.1. Multiple Valuations................................................................574.1.8.2. Preparations for Year-End Closing in Asset Management......574.1.8.3. Depreciation Simulation / Forecast........................................584.1.8.4. Mass Change.........................................................................584.1.8.5. Recalculation of Depreciation................................................584.1.8.6. Depreciation posting.............................................................594.1.8.7. Carry Out Year-End Closing in Asset Management................594.1.8.8. Periodic Reports....................................................................60

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4.2. Handling of Leased Assets................................................................614.2.1. Asset Maintenance......................................................................614.2.1.1. Asset Master Record Change.................................................614.2.1.2. Mass Change.........................................................................614.2.2. Receipts......................................................................................624.2.2.1. Acquisition of Leased Asset...................................................624.2.3. Depreciation................................................................................624.2.3.1. Depreciation Processing........................................................624.2.3.2. Depreciation Posting.............................................................634.2.4. Business Transactions.................................................................634.2.4.1. Transfer Leased Asset...........................................................634.2.4.2. Change in a Leasing Agreement............................................644.2.5. Specific Valuations......................................................................644.2.5.1. Closing of Insurance Contract................................................644.2.6. Retirements.................................................................................654.2.6.1. Retirement of Leased Asset...................................................654.2.7. Closing Operations......................................................................664.2.7.1. Multiple Valuations................................................................664.2.7.2. Preparations for Year-End Closing in Asset Management......664.2.7.3. Depreciation Simulation / Forecast........................................674.2.7.4. Mass Change.........................................................................674.2.7.5. Recalculation of Depreciation................................................684.2.7.6. Depreciation Posting.............................................................684.2.7.7. Carry Out Year-End Closing in Asset Management................694.2.7.8. Periodic Reports....................................................................69

D. Organization.................................................................................................761. Cross-Application/Central Organizational Units.......................................761.1. Controlling Area................................................................................761.2. Profit Center......................................................................................771.3. Operating Concern............................................................................78

E. Master Data..................................................................................................791. Revenue and Cost Controlling.................................................................791.1. Overhead Cost Controlling................................................................791.1.1. Cost Element...............................................................................791.1.1.1. Primary Cost Element............................................................791.1.1.2. Secondary Cost Element.......................................................791.1.1.3. Cost Element Group..............................................................791.1.2. Cost Center.................................................................................791.1.2.1. Cost Center............................................................................791.1.2.2. Standard Hierarchy for Cost Centers.....................................791.1.2.3. Cost Center Group.................................................................801.1.3. Activity Type...............................................................................801.1.3.1. Activity Type..........................................................................801.1.3.2. Activity Type Group...............................................................801.1.4. Statistical Key Figures.................................................................801.1.4.1. Statistical Key Figures...........................................................801.1.4.2. Statistical Key Figure Group..................................................801.1.5. Business Process.........................................................................811.1.5.1. Business Process...................................................................811.1.5.2. Standard Hierarchy for Business Processes...........................811.1.5.3. Business Process Group.........................................................811.1.6. Internal Order..............................................................................81

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1.2. Product Cost Controlling...................................................................821.2.1. Procurement Alternative.............................................................821.2.2. Cost Component..........................................................................821.2.3. Product Cost Collectors...............................................................821.2.4. Material Ledger Data...................................................................831.3. Profitability Analysis..........................................................................831.3.1. Characteristics............................................................................831.3.1.1. Characteristic Definition........................................................831.3.1.2. Characteristic Values.............................................................831.3.1.3. Characteristic Derivation.......................................................831.3.2. Value Fields.................................................................................841.3.2.1. Definition of Value Fields.......................................................841.3.3. Condition Types...........................................................................841.3.3.1. Definition of Condition Types.................................................84

F. Business Processes.......................................................................................851. Revenue and Cost Controlling.................................................................851.1. Profit and Cost Planning....................................................................851.1.1. Cost and Activity Planning...........................................................851.1.1.1. Copy Plan from Previous Year to Cost Center Planning.........851.1.1.2. Copy Actual Data to Cost Center Plan...................................851.1.1.3. Redefinition of Plan Version...................................................851.1.1.4. Planning Revaluation.............................................................851.1.1.5. Budget Planning....................................................................861.1.1.6. Order Budgeting....................................................................861.1.1.7. Activity Type Planning...........................................................861.1.1.8. Definition of Activity Type for Cost Center............................861.1.1.9. Transfer of Statistical Key Figures from LIS (Plan).................871.1.1.10. Transfer of Depreciation/Interest (Activity-Independent)......871.1.1.11. Transfer of Depreciation/Interest (Activity-Dependent).........871.1.1.12. Transfer of Personnel Costs...................................................871.1.1.13. Transfer of Scheduled Activity PP -> CO-ABC........................871.1.1.14. Transfer of Scheduled Activity from PP to CO-OM-CCA..........881.1.1.15. Primary Cost Planning (Full Costs).........................................881.1.1.16. Primary Cost Planning (Prop./Fixed)......................................881.1.1.17. Secondary Cost Planning (Full Costs)....................................881.1.1.18. Secondary Cost Planning (Prop./Fixed)..................................881.1.1.19. Cost Element Planning (Order with Integrated Planning)......891.1.1.20. Cost Element Planning (Order)..............................................891.1.1.21. Overall Planning (Order)........................................................891.1.1.22. Unit Costing (Order)..............................................................891.1.1.23. Easy Cost Planning and Execution Services (CO)..................891.1.1.24. Periodic Reposting of Plan Data.............................................901.1.1.25. Cost Accrual - Plan.................................................................901.1.1.26. Process Cost Planning............................................................901.1.1.27. Overhead Calculation (Cost Center)......................................901.1.1.28. Overhead Calculation (Business Process)..............................901.1.1.29. Overhead Calculation (Overhead Cost Order).......................951.1.1.30. Plan Cost Distribution............................................................961.1.1.31. Settlement of Overhead Cost Orders (Planning Data)...........961.1.1.32. Plan Cost Assessment............................................................971.1.1.33. Plan Reconciliation................................................................971.1.1.34. Splitting.................................................................................97

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1.1.1.35. Planned Price Calculation......................................................971.1.2. Product Cost Planning.................................................................981.1.2.1. Preparation for Costing..........................................................981.1.2.2. Standard Cost Estimate with Quantity Structure...................991.1.2.3. Standard Cost Estimate Without Quantity Structure.............1001.1.2.4. Standard Cost Estimate for Co-Products................................1011.1.2.5. Costing Analysis....................................................................1011.1.2.6. Price Release with Standard Cost Estimate...........................1011.1.2.7. Reference and Simulation Costing.........................................1021.1.2.8. Easy Cost Planning and Execution Services (CO)..................1021.1.3. Profit Center Planning.................................................................1021.1.3.1. Copy Plan from Previous Year -> Profit Center Planning.......1021.1.3.2. Copy Actual Costs -> Profit Center Planning.........................1021.1.3.3. Redefinition of Plan Version (Profit Center Planning).............1031.1.3.4. Excel Upload -> Profit Center Planning..................................1031.1.3.5. Plan Integration of Profit Centers...........................................1031.1.3.6. Manual Profit Center Planning...............................................1031.1.3.7. Profit Center Distribution: Plan..............................................1031.1.3.8. Plan: Profit Center Assessment..............................................1041.1.3.9. Profit Center Analysis............................................................1041.2. Actual Cost/Revenue Allocation........................................................1041.2.1. Overhead Allocation....................................................................1041.2.1.1. Direct Activity Assignment Using Time Sheet Processing......1041.2.1.2. Time Sheet Permit.................................................................1041.2.1.3. Transfer Time Sheet Data to CO............................................1051.2.1.4. Time Sheet Report.................................................................1051.2.1.5. Direct Activity Allocation (Controlling)...................................1061.2.1.6. Transfer of Primary Costs to Cost Center/Order....................1061.2.1.7. Manual Funds Reservation....................................................1061.2.1.8. Manual Funds Reduction.......................................................1061.2.1.9. Manual Cost Allocation..........................................................1071.2.2. Product Cost Allocation...............................................................1071.2.2.1. Simultaneous Costing............................................................1071.2.3. Profit Center Allocation...............................................................1081.2.3.1. Actual Data Transfers on Profit Center..................................1081.2.3.2. Document Entry in Profit Center Accounting.........................1081.2.3.3. Actual Transfer of Additional Balance Sheet Items to EC-PCA

1081.2.3.4. Manual Entry of Statistical Key Figures.................................1081.2.4. Cost and Revenue Allocation to Profitability Analysis..................1081.2.4.1. Transfer and Valuation of Incoming Sales Orders..................1081.2.4.2. Transfer and Valuation of Billing Documents (Direct Sale)....1091.2.4.3. Transfer and Valuation of Billing Documents (Third-Party Transaction) 1091.2.4.4. Transfer and Valuation of Billing Documents (Intercompany Processing) 1091.2.4.5. Transfer and Valuation of Billing Documents (Complaints Processing) 1101.2.4.6. Transfer of Customer Agreements to Profitability Analysis. . .1101.2.4.7. Direct Posting of Costs and Revenues From FI......................1101.2.4.8. Automatic Additional Transfer into Profitability Analysis.......1101.3. Period-End Closing (Controlling)........................................................111

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1.3.1. Period-End Closing in Overhead Cost Controlling........................1111.3.1.1. Actual Periodic Reposting......................................................1111.3.1.2. Accrual Calculation in Cost Center Accounting (Target = Actual Method) 1111.3.1.3. Accrual Calculation in Cost Center Accounting (Percentage Method) 1121.3.1.4. Actual Cost Distribution.........................................................1121.3.1.5. Entry of Sender Activities......................................................1121.3.1.6. Actual Indirect Activity Allocation (Manual Entry)..................1121.3.1.7. Actual Indirect Activity Allocation (Indirect Entry).................1131.3.1.8. Target=Actual Activity Allocation..........................................1131.3.1.9. Template Allocation (Overhead Cost Order)..........................1131.3.1.10. Overhead Calculation (Overhead Cost Order).......................1141.3.1.11. Settlement of Overhead Orders (Actual Data).......................1141.3.1.12. Settlement of Accrual Orders................................................1141.3.1.13. Actual Cost Assessment........................................................1151.3.1.14. Overhead Calculation (Business Process)..............................1151.3.1.15. Variance Calculation for Overhead........................................1201.3.1.16. Predistribution of Fixed Costs................................................1201.3.1.17. Splitting.................................................................................1201.3.1.18. Actual Price Calculation.........................................................1211.3.1.19. Revaluation at Actual Prices..................................................1211.3.1.20. Reconciliation Financial Accounting/Controlling....................1211.3.1.21. Business Process Analysis.....................................................1211.3.1.22. Cost Center Analysis..............................................................1221.3.1.23. Analysis of Overhead Orders.................................................1221.3.2. Period-End Closing: Periodic Product Cost Controlling.................1221.3.2.1. Template Allocation (Cost Object).........................................1221.3.2.2. Revaluation at Actual Prices..................................................1221.3.2.3. Actual Cost Distribution - Product Costs................................1221.3.2.4. Overhead Calculation (Cost Object).......................................1231.3.2.5. Template Allocation (Product Cost Collector)........................1231.3.2.6. Overhead Calculation (Product Cost Collector)......................1231.3.2.7. WIP Calculation Based on Target Costs.................................1241.3.2.8. Periodic Variance Calculation................................................1241.3.2.9. Settlement of Cost Object Hierarchy.....................................1241.3.2.10. Settlement of Product Cost Collector.....................................1241.3.2.11. Data Collection for Product Drilldown....................................1251.3.2.12. Product Cost Analysis in Product Cost by Period...................1251.3.3. Period-End Closing for Profit Center Accounting..........................1251.3.3.1. Profit Center Distribution: Actual...........................................1251.3.3.2. Actual Profit Center Assessment...........................................1261.3.3.3. Profit Center Analysis............................................................1261.3.4. Period-End Closing for Profitability Analysis................................1261.3.4.1. Settlement of Sales Orders....................................................1261.3.4.2. Settlement of Production Variances......................................1261.3.4.3. Settlement of Internal Orders (Actual Data)..........................1271.3.4.4. Project Settlement.................................................................1271.3.4.5. Actual Allocation of Process Costs to Profitability Analysis....1271.3.4.6. Actual Allocation of Cost Center Costs to Profitability Analysis

1281.3.4.7. Actual Top-Down Distribution................................................128

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1.3.4.8. Analysis of Results and Contribution Margins........................128

A Organization

1. Cross-Application/Central Organizational Units

1.1. Company

Questions:

Q: 1) Do you want to structure the company into one or more separate legal entities?

A: One entity

Q: 2) Do you have foreign companies?

A: At present - No

Q: 3) Which companies are going to work with which chart of account?

A: At present, N/AQ: 4) In which currencies are the transactions posted in the companies?

A: At present, N/A

Q: 5) Are all companies managed in FI company codes, and is FI integration used?

A: At present, N/A

Q: 6) In which form and at which dates do you collect the reported financial data from the individual companies?

A: At present, N/A

Q: 7) Does the divestiture of a company entail a reclassification to another consolidation group, or is this a final consolidation?

A: At present, N/A9

1.2. Credit Control Area

Questions:

Q: 1) On which level do you perform credit control? On company code level, cross-company code level or a lower level? (Integration)

A: One Credit control area

Q: 2) What is the default credit limit for your customers?

A: depends on customers

Q: 3) If you are not using SAP's Sales and Distribution component, how will you perform credit checks and which actions will they trigger?

A: N/A1.3. Company Code

Questions:

Q: 1) Which legal entities (company codes) will you have and in which countries?

A: At present – BALCO India

Q: 2) What are the legal reporting requirements that these companies have to comply with?

A: IAS AND IFRS

Q: 3) Which companies are required to use a statutory chart of accounts for reporting purposes?

A: At present, N/A

Q: 4) Do all companies use the same operating chart of accounts?

A: At present, N/A

Q: 5) Will a different chart of accounts be used for consolidation purposes?

A: At present, N/A

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Q: 6) Identify legal entities holding minority interest.

A: At present, N/A

Q: 7) Are goods/services exchanged between your different legal entities?

A: At present, N/A

Q: 8) Specify the different levels of consolidation (for example, by country, by region).

A: At present, N/A

Q: 9) Are there any transactions that have to be included, when these products are consolidated?

A: At present, N/A

Q: 10) Identify the legal entities that should be excluded from the consolidation process. Please specify why they have to be excluded.

A: At present, N/A

Q: 11) For which enterprise entities that are not independent legal entities do you require sub ledgers (accounts payable ledger, accounts receivable ledger, asset accounting and so on)? For example, fixed assets per strategic business unit. ).

A: At present, N/A

Q: 12) Which functions will be performed on a cross-company level?

A: At present, N/A

1.4 Controlling Area

Questions:

Q: 1) Note on controlling area:

A:

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Q: 2) Are you using one centralized controlling system or do you follow a decentralized approach with several independent controlling systems?

A: One

Q: 3) Provided that company codes use the same chart of accounts and fiscal year variant: Which company code(s) do you want to assign to your controlling area(s)?

A: BALCO assigned to BALCO controlling area

Q: 4) If you have multiple controlling areas: Do you intend to have management charge-outs (allocations) across those controlling areas?

A: At present, N/A

Q: 5) If you wish to have unified Controlling, which currency or currencies are you planning to use?

A: BHD

Q: 6) Which chart of accounts do you want to use in your controlling area?

A: BALCO1.5 Profit Center

Questions:

Q: 1) Which criteria do you use for dividing your organization into internal areas of responsibility?

A: Product-wise; One for production overheads; One for Corporate overheads

Q: 3) Can you make unique profit center assignments for the following master data: material/plant, cost center, sales order item, cost objects, internal orders etc.?

A: Yes

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Q: 4) As well as the "actual" profit centers, do you use any other profit center, which provides services for various other profit centers (a service profit center)?

A: Yes

Q: 8) Can the structure of your Profit Center (standard hierarchy) be directly derived from the enterprise organization?

A: Yes

1.6 Operating Concern

Questions:

Q: 1) Are you using one central profitability controlling system (system from an organizational viewpoint) or do you follow a decentralized approach with several independent profitability controlling systems?

Explanation: Note: This means that different enterprise branches are independent of each other, which does not enable you to analyze their results usefully.

A: One concern

Q: 2) In SAP the operating concern is an organizational unit that spans one or more controlling areas. Describe which controlling area(s) you want to assign to your Operating Concern(s)!

A: BALCO

Q: 3) What currency should be used for the operating concern?

A: BHD

Material Valuation Area

Questions:

Q: 1) Is the value of a material the same throughout the company, or can the value of the same material be different in different plants?

A: Same

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Q: 2) Are you going to use Product Cost Planning and/or Production Planning in R/3? If so, you need to set the valuation area to plant level.

A: Yes

1.7 Plant

Questions:

Q: 1) Are all plants in the same country? List the plants and countries.

A: Yes, as of now

Q: 2) Do you need special plants for your maintenance work apart from the common logistics plants?

A: No

Q: 3) Which enterprise entities carry out production and what do they produce?

A: All final and intermediaries

Q: 7) Does the manufacturing/distribution process for a product differ such that the inventory value/cost structure is different at each facility/plant? If so, please explain how.

A: No

2. Financial Accounting

2.1. Chart of Accounts

Questions:

Q: 1) Which companies use the same chart of accounts?

A: BALCO now

Q: 2) How many natural accounts will each chart of accounts contain? (estimated)

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A: <1000

Q: 3) What is the document numbering logic?

Explanation: Possible reconciliation with SD/MM

A: Stands alone

Q: 4) Describe how the account number is set up (for example: department, natural account).

A: 100/200/300/400 – ASSET/liability/Income/Expenditure

Q: 5) Will the chart of accounts need to be approved? If so, by whom?

A: Yes, by FM

Q: 6) Which maintenance language should be used for each chart of accounts?

A: English

Q: 7) Which additional languages do you wish to use for your charts of accounts?

A: English

Q: 8) Please provide your current Chart of Accounts.

A: Given separately

3. Asset Accounting

Questions:

Q: 1) For which of your legal entities will you be implementing FI-AA?

A: BALCO now

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3.1. Depreciation area

Questions:

Q: 1) Is there a distinction necessary between book depreciation (for external balance sheet) and tax values (for a tax balance sheet)?

A: Not required nowQ: 2) Do you require additional parallel valuations for your assets, e.g., for cost accounting purposes or for statutory reasons? If so, please specify

A: Not required nowQ: 3) Is there a distinction between taxation values and valuation of net assets?

A: At present, N/A

3.2. Chart of depreciation

Questions:

Q: 1) In which countries do you manage fixed assets?

A: India now

Q: 2) Are there any statutory asset valuation requirements which would involve parallel valuation in your financial accounting?

A: At present, N/A

3.3. Asset class

Questions:

Q: 1) Describe how your fixed assets are structured in the balance sheet?

A: Copy given

Q: 2) How do you classify your fixed assets at the moment? How do you intend to classify your assets in the future?

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A: List given

Q: 3 Do you manage low value assets (LVAs) as fixed assets, or do you post them directly to an expense account?

A: At present – yes; But we would like to capitalize them for one year and transfer to another data ledger for control by respective departments

Q: 4 Please list, or provide a list of the asset types that you intend to manage in the Asset Accounting system (e.g. Land, Buildings, Intangibles, etc).

A: List given separately

Q: 5 For each asset category (asset class), list the default depreciation method and the period of depreciation you would like to use.


B. Master Data

1. General Master Records

1.1. Customer Master Record

Q: 1) What are your terms of payment for your customers?

A: SABIC 107 days; PIC generally 23 daysQ: 2) Are there any discounts linked to terms of payment, such as cash discounts?

A: N/A

Q: 3) What kind of payments do you get from your customer?

A: Bank transfers

Q: 4) Are reminders sent? How long is the waiting period?

A: Yes, on due dates Q: 5) Describe any other information relevant to customers.

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A: -

1.2. Vendor Master Record

Questions:

Q: 1) Do you employ different payment terms by facility?

A: Yes

Q: 2) Do your vendors offer discounts for prompt payment (for example, 1% cash discount within 10 days)? Provide a list of the payment terms you require.

A: No

Q: 3) Do you have vendors who are subject to withholding tax?

Explanation: Possible to group with different account groups; Maintenance of fields in master record. in master record.

A: No

1.3. Bank/Bank Directory TR/FI

Questions:

Q: 1) Which banks and bank accounts will you be using for incoming and outgoing payments?


Q: 2) In what currencies are these accounts denominated?

A: USD,BD, EUR

Q: 3) Are certain payments handled by more than one bank (correspondent banks/intermediary banks)?

A: [X] Yes [ ] No

18

1.4. Taxes

Questions:

Q: 1) Will you use an external Tax Package to determine the appropriate tax jurisdiction and/or tax rates to apply to purchasing documents and/or vendor invoices? If yes, name the external package.

A: N/A

Q: 2) Will the tax jurisdiction codes be loaded into SAP?

A: N/A


2.1. G/L Account

Questions:

Q: 1) What procedure do you use when you need to create new account numbers?

Explanation: This can occur centrally or decentralized; Sample accounts can be used.

A: Centralized

Q: 2) Can you define groups of general ledger accounts that require similar information in the master record?

A: Yes

Q: 3) How many retained earnings accounts do you have?

A: Profit & Loss Account, Retained earnings, Statutory and voluntary reserve.

Q: 4) For which general ledger accounts do you wish to display line items?

A: AP, AR, CWIP, Accruals, GIT and all items needing the breakdown from audit point of viewQ: 5) Which accounts do you wish to manage on an open item basis (for example, bank clearing accounts)?

19

A: AP, Bank clearing accounts, ?

Q: 6) Which accounts do you wish to maintain in foreign currency (for example, bank accounts)?

A: Bank accounts, AR, Revenue, AP, Loan accounts,

Q: 7) Describe any special requirements when posting to particular general ledger accounts (for example, expense accounts require an associated cost center).

A: Cost centres to be specified for all;

Q: 8) Which of your General Ledger accounts are not relevant to tax?

A: N/A

2.2. Ledger

Questions:

Q: 2) Do you have special statutory accounting requirements that are not covered in other R/3 applications? Example: Currency translation of a foreign subsidiary, different fiscal year ends to the international trading partner.

Explanation: A special type of rendering of accounts is meant, which requires a characteristic not contained in a standard SAP database.

A: No

3. Asset Accounting

Questions:

Q: 1) How many fixed assets and how many assets under construction do you currently have?

A: About 10000

Q: 2) Which organizational units do you manage in the asset master record?

20

A: BALCO

Q: 3) Do you want asset master record numbering to be internally or externally assigned?

A: Internally

Q: 4) Do you see a business need to use both internal and external number assignment, depending on the asset class? If so, please specify.

A: Need to refer to equipment number of the supplier

Q: 5) If you use external number assignment, do you want to allow the assignment of alphanumeric numbers?

A: [ ]Yes [ X ]No

Q: 6) Do you want to represent asset components using asset sub-numbers? If so, for what purposes do you plan to use asset sub-numbers?

A: Yes; When one major asset has to be broken up with different depreciation periods

Q: 7) Are cost centers (business areas) to be defined in the asset master record on a time-dependent basis?

A: No

Q: 8) Do you see a business need to create multiple similar asset master records in one step?

A: Yes

Q: 9) Do you have assets that require increased depreciation due to multiple shift use?

A: No

Q: 10) In your enterprise, is there a requirement to shut down an asset (discontinue depreciation) for a period of time?

A: Yes, mainly for catalysts

21

Q: 11) How do you archive your asset master records at the present time?

A: Access based system

Q: 12) How long do you intend to continue to manage assets, which are no longer on hand physically, in the system?

A: There is a scrapping/disposal procedure

C. Business Processes


1.1. Basic Settings1.1.1. Fiscal Year and Posting Periods

Questions: Jan. – Dec., 16 periods

Q: 1) Do your posting periods correspond to the calendar months?

A: Yes

Q: 2) Is your fiscal year identical with the calendar year?

A: Yes

Q: 3) If your fiscal year is not identical with the calendar year, please provide a schedule of period closing for the past, current and next year.

A: N/A

Q: 4) Do all your company codes have the same fiscal year/fiscal year variant? Provide a detail if this is not the case.

A: N/A

Q: 5) When do you close your fiscal year?

A: December

Q: 6) Who is responsible for opening and closing accounting periods (including for materials management)?

22

A: Management Accountant

1.1.2. Document

Questions:

Q: 1) What criteria do you use to classify your documents?

A: Transaction based

Q: 2) For which types of documents are the document numbers assigned internally/externally?

Explanation: Are there any legal requirements?

A: No

Q: 3) What is the document numbering logic?

Explanation: Possible reconciliation with SD/MM

A: We can adopt SAP logic

Q: 4) Are the document numbers assigned on a yearly basis?

A: Yes

1.1.3. Posting Help

Questions:

Q: 1) Which help for posting do you need (such as account assignment models, sample documents, control totals, user parameters)?

A: Templates, etc

1.1.4. Tax on Sales/Purchases in SAP System

Questions:

Q: 1) Value added tax: Which are the current tax rates in the countries of your company codes?

A: At present, N/A

23

Q: 2) Value added tax: Do you have non-deductible taxes?

A: N/A

Q: 3) How do you handle taxes on imports (tax rate, reporting requirements)?

A: At present, we have exemption; If there is duty, it is part of the landed cost of materials, if known at the time of import. Otherwise we charge it off

Q: 4) How do you handle taxes on exports (tax rate, reporting requirements)?

A: At present, N/A

Q: 5) Do you have companies with plants in foreign countries?

Explanation: "Foreign plants" functions (SD/MM integration)

A: N/A

Q: 6) What are the tax reporting requirements?

A: N/A

Q: 7) How do you calculate taxes if there are cash discounts?

Explanation: Is tax calculated on the amount after cash discount?

A: N/A

Q: 8) To which G/L accounts will taxes be posted?

A: N/A

Q: 9) Do you use a particular exchange rate for taxes? If so, please specify.

A: N/A1.1.5. Withholding Tax

Questions:

24

Q: 1) What are the reporting requirements for contractors, self-employed etc. in your country?

A: N/A

Q: 2) How do you transmit this information to the tax authorities and your vendors?

A: N/A

1.2. General Ledger Accounting1.2.1. Postings in G/L

1.2.1.1. Park G/L Account Document

Questions:

Q: 1) What is your procedure for parking and releasing documents?

A: Authority levels are established in the system

1.2.1.2. G/L Account Posting

Questions:

Q: 1) What types of general ledger transactions do you process?

Explanation: Check document types

A: List given

Q: 2) Which internal documents do you need to print?

A: All documents, when required

1.2.1.3. Recurring Entry

Questions:

Q: 1) Do you have documents that occur on a regular basis (monthly or quarterly, for example)?

A: Yes, given separately

1.2.1.4. Document Reversal

Questions:

25

Q: 1) How should a document reversal update the balances of the relevant accounts?

A: There should be trace

Q: 2) Do you want to define a specific document type for reverse documents?

A: Yes

1.2.2. General Ledger Account Analysis1.2.2.1. General Ledger Line item Analysis

Questions:

Q: 1) Is there certain information that you wish to be able to display when you view items online?

A: Required for all GL accounts

1.2.3. Account Clearing [GL]1.2.3.1. Automatic Clearing

Questions:

Q: 1) By what criteria do you clear open items?

A: When the system automatically closes them

1.2.4. Closing Operations

Questions:

Q: 1) Which internal and external evaluations belong to month-end closing?

A: ?

Q: 2) Which processes do you use to prepare the month-end closing reports?

A: We have a manual process

Q: 3) Describe your current process and time frame for year-end closing.

26

A: 3 weeks

Q: 4) How do you specifically handle reporting for taxes on sales and purchases and other statutory requirements?

A: N/A

Q: 5) What are your reconciliation procedures?

Explanation: Within Financial Accounting: (Does G/L accounting tally with sub ledger accounting? Does Financial Accounting tally with Materials Management, Assets Accounting, Controlling, and so on?)

A: All open items; All sub ledgers

1.2.4.1. Regroup Receivables/Payables

Questions:

Q: 1) Do you classify open vendor/customer items in the financial statements according to short, medium, or long term receivables/payables? Describe your procedure.

A: We need this1.2.4.2. GR/IR Clearing Account Maintenance

Questions:

Q: 1) Do you show goods receipts without an invoice and invoices without goods receipts separately in your balance sheet reporting?

A: Yes

1.2.4.3. Financial Statement Creation

Questions:

Q: 1) Do you create financial statements on a monthly, quarterly or yearly basis?

A: Everyday

1.2.4.4. Periodic Reports

27

Questions:

Q: 1) Which periodic reports do you carry out in general ledger accounting?

Explanation: see subsidiary ledgers too.

A: IS, BS, CFS, Flash and monthly reports

Q: 2) What type of information flow do you have for the results of periodic asset reporting?

A: Depreciation, additions, deletions, audit format GL reconciliation

Q: 3) What are the critical monthly, quarterly and annual reports that you need for Asset Accounting?

A: Depreciation, additions, deletions, audit format GL reconciliation & capitalization

Q: 4) Which kind of reports do you use to reconcile asset accounting with the general ledger?

A: Manually done

Q: 5) Are there any particular reports you would like for low value assets?

A: Yes

Q: 6) Are there any particular reports you run for leased assets?

A: As of now there is no report

Q: 7) How do you create your inventory lists? Do you use barcodes?

A: Yes

Q: 8) By which organizational units (or combinations of units) are asset reporting functions structured (for example, company, cost center etc)?

A: Company / Cost Centers

1.2.4.5. Carry Forward G/L Balances

Questions:28

Q: 1) How many retained earnings accounts do you have?

A: ? Profit & Loss Account, General Reserve, Statutory Reserve, Voluntary Reserve

1.2.5. Integration

Questions:

Q: 1) How should the areas asset accounting, overhead cost controlling, materials management, payroll, and sales and distribution be integrated with general ledger accounting?

Explanation: You should also give consideration to special account assignments and document summarizations.

A: SAP integration acceptable

1.3. Accounts Payable1.3.1. Vendor Down Payments

Questions:

Q: 1) In which cases do your vendors require you to make a payment prior to the processing of an order or shipment?

Explanation: Comment for PS: Note that it is possible to schedule a down payment in the invoicing plan for an externally processed or general costs activity, or for an externally procured material component within the project.

A: Advance payment upon issuing P.O.

Q: 2) Please describe the complete process currently in place for down payments, including the postings that are generated.

Explanation: Comment for PS: Note that it is possible to schedule a down payment in the invoicing plan for an externally processed or general costs activity, or for an externally procured material component within the project.

29

A: As per SOP

Q: 3) Do you plan on paying down payments with the automatic payment program?YES

Explanation: Comment for PS: The transfer posting of cash items is a process that takes place at the end of the period. It must be carried out before you can see the current cash items in the project.

A: [ ] Yes [ ] No.

1.3.2. Invoices and Credit Memos

Questions:

Q: 1) What are your internal procedures and controls from the point of invoice receipt to payment?

Explanation: Course of action for invoice verification without MM

A: Record of invoices received; record of invoices not received; receipt of goods and services; billing as per order; approval authority, etc

1.3.2.1. Vendor Document Parking

Questions:

Q: 1) What is your procedure for parking and releasing invoices and or/credit memos?

A: Authority levels

1.3.2.2. Invoice Receipt

Questions:

Q: 1) Which invoices that are not related to a purchase order do you typically post?

A: Based on agreements; Government/ statutory payments

Q: 2) Describe any taxes that must be calculated on vendor transactions.

30

A: N/A

Q: 3) How do you handle cash discounts?

Explanation: Gross or net procedure?

A: When P.O. is issued, net procedure

Q: 4) Is your cash discount base net or gross?

Explanation: Taxes on sales/purchases Taxes on sales/purchases

A: Net1.3.2.3. Vendor Credit Memo

Questions:

Q: 1) How do you process vendor credit memos?

Explanation: Clearing or disbursement?

A: We reduce from invoices due for regular suppliers; Others we insist on payments

1.3.2.4. Document Reversal

Questions:


A: It should be traceable

Q: 2) Do you want do define a specific document type for reverse documents?

A: Yes

1.3.2.5. Recurring Entry

Questions:


31

A: Yes ( Rent, Gas )

1.3.3. Vendor Account Analysis1.3.3.1. Vendor Line Item Analysis

Questions:

Q: 1) Is there certain information that you wish to be able to display when you view vendor postings online?

A: Account / name/ address/ dues/ received not paid

1.3.3.2. Balance Analysis

Questions:

Q: 1) Which online analysis options do you use?

A: Online analysis on vendor level not GL level

1.3.3.3. Vendor Account Evaluations

Questions:

Q: 1) Which evaluations do you need for vendors?

A: Order – supply – invoice receipt dates

1.3.4. Vendor Payments

Questions:

Q: 1) Which payment methods do you use (check, bank transfers, bills of exchange, direct debit, etc.)?

A: Mainly bank transfersQ: 2) How do you pay your domestic vendors (by check, bank transfer etc.)?

A: Both

Q: 3) How do you pay your employees (e.g. travel expenses)?

Explanation: Are you using the HR module? Are accounts managed for each employee?

32

A: Bank transfer, cash and checksWe want to manage employee account

Q: 4) How do you handle partial payments to vendors?

A: N/A

Q: 5) Do you always issue a single payment for multiple invoices to the same vendor? If not please specify the exceptions.

A: Yes

Q: 6) How do you handle payables to vendors that are also customers?

Explanation: Separate payment? Clearing?

A: ? Normally we don’t net off

Q: 7) How do you process credit memos from vendors?

Explanation: Clearing or payment?

A: We net of against invoices

Q: 8) How do you handle cash discounts?

Explanation: Gross or net procedure?

A: Net

Q: 12) Do you use pre numbered checks?

A: [x]Yes [ ]No

Q: 13) How do you reconcile your check register (cleared checks)?

A: Manually done

Q: 14) How do you transfer your electronic payment file to the bank?

A:1.3.4.1. Vendor Payment Request

Questions:33

Q: 1) In which cases do your vendors require you to make payment before the date of required payment on the invoice?

Explanation: Observe account determination for this special G/L transaction.

A: Not normally1.3.4.2. Release for Payment

Questions:

Q: 1) How do you release invoices that have been blocked for payment?

Explanation: Observe possible blocking reasons.

A: We need blocking option1.3.4.3. Manual Outgoing Payments

Questions:

Q: 1) In what cases do you use manual payments to vendors?

A: In exceptional cases, when suppliers need payments very urgently

Q: 2) Do you print or hand-write the payment media (for example, debit memo forms)?

A: Print1.3.4.4. Automatic Outgoing Payments

Questions:

Q: 1) How do you post payments? Which G/L accounts are used? Which additional account assignments (for example, cost centers) do you need for bank postings, bank charges ac counts, cash discount accounts, and exchange rate differences?

A: SAP standard settings OK

Q: 2) Do you wish to clear vendor invoices at the time of payment or at the time the bank statement is posted?

34

Explanation: Payment method indicator: Selecting payment order and not payment posting means that the payment program: does not post a payment document does not clear the paid items. does not clear the paid items. Instead, a payment order is created and saved. The information contained therein can be used to clear the item at a later date. contained therein can be used to clear the item at a later date. The posting of the payment occurs with the account statement of the bank and selection of the associated open items via entry of the payment order. payment order. The paid items are locked until the payment is posted. This means that they cannot be used in other clearing transactions or further payment runs.

A: At the time of payment

Q: 3) Do you enter payments automatically based on an electronic bank statement? Describe in detail how these payments are processed.

Explanation: Observe collection procedure, for example

A: Not done now

Q: 4) How often do you make automatic payments?

A: Daily

Q: 5) Which bank account(s) are used for payments? List the bank accounts by payment method, by foreign currency, or any other criteria relevant for bank selection.


Q: 6) How does your actual cash position influence the way you assign funds to the different banks in the payment program?

Explanation: Maintenance of available amounts

A: For major payments, we have to check cash position

Q: 7) How do you handle bank charges?

Explanation: Perhaps define account determination

A: Manual Entry35

1.3.4.5. Vendor Payment Medium Creation

Questions:

Q: 1) For which incoming payments do you create payment medium forms (incoming bills of exchange, for example)?

A: N/A at present

Q: 2) Which incoming payments are made electronically?

A: N/A at present

Q: 3) Do you use your own number management for checks (check management)?0A: [x]Yes

[ ]No

1.3.5. Account Clearing [AP]

Questions:

Q: 1) In which cases are open items cleared other than through payment receipts?Advance payment and partial payment.

Explanation: Note: With advance payments and offsetting, clearing has to be done afterwards.0A:

1.3.5.1. Automatic Clearing

Questions:


A: good received / BG

1.3.6. Interest Calculation [A/P]

Questions:

Q: 1) For which vendo00rs do you calculate interest?

A: no body now

36

1.3.6.1. Vendor Account Balance Interest Calculation

Questions:

Q: 1) Which interest rates do you use?

A: N/A now

Q: 2) How do you post interest charges?

A: N/A now1.3.6.2. 00Calculation of Interest on Arrears – Vendors

N/A now

Questions:

Q: 1) After how many days do you calculate interest on overdue amounts?0A: N/A now

Q: 2) Which interest rates do you charge different vendor groups?

A: N/A now

Q: 3) How do you handle credit memos?

A: pay against vendor a/c


A: N/A now

1.3.7. Correspondence with Vendors1.3.7.1. Correspondence with Vendors

Questions:

Q: 1) What correspondence (such as balance confirmation) and internal evaluations (such as internal documents) do you create for your vendors?Fax and email

37

Explanation: Correspondence is the written communication that is sent by the company to vendors. Internal evaluations serve as the internal documentation of business transactions with vendors.000A:

1.4. Accounts Receivable1.4.1. Customer Down Payments

Questions:

Q: 1) In which cases do you require your customers to make a payment prior to the processing an invoice or delivery?

Urea local sales Explanation: Comment for PS: It is possible to schedule customer down payments in the project billing plan in WBS elements that have the indicator "Billing element".00A:

Q: 2) What is the complete process for down payments, including the postings that are generated?

0Explanation: Comment for PS: Note that it is possible to configure the use of milestones such that a down payment request is automatically triggered. When the milestone is completed, the request is generated by the settlement run.

A: SAP standard settings accetable

Q: 3) Do you plan on paying down payments with the automatic payment program? (direct debit)

Explanation: Comment for PS: The transfer posting of cash items is a process that takes place at the end of the period. It must be carried out b0efore you can see the current cash items in the project.

A: [ x ]Yes [ ]No

Q: 4) Do you plan on dunning down payments request?

A: [ x]Yes

38

[ ]No

1.4.1.1. Customer Down Payment

Questions:0Q: 1) How do you process customer down payments?

N/A nowExplanation: Identification for separate reconciliation accounts

A: N/A now

Q: 2) How are these down payments cleared with the customer account?

A: N/A now

Q: 3) Are some customer down payments related to projects?

A0: Not generally1.4.2. Invoices and Credit Memos

1.4.2.1. Customer Document Parking

Questions:

Q: 1) Do customer invoices require any type of approval before they are posted?

A: yes

Q: 2) What is your procedure for parking and releasing invoices and or/credit memos?

A: work flow1.4.2.2. Outgoing Invoice

Questions:

Q: 1) Which document types and document number ranges do you use?0A: SAP

Q: 2) Can you use templates for some of these invoices?

yesExplanation: Reference documents, for example

39

A: yes

1.4.2.3. Customer Credit Memo

Questions:

Q0: 1) How do you process customer credit memos?---

Explanation: Clearing or disbursement?

A: Adjust to account1.4.2.4. Document Reversal

Questions:


A: yes0Q: 2) Do you want do define a specific document type for reverse documents?

A: Yes1.4.2.5. Recurring Entry

00Questions:


A: Yes

1.4.3. Account Analysis [A/R]1.4.3.1. Customer Line Item Analysis

Questions:

Q: 1) Is there any p0articular information that you wish to represent when representing customer postings online?

A: [ x ]Yes. [ ]No

40

1.4.3.2. Balance Analysis

Questions:

Q: 1) Which online analysis options do you use?

A: open item ageing 1.4.3.3. 0Credit Management Analysis

Questions:

Q: 1) Which procedures do you have in place to control your customers' credit limits?

N/A nowExplanation: Time of credit limit check; Relevant documents for the credit limit check; Consequences of credit limit check (Notification of person responsible, locking of documents and so on)

A: ageing1.4.3.4. Customer Evaluations

0Questions:

Q: 1) Which evaluations do you need for customers?Usual normal SAP settings

A:1.4.4. 0Customer Payments

Questions:

Q: 1) Which payment procedure do your customers use? (Check, bank transfer, bill of exchange, debit memo procedure)

A: Bank transfer - now

Q: 2) How do you handle payment differences?

Explanation: For example, charging off, creating residual items, partial payment0A: Transfer to account

Q: 3) Are payment differences posted automatically?

A: N/A now

41

Q: 4) Do your customers provide reason codes for discrepancies in payments?

A: N/A now

1.4.4.1. Payment Advice Note Processing

Questions:0

Q: 1) Do you receive payment advices from your customers?

A: [x ]Yes [ ]No

Q: 2) Do you enter payment advices manually prior to applying the payments?

A: [ x ]Yes [ ]No

1.4.4.2. 0Release for Payment

Questions:

Q: 1) How do you release invoices that have been blocked for payment?

Explanation: Observe possible blocking reasons / workflow

A: appropriate authority sanctions

1.4.4.3. Manual Incoming Payments

Questions:

Q: 1) Which procedure do you use to enter customer payments?

Explanation: Time of customer payment, time of customer payment notice/account statement

A: On receipt of money at our banksQ: 2) Which payment procedure do your customers use? (Check, bank transfer, bill of exchange, debit memo procedure)

42

A: Bank transfers at present

Q: 3) Do you print or hand-write the payment media (for example, debit memo forms)?

A: Yes1.4.4.4. Automatic Incoming Payments

Questions:

Q: 1) How do you post payments? Which G/L accounts are used? Which addition00al account assignments (for example, cost centers) do you need for bank postings, bank charges ac counts, cash discount accounts, and exchange rate differences?

A: SAP standard

Q: 2) Do you process automatic payments for your customers, such as direct debits and bills of exchange? Please describe in detail how these payments are processed.

A: N/A now

Q: 3) Do you enter payments automatically based on an electronic bank statement? Describe in detail how these payments are processed.

Explanation: Observe collection procedure, for example

A: Not now

1.4.4.5. Customer Payment Medium Creation

Questions:

Q: 1) For which incoming payments do you create payment medium forms (incoming bills of exchange, for example)?

A: N/A

Bill of Exchange Receivable

Questions:

43

Q: 1) Do your customers use bills of exchange to pay? Describe this procedure in detail.

A: No1.4.4.6. Manual Payment by Bill of Exchange

Questions:

Q: 1) If you process manual payments, do you want the option of directly entering a check or a bill of exchange?

A: N/A now

1.4.4.7. Bill of Exchange Usage

Questions:

Q: 1) Do you intend to issue bills of exchange to customers?

A: no

1.4.5. Account Clearing [AR]

Questions:

Q: 1) In which cases are open items cleared other than through payment receipts?

Explanation: Note: With advance payments and offsetting, clearing has to be done afterwards.

A: Invoice cancellations1.4.5.1. Automatic Clearing

Questions:


A: Against receipts

1.4.6. Dunning Notice1.4.6.1. Automatic Dunning

Questions:

Q: 1) After how many days do you intend to issue a dunning notice?

44

A: first day after due date ( daily) , weekly for marketing (internally)

Q: 2) What is the dunning frequency?

A: weekly external – alternate day internal

Q: 3) Do you dun various customer groups at different intervals?

A: yes

Q: 4) Which types of dunning do you use?

A: correspondence to customers

Q: 5) How many dunning levels do you have?

A: 4Q: 6) Which organizational units are responsible for dunning (for example, company code, division)?

A: Finance and marketing

Q: 7) Do you calculate dunning interest or charge a dunning fee?

A: yes

Q: 8) In which cases do you dun a vendor?Advance payment / excess payment / on a quarterly / yearly basisA: Advance payment - monthly basis// excess payment – weekly basis

1.4.7. Interest Calculation [A/R] 1.4.7.1. Customer Account Balance Interest Calculation

Questions:

Q: 1) For which customers do you calculate interest on balances?

A: N/A now


A: N/A now

Q: 3) How do you post interest charges?45

A: N/A now

Q: 4) What types of notices do you send to your customers and how often?

A: N/A now

1.4.7.2. Calculation of Interest on Arrears - Customers

Questions:

Q: 1) After how many days do you calculate interest on overdue amounts?

A: N/A now

Q: 2) Which interest rates do you apply to your different groups of cu00000stomers?

A: N/A now

Q: 3) How do you handle credit memos?

A: N/A now


A: N/A now

Q: 5) What types of notices do you send to your customers and how often?

A0: N/A now

1.4.8. Correspondence with Customers1.4.8.1. Correspondence with Customers

Questions:0Q: 1) What sort of correspondence (account statements, balance confirmations, for example) and internal evaluations (internal

46

documents, account balances, open item lists, for example) do you create for your customers?

Explanation: Correspondence is the written communication that is sent by the company to customers. Internal evaluations serve as the internal documentation of business transactions with customers.

A: Standard SAP features

1.5. Bank Accounting1.5.1. 0Incomings

1.5.1.1. Cash Journal

Questions:

Q: 1) How do you manage incoming cash?

A: Refer to discussions with Treasurer

Q: 2) For which business transactions are incoming cash journal postings made?

A: Scrap sales/ miscellaneous cash sales?

00Q: 3) How are these business transactions posted?

A: SAP settings1.5.1.2. Manual Account Statement

Questions:

Q: 1) What specific information do your bank statements contain (for example, invoice numbers)?

A: Normal – no invoice numbers

Q: 2) Does you house bank transfer business transaction codes with the ba0nk statements to help you classify the postings?

A: Not now

Q: 3) Outline the posting steps for typical bank statement postings.

A0: Normal Sap settings

47

Q: 4) Which payment methods do you process using the FI payment program?

A: ?

Q: 5) Do you process these payment methods via separate clearing accounts?

A: ?

Q: 6) Do you want to distinguish between posting documents for manual and electronic bank statements for accounting and reporting purposes?0A: Yes

1.5.1.3. Check Deposit Transaction

Questions:

Q: 1) How many checks do you present to your house banks per day?

A: About 100 per week

Q: 2) Do you enter checks from customers manually or electronically?

A: Manually0Q: 3) What information given by the check issuer can be used to allocate items (check number, invoice number)?

A: invoice number

Q: 4) Sketch the posting steps for check deposits (are checks posted directly to customer accounts or via clearing accounts)?

A: Via clearing accounts

Q: 5) Do you want to separate check postings for general ledger accounting and sub ledger accounting?0A: SAP settings OK

1.5.1.4. Bill of Exchange Presentation (Debit)

Questions:48

Q: 1) Do you want to monitor the bills of exchange presented?

A: NA

1.5.1.5. Cash Journal

Questions:

Q: 1) How do you manage incoming cash?

A: Normal cash planning

Q: 2) For which business transactions are incoming cash journal postings made?

A: ?

Q: 3) How are these business transactions posted?

A:? 1.5.2. Check Management

1.5.2.1. Manage Check Balance

Questions:

Q: 1) Do you use pre numbered checks, or do you assign your checks numbers from self-defined number ranges?

A: [X ]Yes [ ]No

1.5.3. Account Balance Interest Calculation1.5.3.1. Account Balance Interest Calculation

Questions:

Q: 1) For which G/L accounts do you calculate interest on balances? Give a brief description.

A: Not done now / bank loan account?


A: Variable

49


A: N/A

Q: 4) Do you combine the debit and credit balances of different accounts for interest calculation?

Explanation: Cash pooling involves the fictitious combination of debit and credit balances on accounts. Interest is calculated on the pooled overall balance.

A: N/A

1.6. Special Purpose Ledger

2. Asset Accounting

Questions:

Q: 1) Are any of your asset values managed in a foreign currency? If so, specify the relevant countries and currencies.

A: no now

Q: 2) Does the fiscal year for asset accounting correspond to the calendar year? If not, specify the start and end dates of your fiscal year.

A: yes

Q: 3) Is your enterprise currently using a shortened fiscal year, or you have used a shortened fiscal year in the past, for which you want the R/3 System to recalculate depreciation as part of the asset data transfer?

A: [ ]Yes [ x]No

Q: 4) Is your enterprise required to calculate mid-month or mid-year depreciation?

A: [ X ]Yes mid year review50

[ ]No

2.1. Handling Fixed Assets2.1.1. Asset Maintenance

2.1.1.1. Creation of Master Record for Tangible Assets

Questions:

Q: 1) Do you need to manage and depreciate certain parts of your asset portfolio in the form of group assets?

A: yes

Q: 2) Who is responsible for creating asset master records? Who provides which information?

A: ECO, IO, MA

Q: 3) Which organizational units and/or which functional areas have authorization for creating or displaying asset master records?

A: ?

Q: 4) The asset master record can be divided up into tab pages. How should the asset master record field groups be ordered for your organization?SAP possible

Explanation: Customizing layout of screen layout and assignment to asset class.

A: SAP standard

2.1.1.2. Asset Master Record Change

Questions:

Q: 1) In your enterprise, who has authorization to change asset master records? For which areas? Are these authorized individuals different from those who create the master records?

A: no same people

Q: 2) How often is it necessary to change your asset master records? Which parts of the asset master record are most often affected?

51

A: frequently

Q: 3) Are there certain asset master record fields that need to be protected against changes? If so, which fields?yes

Explanation: It is possible to define non-changeable display fields in the asset master record screen layout.

A:

2.1.1.3. Mass Change

Questions:

Q: 1) In your enterprise, who has authorization to change a large number of assets simultaneously?

A: MA CFA FM

Q: 2) Do you need to make changes to a large number of assets simultaneously?

A: [X ]Yes [ ]No

Q: 3) If so, under what circumstances? Please describe.

A: Occasionally

2.1.2. Receipts

Questions:

Q: 1) Does your organization have a specific amount, above which purchases are to be capitalized as fixed assets? If so, what is this amount?

Bd 1000Explanation: Amount limit for low-value assets

A: low value amount

2.1.2.1. Direct Acquisition of Internal Activity52

Questions:

Q: 1) Are some services (or internal activities) capitalized (such as legal costs or consultancy charges)?

A: yes

Q: 2) Do you activate costs for internal activity using: - Production order - Investment measure - Asset under construction - Direct capitalization - Other?

A: yes

Q: 3) For reporting, would you like separate capitalized internal activities using different transaction types?

A: yes

2.1.2.2. Processing of Asset Acquisition

Questions:

Q: 1) Describe the information flow for asset acquisitions in your enterprise.

A: PO then invoice

Q: 2) Describe your capital procurement requirements.

A: Budget proposed with commercial elevation - budget approval and PO

Q: 3) What types of acquisition occur in your enterprise?

yesExplanation: Acquisition integrated via invoice receipt/goods receipt (Logistics - Materials Management) Acquisition via goods receipt - accounts payable accounting Acquisition with automatic clearing account offsetting entry

A: net booking

Q: 4) Are asset acquisitions posted on a net basis (deducting any discounts) or as a gross amount (discounts are deducted only on payment)?

53

Explanation: Document type settings: Net document type indicator

A: Net basis

Q: 5) Do you want to show acquisitions to certain depreciation areas differently than you do in the book depreciation area (for example, to fulfill certain cost-accounting, tax or group requirements)?

A: no now

Q: 6) Do you post goods receipt to assets valuated or non-valuated?

A: yes

Q: 7) Do you want down payments for assets to be shown separately?

A: Information required

Q: 8) If using asset sub-numbering, do you want to permit asset acquisitions only to the main number in the year of capitalization, and post all later acquisitions to sub-numbers?

A: yes

Q: 9) Do you keep a record of costs using acquisitions to the asset under construction? yes

A: Yes

Q: 10) Do you plan and budget for capital investments in your enterprise? Should assets that are capitalized directly also be included in the planning and budgeting processes?

A: yes

Q: 11) Which is the procedure from invoice receipt to posting of capitalization? Outline the different steps.

A: inv then CWIP then capitalization

2.1.2.3. Subsequent Acquisition

Questions:

54

Q: 1) Under what circumstances do you intend to post subsequent acquisitions to previously capitalized fixed assets?

A: major addition, replacement of major parts impairment

2.1.3. Depreciation2.1.3.1. Creation of Reserves from Gain from Asset

Retirement

Questions:

Q: 1) Under what circumstances do you intend to create reserves from profits realized on the sale of fixed assets?

A: N/A now

2.1.3.2. Reserves Carry forward

Questions:

Q: 1) Do you create reserves for fixed assets?

A: [ ]Yes [ x]No

Q: 2) If so, provide examples. How do you post? What are the reasons?

A: NA

2.1.3.3. Depreciation Processing

Questions:

Q: 1) What are the methods of depreciation that you are currently using?

A: straight line for co and

Q: 2) Do you calculate depreciation values to the day?

A: no

Q: 3) In certain cases do you change over from declining-balance depreciation to straight-line depreciation? If so, when?

55

A: N/A now

Q: 4) Do you want to allow negative depreciation for certain assets or categories of assets? If so, please specify.

A: N/A now

Q: 5) Do you distinguish between a fixed and a variable depreciation portion?

A: N/A now

Q: 6) How do you handle the period control for depreciation values?

A: monthly

2.1.3.4. Manual Depreciation Planning

Questions:

Q: 1) In which cases do you need to start depreciation manually?

A: no

Q: 2) How often do you use the manual depreciation function?

A: N/A now

Q: 3) When do you use unplanned depreciation?We needA:

2.1.3.5. Depreciation Posting

Questions:

Q: 1) Is it necessary, from a business point of view, to post depreciation directly to cost accounting? If so, which receivers are to be debited (for example, cost centers, internal orders)?

A: cost centers

Q: 2) How often do you intend to post depreciation to the general ledger and to cost accounting?

56

A: monthly

Q: 3) Do you post depreciation to assets under construction?

A: no

Q: 4) To which account(s) is depreciation posted?

A: list

Q: 5) Do you want to show interest only in reports, or do you want to post interest directly to cost accounting?

A: yes

2.1.3.6. Unit-of-Production Depreciation

Questions:

Q: 1) Do you use the unit of production method for certain assets? If so, please specify.

A: not now

2.1.4. Business Transactions2.1.4.1. Settlement of Asset under Construction

Questions:

Q: 1) Do you wish to manage "Assets under construction" in Asset Accounting? If yes, describe the capitalization process.

Yes it will flow from PSExplanation: 1. Classic asset under construction or investment measure

A:

Q: 2) What is the timing for the capitalization process?

A: immediately upon transfer to use

Q: 3) With respect to capitalization, are you bound by specific laws?

A: [ ]Yes [ x]No

57

Q: 4) Is it possible that an asset under construction is capitalized as a low value asset?

A: not possible now

Q: 5) Do you intend to use summary settlement or line item settlement for assets under construction?

A: facility

Q: 6) To which receiver(s) do you settle assets under construction?

A: asset

Q: 7) Do you use partial capitalization?

A: [x ]Yes [ ]No

Q: 8) What kind of information flow do you have for when an investment measure is completed and the asset under construction is ready for settlement to the final asset?

A: technical completion

Q: 9) Do you display down payments to assets under construction separately?

A: [ x]Yes [ ]No

Q: 10) What kind of information flow do you have for the settlement of down payments? BG

A: BG related information2.1.4.2. Post-capitalization

Questions:

Q: 1) What circumstances make post-capitalization necessary in your enterprise? One amount on the asset should have a different depreciation start date than the original asset -

58

Explanation: For example: - Someone neglected to capitalize an asset (if so, for what reason?) - One amount on the asset should have a different depreciation start date than the original asset - Other

A: delays in capitalization should have facility to capitalize with retrospective dates

Q: 2) How do you intend to post post-capitalization: - Gross, that is, with historical values (APC and depreciation)- Net, that is, depreciation begins on the posting date using the net book value.

A: no

Q: 3) Do you want to post to a separate sub-number for post-capitalization?

A: Not required2.1.4.3. Write-up

Questions:

Q: 1) Do the value of your assets appreciate, and if so, do your ledgers need to be adjusted?

A: It is possible

Q: 2) Describe the reasons for a fixed asset revaluation, the process used, and give examples of the assets which are to be revaluated.

A: If there is one, it will be based on professional technical valuation and done periodically

2.1.4.4. Reposting

Questions:

Q: 1) Is it necessary to transfer assets from one company code to another?

N/A now

Explanation: Settings for company code transfer

A:

Q: 2) Do you sometimes split an asset into one or more new assets? If so, please specify.

59

A: N/A now

Q: 3) Do you transfer between different asset classes? Give examples.

A: N/A now

Q: 4) Is the changing of an assigned cost center or a business area, for example, a reason for a transfer posting?

A: N/A now

Q: 5) How do you find out about necessary transfer postings in asset accounting?

A: N/A now

2.1.5. Specific Valuations2.1.5.1. Closing of Insurance Contract

Questions:

Q: 1) Do you want to display insurance values for your fixed or leased assets?

A: [x ]Yes [ ]No

Q: 2) With which insurance companies do you have insurance agreements?

A: BNI

Q: 3) Are your low value assets part of an insurance contract?

A: [ x ]Yes [ ]No

Q: 4) What is the basis for the calculation of an asset's insurable value?

60

A: expert valuation

Q: 5) Do you index your insurance values?

A: sometime

Q: 6) Do you intend to use a separate asset valuation area for your insurance values?

A: no

Q: 7) Is there any interaction between insurance of assets and your leasing agreements?

A: no

Q: 8) How do you wish to make your insurance payments?

A: normal PO

2.1.5.2. Revaluation

Questions:

Q: 1) Do you carry out fixed asset revaluations? If so, give examples

A: yes / bank with account

2.1.6. Group Requirements2.1.6.1. Transfer Within a Client

Questions:

Q: 1) What are your enterprise and/or statutory requirements for transferring assets to associated companies?

A: N/A now

2.1.6.2. Creation of Master Record for Tangible Assets

Questions:

61

Q: 1) Do you need to manage and depreciate certain parts of your asset portfolio in the form of group assets?

A: N/A now

Q: 2) Who is responsible for creating asset maser records? Who provides which information?

A: PA

Q: 3) Which organizational units and/or which functional areas have authorization for creating or displaying asset master records?

A: Finance

Q: 4) The asset master record can be divided up into tab pages. How should the asset master record field groups be ordered for your organization?

SAP orderExplanation: Customizing layout of screen layout and assignment to asset class.

A:

2.1.7. Retirements2.1.7.1. Retirement

Questions:

Q: 1) How and when is asset accounting informed of the retirement of an asset?

A: when replacing asset

Q: 2) Do you sell or transfer assets to affiliated/associated companies?

A: [ ]Yes [ ]No N/A now

62

Q: 3) How do you process retirement of a low value asset (e.g. retirement with zero value; retirement with revenue; account assignment for retirement with revenue)?

A: SAP procedure will be followed

Q: 4) Who issues invoices for asset sales?

A: Finance2.1.7.2. Mass Retirement

Questions:

Q: 1) When retiring assets, is there ever a need to retire a large number of assets at the same time?

A: Yes

Q: 2) If yes, how many assets are normally concerned? Please provide an example with documents.

A: Very rare

2.1.8. Closing Operations [Asset Accounting]

Questions:

Q: 1) What activities are included in the month-end process for asset accounting?

A: Depreciation entry, reconciliation of fixed assets with GL

Q: 2) Which internal and external asset valuations belong to month-end closing process? Please provide a sample of all required valuations.

A: N/A

Q: 3) What activities are included in the year-end closing process for asset accounting?

A: Depreciation entry, reconciliation of fixed assets with GL

Q: 4) Which internal and external asset valuations belong to year-end closing process? Please provide a sample of all required valuations.

63

A: N/A2.1.8.1. Multiple Valuations

Questions:

Q: 1) Do you have parallel valuation for your asset, e.g. for group valuation, for cost accounting purposes or for legal reasons?

A: No, now

Q: 2) Do you have to valuate your assets in different currencies?

A: Not necessary

Q: 3) Is there a distinction necessary between book depreciation (for balance sheet) and tax values (for a tax balance sheet)?

A: No

2.1.8.2. Preparations for Year-End Closing in Asset Management

Questions:


A: December 31

Q: 2) Do you run the year-end closing process in asset accounting separate from general ledger?

A: No

Q: 3) Are leased assets treated like any other fixed assets in year-end closing?

A: N/A now

2.1.8.3. Depreciation Simulation / Forecast

Questions:

Q: 1) Do you simulate retirements of low value assets in your asset history sheet?

64

A: Yes

Q: 2) Do you wish to use different methods of valuation or different depreciation methods in your simulation? If so please specify.

A: Mainly Straight Line Method; but options can be there for projection.


Questions:


A: MA / FM


A: [x]Yes [ ]No


A: When a revaluation on balance life/ replacement value is done2.1.8.5. Recalculation of Depreciation

Questions:

Q: 1) Does it sometimes occur that you need to change depreciation methods or calculation rules during the course of a fiscal year? If so, please provide an example and reason why a change was necessary).

A: Yes; for catalysts, mainly

Q: 2) Does it sometimes occur that you introduce a new depreciation valuation area during the course of a fiscal year? If so, please provide an example and reason why a new valuation area was necessary).

A: Provision should be there

65

2.1.8.6. Depreciation posting

Questions:


A: Yes


A: Monthly


A: No


A: List Given


A: To be posted

2.1.8.7. Carry Out Year-End Closing in Asset Management

Questions:

Q: 1) How do you conduct the physical inventory for fixed assets (e.g. manually, using barcode scanner)?

A: Random selection / manual verificationQ: 2) Who is responsible for the physical inventory of the fixed assets?

A: PA

Q: 3) What is the relation between the inventory number of an asset and the number of the asset master record?

A: NA

66

Q: 4) Do you create inventory lists using the SAP R/3 System, or using a non-SAP system?

A: NO2.1.8.8. Periodic Reports

Questions:


Explanation: See subsidiary ledgers too.

A: Monthly management report


A: ?


A: Depreciation, additions, deletions & audit schedule


A: We want to see the reconciliation in the screenQ: 5) Are there any particular reports you would like for low value assets?

A: Department wise reports for maintaining physical control


A: Yes


A: N/A

2.2. Handling of Leased Assets

67

Questions:

Q: 1) What kind of leasing agreements do you normally make? Operating leases (not necessarily shown in Asset Accounting) or Capital Leases (Asset capitalized)?

A: N/A

2.2.1. Asset Maintenance2.2.1.1. Asset Master Record Change

Questions:

Q: 1) Do you transfer your assets from one legal entity to another?

A: [ ]Yes [x]No

Q: 2) If not transferred between legal entities, do you create a new master record when location changes?

A: No

Q: 3) Describe possible ways of processing changes in location. What procedures are currently in place?

A: We want to record

Q: 4) Does changing of location apply to low value assets?

A: [x]Yes [ ]No


Questions:


A: MA/FM


A: [x]Yes68

[ ] No


A: Time dependant data

2.2.2. Receipts2.2.2.1. Acquisition of Leased Asset

Questions:

Q: 1) Who is responsible for the acquisition of a leased asset? Who will negotiate the leasing agreement?

A: N/A now

Q: 2) Describe the process for the acquisition of a leased asset, from the purchase order to capitalization in Asset Accounting.

A: N/A now

2.2.3. Depreciation2.2.3.1. Depreciation Processing

Questions:

Q: 1) What are the methods of depreciation that you are currently using?

A: Straight Line Method

Q: 2) Which depreciation method is used particularly for leased assets?

A: N/A Q: 3) Do you calculate depreciation values to the day?

A: MonthlyQ: 4) In certain cases do you change over from a declining-balance depreciation to straight-line depreciation? If so, when?

A: N/A

Q: 5) Do you want to allow negative depreciation for certain assets or categories of assets? If so, please specify.

69

A: Not now

Q: 6) Do you distinguish between a fixed and a variable depreciation portion?

A: No

Q: 7) How do you handle the period control for depreciation values?

A: Manual

2.2.3.2. Depreciation Posting

Questions:


A: Yes


A: Monthly


A: No


A: List given


A: Post to Cost Accounting

2.2.4. Business Transactions2.2.4.1. Transfer Leased Asset

Questions:

Q: 1) Do you transfer leased assets between companies?

A: [ ]Yes70

[x] No

Q: 2) Would a transfer of a leased asset affect the leasing agreement? If so, please describe.

A: N/A2.2.4.2. Change in a Leasing Agreement N/A

Questions:

Q: 1) How often are changes in a leasing agreement necessary?

A: N/A

Q: 2) What type of changes are most frequent? Provide examples.

A: N/A

Q: 3) In cases where changes to a leasing agreement are necessary, how many assets would be affected?

A: N/A

Q: 4) Does a change of location affect your leasing agreement? In what way?N/AA:

Q: 5) What is the information flow in your enterprise regarding a change in asset location or a change of an asset to a different organizational unit?

A: N/A

Lease Payment N/A

Questions:

Q: 1) Describe the payment conditions of your leasing agreements. Differentiate if necessary between different kinds of agreements.

A: N/A

Q: 2) How often are your leasing payments due?

A: N/A

71

2.2.5. Specific Valuations2.2.5.1. Closing of Insurance Contract

Questions:

Q: 1) Do you want to display insurance values for your fixed or leased assets?

A: [x]Yes [ ]No

Q: 2) With which insurance companies do you have insurance agreements?

A: BNI

Q: 3) Are your low value assets part of an insurance contract?

A: [x]Yes [ ]No

Q: 4) What is the basis for the calculation of an asset's insurable value?

A: External assessment

Q: 5) Do you index your insurance values?

A: Sometimes

Q: 6) Do you intend to use a separate asset valuation area for your insurance values?

A: No

Q: 7) Is there any interaction between insurance of assets and your leasing agreements?

A: N/A

Q: 8) How do you wish to make your insurance payments?

A: Separately through AP

72

2.2.6. Retirements2.2.6.1. Retirement of Leased Asset N/A

Questions:

Q: 1) What are the reasons for retiring a leased asset?

A: N/A

Q: 2) What is your process for retiring leased assets? Please describe the postings.

A: N/A.Q: 3) Do you normally buy leased assets after expiration of the leasing contract or do you return them to the lessor?

A: N/A

2.2.7. Closing Operations

Questions:

Q: 1) What activities are included in the month-end process for asset accounting?

A: SAP

Q: 2) Which internal and external asset valuations belong to month-end closing process? Please provide a sample of all required valuations.

A: SAP

Q: 3) What activities are included in the year-end closing process for asset accounting?

A: SAP

Q: 4) Which internal and external asset valuations belong to year-end closing process? Please provide a sample of all required valuations.

A: SAP

73

2.2.7.1. Multiple Valuations

Questions:

Q: 1) Do you have parallel valuation for your asset, e.g. for group valuation, for cost accounting purposes or for legal reasons?

A: SAP

Q: 2) Do you have to valuate your assets in different currencies?

A: SAP

Q: 3) Is there a distinction necessary between book depreciation (for balance sheet) and tax values (for a tax balance sheet)?

A: SAP2.2.7.2. Preparations for Year-End Closing in Asset

Management

Questions:


A: 31st December

Q: 2) Do you run the year-end closing process in asset accounting separate from general ledger?

A: Yes, now

Q: 3) Are leased assets treated like any other fixed assets in year-end closing?

A: NA

2.2.7.3. Depreciation Simulation / Forecast

Questions:

Q: 1) Do you include planned capital investments in addition to capitalized assets when forecasting depreciation?

A: [X ]Yes [ ]No

74

Q: 2) Describe the process for distributing planned depreciation. For example, do you distribute based on asset class, cost centers or estimate the percentage depreciated?

A: Yes

Q: 3) Do you simulate retirements of low value assets in your asset history sheet?

A: Yes

Q: 4) Do you wish to use different methods of valuation or different depreciation methods in your simulation? If so please specify.

A: Yes

Q: 5) Do you include additional asset transactions in the simulation? If so, which transactions are relevant?

A: NA2.2.7.4. Mass Change

Questions:


A: MA/FM


A: [ X ]Yes [ ]No


A: Revaluation of life/ values

2.2.7.5. Recalculation of Depreciation

Questions:

Q: 1) Does it sometimes occur that you need to change depreciation methods or calculation rules during the course of a fiscal year? If so, please provide an example and reason why a change was necessary).

75

A: No

Q: 2) Does it sometimes occur that you introduce a new depreciation valuation area during the course of a fiscal year? If so, please provide an example and reason why a new valuation area was necessary).

A: Normally not2.2.7.6. Depreciation Posting

Questions:


A: No


A: Monthly


A: No


A: List given


A: Post to const accounting also2.2.7.7. Carry Out Year-End Closing in Asset

Management

Questions:

Q: 1) How do you conduct the physical inventory for fixed assets (e.g. manually, using barcode scanner)?

A: Manually using the labels

76

Q: 2) Who is responsible for the physical inventory of the fixed assets?

A: Individual department managers

Q: 3) What is the relation between the inventory number of an asset and the number of the asset master record?

A: NA

Q: 4) Do you create inventory lists using the SAP R/3 System, or using a non-SAP system?

A: SAP system2.2.7.8. Periodic Reports

Questions:


Explanation: see subsidiary ledgers too.

A: Normal financials, management reports on performance


A: ?


A: Standard reports on additions, deletions, depreciation, audit schedule, etc


A: Audit schedule reconciling GL and assets accounting

Q: 5) Are there any particular reports you would like for low value assets?

A: Location-wise, line items for controlling

77

Q: 6) Are there any particular reports you run for leased assets?

A: NA


A: Yes


A: Company/ cost centers

78

Business BlueprintCONTROLLING

BALCO

BAHRAIN

Created by:

Date of creation:

Changed by:

Date of the last changes:

Version:

_______________ ______________________ ______________________

79

Sign Off Date Signature Customer Signature Consulting

D. Organization

1.Cross-Application/Central Organizational Units1.1. Controlling Area

Questions:

Q: 1) Note on controlling area:

Explanation: OSS note 107293: Decision criteria for or against cross-company code cost accounting.

A: Controlling Area with Cross company code

Q: 2) Are you using one centralized controlling system or do you follow a decentralized approach with several independent controlling systems?

Explanation: Are you using one centralized controlling system (system from an organizational viewpoint) or do you follow a decentralized approach with several independent controlling systems? (Decentralized means that, from a management viewpoint, your organization is considered as independent entities)

A: Yes

Q: 3) Provided that company codes use the same chart of accounts and fiscal year variant: Which company code(s) do you want to assign to your controlling area(s)?

A: Company code BALCO is assigned to Controlling Area BALCO

Q: 4) If you have multiple controlling areas: Do you intend to have management charge-outs (allocations) across those controlling areas?

A: NA

Q: 5) If you wish to have unified Controlling, which currency or currencies are you planning to use?

Explanation: When using transfer prices, the controlling area currency 10 (= company code currency) or 30 (=group currency) must be used.

80

A: Group Currency, BHD

Q: 6) Which chart of accounts do you want to use in your controlling area?

A: BALCO

1.2. Profit Center

Questions:

Q: 1) Which criteria do you use for dividing your organization into internal areas of responsibility?

Explanation: In other words, do you need to report on profit and loss data together with balance sheet items for each strategic business unit (SBU)?

A: Product wise – Ammonia, Urea, Methanol, Utilities, Production Overheads and Corporate overheads (inclusive of Marketing)

Q: 2) Do you want to structure your profit center accounting using the cost-of-sales method (revenue minus cost-of-sales), or using period accounting (all revenues minus all costs incurred in the period +/- inventory changes)?

Explanation: Note: If you require the cost-of-sales accounting method, you need to use the functional areas.

A: NA, Period Accounting. The report required for getting the cost of sales accounting would be met with either ABAP or BIW reports. It would be based on the profit center and cost center accounting sub-modules.

Q: 3) Can you make unique profit center assignments for the following master data: material/plant, cost center, sales order item, PSP elements, cost objects, internal orders etc.?

A: Yes

Q: 4) As well as the "actual" profit centers, do you use any other profit center, which provides services for various other profit centers (a service profit center)?

A: Production overheads and Corporate overheads would be as Profit Center other than Products

Q: 5) If you require internal views for your organization's profits other than those in the profit center hierarchy, specify additional groups/hierarchies.

A: NA

81

Q: 6) Do you want Consolidation (EC-CS) to be based on Profit Center Accounting (management-oriented consolidation)?

A: NA

Q: 7) Do you want to use a unified, integrated user layout for the maintenance of your enterprise organization in the SAP system? is there a serial number to identify each piece of equipment from your production department and or

Explanation: The enterprise organization developed from the HR organizational structure. Accounting-specific functions and organizational units were added to it. The following reports are currently integrated in the enterprise organization: - HR organizational structure - cost center standard hierarchy - profit center standard hierarchy In this way, the enterprise organization allows you to view the company from the view of: - responsibility for personnel - responsibility for costs - responsibility for revenues

A: To be discussed with HR

Q: 8) Can the structure of your Profit Center (standard hierarchy) be directly derived from the enterprise organization?

A: To be discussed with HR

1.3. Operating Concern

Questions:

Q: 1) Are you using one central profitability controlling system (system from an organizational viewpoint) or do you follow a decentralized approach with several independent profitability controlling systems?

Explanation: Note: This means that different enterprise branches are independent of each other, which does not enable you to analyze their results usefully.

A: One Profitability controlling system. The idea of the operating concern is to get segmental reports other than the product-wise for eg., you can derive profitability for customers, regions etc.,

Q: 2) In SAP the operating concern is an organizational unit that spans one or more controlling areas. Describe which controlling area(s) you want to assign to your Operating Concern(s)!

A: Controlling Area BALCO would be assigned to Operating Concern BALCO

Q: 3) What currency should be used for the operating concern? Do you require additional evaluations in the company code currencies that correspond to FI?

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Explanation: If you work with countries whose currencies are liable to extreme exchange rate fluctuations, your data should be updated in company code currency.

A: [ ]Yes [ ]No

Additional currency USD is required other than the BHD.

E. Master Data1.Revenue and Cost Controlling

1.1. Overhead Cost Controlling1.1.1. Cost Element

1.1.1.1. Primary Cost Element

Questions:

Q: 1) Define primary cost elements based on the definition of the chart of account.

A: List enclosed, Yes based on BALCO Charts of Accounts

Q: 2) Reserve a number range in the chart of accounts for the definition of CO-specific accounts/primary cost elements: which additional primary cost elements do you need (such as for accruals)?

A: The number range would be similar to the number range of the Charts of Accounts

1.1.1.2. Secondary Cost Element

Questions:

Q: 1) Define secondary cost elements for planning, allocation and reporting purposes.

A:a) Internal Activity b) Assessment

1.1.1.3. Cost Element Group

Questions:

Q: 1) Define cost element groups for planning, allocation, and reporting purposes.

A:

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1.1.2. Cost Center1.1.2.1. Cost Center

Questions:

Q: 1) Define cost centers as the lowest level in your organizational structure at which you hold one person responsible for the expenses incurred (check whether you have covered the whole organization).

A:

1.1.2.2. Standard Hierarchy for Cost Centers

Questions:

Q: 1) Take your corporate organizational structure and build a hierarchy according to levels of responsibilities, with cost centers as the lowest level.

A: BALCO Standard Hierarchy

1.1.2.3. Cost Center Group

Questions:

Q: 1) Besides the standard hierarchy, do you need other alternative structure (groups) of cost centers (for planning, allocation, and reporting purposes)?

A: NA

1.1.3. Activity Type1.1.3.1. Activity Type

Questions:

Q: 1) Define the type of activity performed by each cost center. Do this by defining one or more measurable activity type(s) for each cost center.

A:1. Staff costs2. Operating Supplies3. Maintenance costs4. Production Overheads5. Corporate overheads6. Finance Charges7. Depreciation

Q: 2) Since activity types are posted as secondary cost elements, have you specified the secondary cost elements to which you want to assign the activity type (one-to-one, or one cost element for more than one activity type)?

A:1. Staff costs2. Operating Supplies3. Maintenance costs4. Production Overheads

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5. Corporate overheads6. Finance Charges7. Depreciation

1.1.3.2. Activity Type Group

Questions:

Q: 1) Group your activity types into different categories or similar attributes for planning, allocation and reporting purposes.

A: BALCO Activity Group

1.1.4. Statistical Key Figures1.1.4.1. Statistical Key Figures

Questions:

Q: 1) Which statistical key figures do you want to use for allocations and reporting (such as telephone units, headcount, and so on)?

A: Yet to be defined

1.1.4.2. Statistical Key Figure Group

Questions:

Q: 1) Define groups of statistical key figures (such as the group for all headcount statistical figures).

A: Yet to be defined

1.1.5. Business Process1.1.5.1. Business Process

Questions:

Q: 1) Do you want to define business processes across different areas of your organization and plan, enter, and allocate overhead costs on the basis of these?

Explanation: Unlike activity types, business processes can receive costs from more than one cost center. The process costs can then either be allocated to Cost Object Controlling, or to Profitability Analysis.

A: [ ]Yes [ X ]No

Q: 2) Define your business processes (such as sales-order processing).

A: NA

1.1.5.2. Standard Hierarchy for Business Processes

Questions:

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Q: 1) Define the standard hierarchy of processes for planning, allocating and reporting business process costs.

A: NA

1.1.5.3. Business Process Group

Questions:

Q: 1) Do you group your business processes alternatively by categories or similar attributes so that you can plan, allocate and report on aggregated levels?

A: NA

1.1.6. Internal Order

Questions:

Q: 1) What business criteria do you use to classify your internal orders (for example, overhead orders, accrual orders, investment orders, statistical orders, and so on)?

A:a) BALCO is required to map the cost of various vehicles, Employeesb) BALCO has assets under construction for building their capital assets

The accrual expenses of P&M orders which are not certified by the maintenance department, how these can be captured?

Q: 2) What are the types of orders that will be used in the controlling area (such as investments, marketing, etc.)?

A:

1. Statistical Internal Orders – For Vehicle expenses, Employee Tracking2. Investment orders – For Asset under construction3. Conference orders – To track the expenses of the conference convened by

BALCO4. Capital orders which are worthy to be capitalized or charged off

Q: 3) Should some of the orders be used for information purposes only - that is, should the real posting be on the cost center?

A: Yes, the cost of vehicles and employees are required to have real posting to cost centers and statistical posting to the orders for information purposes.

1.2. Product Cost Controlling1.2.1. Procurement Alternative

Questions:

Q: 1) Are you working with multiple supply sources (different vendors) or multiple production methods (in-house production and subcontracting) for the same material?

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A: NA

1.2.2. Cost Component

Questions:

Q: 1) Define the structure of your product cost components (40 cost components max)!

A:a. Gasb. Electricityc. Catalystd. Chemicalse. Bagsf. Staff costsg. Maintenance h. Operating Suppliesi. Production Overheadsj. Finance Chargesk. Depreciation

Q: 2) Which cost components should be part of the product’s standard price?

A:l. Gasm. Electricityn. Catalysto. Chemicalsp. Bagsq. Staff costsr. Maintenance s. Operating Suppliest. Factory Overheadsu. Finance Chargesv. Depreciation

Q: 3) Define the calculation method for each cost component.

Explanation: Define the calculation method for each cost component: 1. Activity quantity x activity price 2. Material quantity x price (standard price, moving average price, purchasing info record......) 3. Process quantity x process price 4. Percentage overhead

A:1. Raw material = Material Quantity X Moving Average Price2. Semi-finished products = Material Quantity X Standard Price3. Finished products = Material Quantity X Standard Price

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Q: 4) Do you require an alternative structure that breaks down the activity and process costs in accordance with their original costs (such as wages, salaries, energy, depreciation)?

A: NA

Q: 5) Which cost components should be part of the product's cost of goods manufactured in Profitability Analysis?

A: NA

1.2.3. Product Cost Collectors

Questions:

Q: 1) If you are working with period-based controlling, do you want to have one cost collector for each production method or for each material?

A: BALCO is a repetitive manufacturing and being in Chemical Industry, we would be using period based controlling. Yes, we would want to have cost collector for each material.

1.2.4. Material Ledger Data

Questions:

Q: 1) Do you intend to value the material with more than one currency or valuation approach? What are those currencies/approaches?

A: NA

Q: 2) Do you want to make subsequent allocations of variances (from purchasing, production) for raw materials and material produced in-house?

A: NA

Q: 3) Do you want to differentiate between procurement alternatives and manufacturing processes for your actual costs?

A: NA

1.3. Profitability Analysis1.3.1. Characteristics

1.3.1.1. Characteristic Definition

Questions:

Q: 1) List the dimensions (characteristics) that you want to create contribution margin accounting for, according to your reporting requirements.

Explanation: Examples of characteristics: - Region - Sales organization - ...

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A:1. Customer 2. Consignee (Ship to Party)3. Product4. Region5. Country

1.3.1.2. Characteristic Values

Questions:

Q: 1) For the characteristics defined in the previous question, specify values (such as, regions: North, west, east, south)

A:a. Customer –

i. SABICii. PIC

b. Producti. Ureaii. Methanoliii. Ammoniaiv. Bagged Urea

c. Regioni. Far eastii. South east asiaiii. Americaiv. Europev. India

d. Countrye. Consignee

1.3.1.3. Characteristic Derivation

Questions:

Q: 1) List the terms (characteriestics) that do not have master data, and state how they are dependent on other criteria.

A: Characteristics derivation can be done as follows:

f. Customer = Customer from the Sales & Distribution Moduleg. Product = Material from the Sales & Distribution Moduleh. Region = Region from ship to party from the Sales & Distribution

Modulei. Consignee = Ship to Party from Sales & Distribition Module

Q: 2) List the terms (characteristics) that are dependent on each other in a hierarchy.

Explanation: Examples: Determine sales office, region

A: NA

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1.3.2. Value Fields1.3.2.1. Definition of Value Fields

Questions:

Q: 1) Define the report rows (value fields) that you wish to analyze.

A:1. C&F Price2. COGM3. Freight 4. Insurance5. Demurrages / Dispatch6. Inspection Charges7. Marketing Fees8. Terminal ling9. Wharf Charges10. Agency Commission11. Others

Q: 2) Are you interested only in the revenues and costs that are directly related to product sales?

A: Yes

Q: 3) Do you also wish to see other product-related overhead costs?

A: No, since all the costs of the product and overheads are directly allocable to the products, there are no separate overheads which need to be captured separately here.

Q: 4) Do you also wish to see other income or expenditures that are not related to your regular business activity (e.g. product production or sales)?

A: NA

Q: 5) Decide which value fields can be posted as reconcilable with FI (true), and which are to be filled with accrual valuations.

A: To be discussed

1.3.3. Condition Types1.3.3.1. Definition of Condition Types

Questions:

Q: 1) Do you want information on accrued values for your result information, that are not defined as conditions in SD, or do you require user-defined condition types in CO-PA for planning purposes?

A: NA

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F. Business Processes1.Revenue and Cost Controlling

1.1. Profit and Cost Planning1.1.1. Cost and Activity Planning

1.1.1.1. Copy Plan from Previous Year to Cost Center Planning

Questions:

Q: 1) Describe your planning process. How do you plan cost centers?

A: The cost centers are planned at the beginning of the year based on the budgets approved by the management.

Q: 2) Do you want to create your cost center/activity plan based on the planned values of the previous year? (If so, what is the source of this data and in what form is it stored?

A: No, BALCO has new budgets for all the cost center / activity every year approved by the management.

1.1.1.2. Copy Actual Data to Cost Center Plan

Questions:


A: Cost centers are departments or responsibility centers who give their budget which is approved by the management at the beginning of the year.

Q: 2) Do you want to create your cost center/activity plan based on the actual values of the previous year? (If so, what is the source of this data and in what form is it stored?

A: No

1.1.1.3. Redefinition of Plan Version

Questions:


A: The cost centers are planned at the beginning of the year based on the budgets approved by the management.

Q: 2) Do you want to represent different planning scenarios in parallel?

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A: To take a decision, they have 3 levels of planninga) Each department gives budget for the yearb) Budget Committee/GM/MD makes some changes for the budgets

submitted by the departmentsc) Board then finally approves the budgetThe plan is to have all the three budgets as different versions so that these different versions can be available for reference later.

1.1.1.4. Planning Revaluation

Questions:

Q: 1) Do you carry out revaluation (increases or decreases for certain cost elements in certain cost centers)?

A: Yes

1.1.1.5. Budget Planning

Questions:

Q: 1) Does your organization use the type of budgeting described in the documentation field?

Explanation: Cost center budgeting allows an organization to enter a summarized budgeted value for a specific cost center/cost centers. Additionally, this budget can then be subjected to availability control which takes into account both actual expenditure plus commitments (subtracted from the budget). Do you perform this kind of budget control within your organization ?

A: Yes

1.1.1.6. Order Budgeting

Questions:

Q: 1) Do you want to plan and control the budget of the order using availability checks?

Explanation: Budgeting for orders makes it possible to create a total budget value for a given order or given orders. In addition, you can carry out an availability control for this budget that includes both actual expenses and commitments (deducted from the budget). Do you use this type of budget control in your enterprise?

A: Yes, This would be mainly used for asset under construction through Project Systems.

1.1.1.7. Activity Type Planning

Questions:

Q: 1) Comment on activity type planning

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Explanation: Note that when you plan activity types (define the allocation base per activity type for the cost center), you define important control parameters, such as price determination (manual or iterative), plan and actual allocation (direct activity allocation, target=actual allocation, and so on), and how actual fixed costs are handled (proportionally or using pre-distribution). The default values taken from the activity type can be overwritten in planning.

A: Yes, activity planning for the cost centers would be used for all production cost centers to load the cost of various fixed costs such salaries & wages, maintenance costs, depreciation, administration overheads etc., to the cost of the product.

1.1.1.8. Definition of Activity Type for Cost Center

Questions:

Q: 1) Comment on defining activity types by cost center

Explanation: This process variant is only relevant if you perform actual costing. This controlling strategy also requires you to plan by activity types (define allocation bases/activity type in each cost center). You can specify <1> as the activity quantity. You need to plan the activity type in order for the cost center (and the subsequent activity price calculation) can recognize it. This entails defining some important control indicators, such as price determination (iterative) and actual allocation (direct or indirect activity allocation). The default values taken from the activity type can be overwritten in planning.

A: Yes, the activity price calculation is based on the activity quantity. Activity quantity would be the production quantity to derive the cost of the activity per unit of production.

1.1.1.9. Transfer of Statistical Key Figures from LIS (Plan)

Questions:

Q: 1) Are statistical key figures kept in the logistics modules, which you want to use as a basis for allocations and reporting purposes?

A: Statistical key figures are being used for allocation of administration overheads to the products. Yet to define the Statistical key figure.

1.1.1.10. Transfer of Depreciation/Interest (Activity-Independent)

Questions:

Q: 1) If you are also implementing SAP R/3 Asset Management (FI-AA), do you wish to transfer the results of the Asset Management depreciation simulation calculation as part of your planning in Controlling (CO) for depreciation expenses?

Explanation: Ensure that the corresponding assets are assigned to the appropriate cost centers.

A: Yes, all the assets would be assigned to the respective cost centers. Hence periodic deprecation would be also directly transferred to the controlling module

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to the respective cost centers. Activity dependent would be transferred for indirect cost centers like administration, finance etc.,

1.1.1.11. Transfer of Depreciation/Interest (Activity-Dependent)

Questions:

Q: 1) If you are also implementing SAP R/3 Asset Management (FI-AA), do you wish to transfer the results of the Asset Management depreciation simulation calculation as part of your planning in Controlling (CO) for depreciation expenses?

Explanation: Ensure that the corresponding assets are assigned to the appropriate cost centers.

A: Yes, all the assets would be assigned to the respective cost centers. Hence periodic deprecation would be also directly transferred to the controlling module to the respective cost centers. Activity dependent would be transferred for direct production cost center like ammonia urea etc.,

1.1.1.12. Transfer of Personnel Costs

Questions:

Q: 1) If you are also implementing SAP R/3 Human Resources, do you want to transfer the results of personnel cost planning to Controlling (CO) as part of your planning for personnel expenses?

A: No

1.1.1.13. Transfer of Scheduled Activity PP -> CO-ABC

Questions:

Q: 1) If you are implementing SAP R/3 manufacturing modules, do you want to transfer activity requirements from sales & operations planning (SOP), long-term planning, or MRP to Controlling (CO-ABC) as scheduled activities?

Explanation: (and update the relevant business process with the corresponding scheduled activity)

A: NA

1.1.1.14. Transfer of Scheduled Activity from PP to CO-OM-CCA

Questions:

Q: 1) If you implementing the SAP R/3 production modules, do you want to transfer the activity requirements from sales and operations planning (SOP), long-term planning, or MRP to Controlling (CO-CCA) as the scheduled production activities?

A: NA

1.1.1.15. Primary Cost Planning (Full Costs)

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Questions:

Q: 1) Which procedure do you use for manual planning of primary costs, when you have costs that are not transferred from other modules, such as HR or FI-AA?

Explanation: Examples are energy costs, maintenance costs, and so on.

A: Manual planning would be done based on the cost center planning for costs other than FI-AA.

1.1.1.16. Primary Cost Planning (Prop./Fixed)

Questions:

Q: 1) Which procedure do you use for manual planning of primary costs, when you have costs that are not transferred from other modules, such as HR or FI-AA?

Explanation: Examples are energy costs, maintenance costs, and so on.

A: Manual planning would be done based on the cost center planning for costs other than FI-AA.

1.1.1.17. Secondary Cost Planning (Full Costs)

Questions:

Q: 1) Do you want to represent activity relationships between cost centers in your planning?

A: NA, the relation is established between cost centers and secondary cost element based on the planned assessment cycles.

1.1.1.18. Secondary Cost Planning (Prop./Fixed)

Questions:

Q: 1) Do you want to represent activity relationships between cost centers in your planning?

A: NA, the relation is established between cost centers and secondary cost element based on the planned assessment cycles.

1.1.1.19. Cost Element Planning (Order with Integrated Planning)

Questions:

Q: 1) Do you want to use integrated internal orders in cost center planning (such as repair orders, marketing orders) and settle them to cost centers after planning at the cost element level?

A: NA

1.1.1.20. Cost Element Planning (Order)

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Questions:

Q: 1) Do you want to plan costs at the cost element level on overhead cost orders?

A: NA

1.1.1.21. Overall Planning (Order)

Questions:

Q: 1) Do you want to plan overall costs (values only, independent of cost elements) on overhead cost orders?

A: NA

1.1.1.22. Unit Costing (Order)

Questions:

Q: 1) Do you want to enter planning data in your planning for overhead cost orders, as well as the cost element information?

Explanation: Example is the entry of planning data for the use of materials, and so on.

A: NA

1.1.1.23. Easy Cost Planning and Execution Services (CO)

Questions:

Q: 1) Are you using internal orders for temporary job cost controlling and want to plan costs? If so, you can plan the costs with the Easy Cost Planning function.

A: NA

Q: 2) Do you want to trigger subsequent processes based on the planned resources? If so, you can use the Execution Services function from the cost estimate in Easy Cost Planning.

Explanation: Possible subsequent processes: Purchase requisition, purchase order, material reservation, material withdrawal, activity and process allocation.

A: NA

1.1.1.24. Periodic Reposting of Plan Data

Questions:

Q: 1) Do you periodically move costs from a project/cost center (such as telephone costs) to other projects/cost centers?

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A: Yes, the costs incurred in the Factory overheads cost centers needs to be allocated to the production cost centers based on such tracing factor. Hence the cost needs to be periodically moved from a cost center to other cost centers.

Q: 2) Did you define the basis for these allocations (such as, percentage, statistical key figures, for example telephone units consumed, and so on)?

A: The basis of allocations would have to be defined but the basis would be on statistical key figures

1.1.1.25. Cost Accrual - Plan

Questions:

Q: 1) Describe how accruals are planned for actual data.

Explanation: Define the cost elements that should be accrued using the target=actual method (cost element category 04). Define the cost elements that you want to accrue with imputed tack-on costs (cost element category 03). For the latter, identify the basis (cost elements) to be used as the basis for accrual calculation.

A: NA

1.1.1.26. Process Cost Planning

Questions:

Q: 1) State how you want to transfer the plan values from Cost Center Accounting to your business processes.

A: NA

1.1.1.27. Overhead Calculation (Cost Center)

Questions:

Q: 1) Do you plan to allocate a certain type of costs/expenses to cost centers automatically using overhead rates?

A: NA

1.1.1.28. Overhead Calculation (Business Process)

Questions:

Q: 1) What costs is the cost estimate based on when you compute overhead for internal orders?

A: NA

Q: 2) Specify the overhead rates.

A: NA

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Q: 3) Will you perform automatic recovery of overheads on specific types of costs/expenses?

A: [ ]Yes [X]No

Q: 4) List the different groups of costs/expenses (for example, applying a fixed percentage rate for recovery of overhead to material issues).

A: NA

Q: 5) For each assignment type, do you distribute overhead as a fixed percentage or based on the actual total costs?

A: NA

Q: 6) Describe in detail how each of these assignments is performed today in your organization.

A: NA

Q: 7) What postings do the assignments create?

A: NA

Q: 8) Describe in detail how each of these allocations is performed today in your organization.

A: Presently the allocations of overheads are done based on %. The % are derived based on the previous years guidelines.

Q: 9) Do you assign overhead expenses to projects?

A: NA

Q: 10) For each allocation category, do you distribute overhead as a fixed percentage or based on the actual total costs?

A: The allocation category would be based on the actual total costs.

Q: 11) If you use fixed percentages for assignments, how do you handle remaining variances?

A: NA

Q: 12) For each of these assignments, what causes the overhead (for example, direct labor expense, labor hours, total WBS expense, others)?

A: NA


A: NA

Q: 14) Define overhead rates.

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A: NA


A: [ ]Yes [ ]No

Q: 16) Do you want to define a percentage for the overhead rate in the cost object?

A: NA

Q: 17) Do you want to define automatic allocation using overhead rates for a certain type of costs/expenses on orders?

A: NA

Q: 18) Do you want to add a percentage for overhead to the production cost collector?

A: NA


A: NA

Q: 20) Do you perform automatic overhead allocation for specific types of costs/expenses?

A: NA


A: NA


Explanation: Caution: When you calculate overhead for cost objects that are credited with the standard cost of goods manufactured times the quantity received in stock, this overhead should also be contained in the calculated standard cost of goods manufactured (according to the adjusted standard cost estimate).

A: NA


A: NA

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Q: 24) What costs are the overhead rates based on?

A: NA

Q: 25) Are there any overhead expenses that are not calculated with reference to the production order but are to be assigned directly to the sales order?

Explanation: Example: Overhead costs for sales and administration.

A: NA

Q: 26) How often do you calculate your planned overhead?

Explanation: The Schedule Manager is well suited to performing periodic allocations. The program selects project objects, permits error correction, and continues the process.

A: NA

Q: 27) Who is responsible for reconciling the run? (This person will be responsible for running/monitoring planned overhead.)

A: Management Accountant

Q: 28) Do you calculate overhead for all objects at once or individually for each object. (Detailed calculation can affect system performance.)

A: NA

Q: 29) Do you have a specific plan version when you calculate overhead?

A: NA

Q: 30) Is overhead calculated for your projects?

A: To be discussed

Q: 31) Is the planned overhead the same as the actual overhead?

A: No

Q: 32) Describe how you calculate overhead for (1) direct costs (2) indirect costs (3) fixed costs (4) variable costs).

A: Presently we are charging based on %. Now we are going to debit the direct costs to the cost center and indirect costs would be based on the tracing factors.

Q: 33) Do you include sales and marketing and general and administrative costs in your overhead calculation?

A: No, we want to charge only factory overheads to the products, corporate overheads would not be allocated to the products.

Q: 34) Do you reconcile planned and actual overhead?

A: Yes

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Q: 35) Do you process actual overhead on a project by project basis or overall?

A: NA

Q: 36) Do you have project-type-specific overhead calculations?

A: NA

Q: 37) Do you have different overhead costs for each business unit?

A: NA

Q: 38) Do you calculate overhead on materials/labor?

A: NA

Q: 39) At what level of detail do you plan for overhead?

A: The overheads are calculated for Factory overheads, corporate overheads

Q: 40) Do you calculate percentage overhead?

A: NA

Q: 41) Is the calculation dependent on time periods?

A: Monthly

Q: 42) What is the basis for the overhead costs?

A: The overhead costs are based on the planned and actual total costs

Q: 43) Is the basis for overhead planned costs the same as the basis for actual overhead costs?

A: Yes

Q: 44) What is the formula/schema for applying overhead costs?

A: Assessment & Distribution Cycles

Q: 45) How often do you calculate overhead costs?

A: Monthly

Q: 46) To which accounts/cost elements are the overhead costs posted?

A: Distribution – Primary and Assessment - Secondary cost elements

Q: 47) Does the basis for the overhead costs change during the lifecycle of the project?

A: Yes

Q: 48) Who is responsible for overhead costs? (This person is responsible for running the overhead calculation.)

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A: Budget Accountant/Management Accountant

Q: 49) Do you evaluate interest charges throughout the project hierarchy?

A: Yes

1.1.1.29. Overhead Calculation (Overhead Cost Order)

Questions:


A: NA



A: NA


A: NA

1.1.1.30. Plan Cost Distribution

Questions:

Q: 1) Do you want to distribute costs from a cost center or a cost center group to CO objects (cost center, orders, WBS element), and keep the original cost element from the sender in the receiver object?

A: NA


A:

1.1.1.31. Settlement of Overhead Cost Orders (Planning Data)

Questions:

Q: 1) Do you collect costs/expenses on an internal order that you want represented on a cost center?

Explanation: Example: The "Vehicles" department can plan an internal order for each truck to monitor the maintenance costs of each vehicle. The planned order

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costs are allocated to the appropriate cost center. This lets the cost center managers analyze their vehicle costs together with other costs, such as electricity, water, and so on.

A: Yes, Vehicle, Telephone & Employees

Q: 2) If so, do you want to be able to see the costs of the cost center (settlement under the original cost element)?

A: To be discussed

Q: 3) Or do you want to summarize/aggregate the costs on the cost center (using one or more secondary settlement cost elements)?

A: To be discussed

Q: 4) At which level of detail should the costs be transferred?

A: To be discussed

1.1.1.32. Plan Cost Assessment

Questions:

Q: 1) Do you allocation costs from one cost center / group from cost centers to other CO objects (cost centers, orders, WBS elements) by summarizing the original cost elements from the sender cost center(s) into one secondary assessment cost element?

A: Yes, Plan cost Assessment is required to transfer Factory overheads (Administration cost centers) to the production cost centers based on the secondary assessment cost element.


A: The basis of allocations is based on the statistical key figures

1.1.1.33. Plan Reconciliation

Questions:

Q: 1) Do you need to reconcile the demand for scheduled labor hours (activity types) with the available capacity?

A: NA

1.1.1.34. Splitting

Questions:

Q: 1) Do you have cases/situations where a cost element in cost center planning is related to more than one activity (activity type)? If so, see to it that the activity-independent planned costs are split to the activity types before you calculate the prices.

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A: Yes, the cost center planning is done based on the cost elements. There would be activity independent planned costs such as overheads which have to be assigned to certain activity.

Q: 2) Define rules for the split.

A:8. Staff costs9. Maintenance costs10. Administration costs11. Finance Charges12. Depreciation

Range of cost elements for the above activities needs to be defined.

1.1.1.35. Planned Price Calculation

Questions:

Q: 1) Do you want to calculate the planned price automatically or iteratively by dividing the planned costs for a cost center/activity type by the planned activity quantities (or capacities)?

Explanation: Internal activities are allocated using a secondary cost element. If you want to keep detailed information about the origin of costs such as electricity, depreciation, or maintenance per activity type, you can use a primary cost component split.

A: Calculate the planned price automatically or iteratively by dividing the planned costs for a cost center/activity type by the planned activity quantities.

Q: 2) Do you want to calculate planned prices automatically/iteratively for Activity-Based Costing by dividing the costs planned for the business process by the planned process quantity?

Explanation: Process costs are allocated using a secondary cost element. If you want to keep detailed information on the origin of the costs, you can use a primary cost component split.

A: NA

Q: 3) Do you want to display partial cost rates (primary cost split) for the planned prices that were calculated automatically/iteratively?

A: Yes

1.1.2. Product Cost Planning

Questions:

Q: 1) What types of costing do you want to use (adjusted standard, monthly, inventory, and so on)?

A: Standard cost method.

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Q: 2) Note: The following processes are located in the Logistics modules: preliminary costing (production order, product cost collector) and sales order costing

A: Product cost collector

1.1.2.1. Preparation for Costing

Questions:

Q: 1) Did you check if all the source data from other modules is available for calculating the production costs?

Explanation: Example Bills of material, routings, and work centers from PP (Production Planning) or raw material prices and purchasing information records from MM (Materials Management).

A: Yes

Q: 2) Which valuation approach are you going to use for externally procured materials, internal activities, external operations, or subcontracting (quotation or purchase order prices, including delivery costs and cash discounts)?

Explanation: Externally procured materials -> for example, moving average price, raw materials costing and so on. Internal activities -> periodic price, average price.

A:i. Externally procured materials - Moving Average priceii. Semi-finished materials - Standard priceiii. Internal activities - Periodic priceiv. External services - Quotation or purchase order prices

Q: 3) How do you want to allocate overhead in costing: using overhead rates or activity-based costing, or both?

Explanation: There are overheads in the production costs (allocation in actual data also), which debit more than one cost center or order. This means that you need to define allocation cost centers, or orders in Overhead Cost Controlling.

A: We are using activity based costing for allocating overheads in costing.

1.1.2.2. Standard Cost Estimate with Quantity Structure

Questions:

Q: 1) Do you plan your product costs using bills of material (BOM), routings, or dependencies? If not, how do you plan?

A: [X] Yes [ ] No

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Q: 2) Do you want the single components (gross price, delivery costs and so on) of the acquisition costs of the externally procured materials in the calculation cost splitting to be displayed separately?

A: Yes

Q: 3) Do you subcontract any of your manufacturing activities?

Explanation: Do you also provide bills of material for this purpose? Should overhead also be applied to these?

A: NA

Q: 4) Do your cost estimates contain costs that cannot be captured through BOMs, routings, overhead rates, or process cost allocation?

A: NA

Q: 5) Do you plan products that use materials belonging to another plant? If so, do these plants belong to the same company code?

A: NA

Q: 6) Do you want to analyze the cost of goods manufactured, split by organizational units involved in the value added process (plant, profit center, company code)?

Explanation: Example: Cost of goods manufactured are displayed separately by plant.

A: NA

Q: 7) Have different currencies been assigned to the organizational units involved in the costing?

A: NA

Q: 8) Do you want to break down your cost of goods manufactured into primary costs? If so, are you doing this for production, or simply to display the cost of sales in the profitability analysis?

Explanation: An example is breaking down production costs into cost-accounting depreciation, wages, and energy, and so on.

A: Yes, the break-up of the costs are mentioned in the cost component structurew. Gasx. Electricityy. Catalystz. Chemicalsaa. Bagsbb. Staff costscc. Maintenance & Operating Suppliesdd. Administration Overheadsee. Finance Chargesff. Depreciation

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Q: 9) If you are using mixed costing, what proportions of the individual procurement alternatives/manufacturing processes should be used as a basis for costing?

A: NA

1.1.2.3. Standard Cost Estimate Without Quantity Structure

Questions:

Q: 1) Since you are calculating your product costs without access to SAP quantity structure data, where are you getting the quantity information required for costing?

Explanation: Example: External PPS System

A: NA

Q: 2) Do you subcontract any of your manufacturing activities?

Explanation: Do you also provide bills of material for this purpose? Should overhead also be applied to these?

A: NA

Q: 3) Do you plan products that use materials belonging to another plant? If so, do these plants belong to the same company code?

A: NA

Q: 4) Do you want to analyze the cost of goods manufactured, split by organizational units involved in the value added process (plant, profit center, company code)?

Explanation: Example: Cost of goods manufactured are displayed separately by plant.

A: NA

Q: 5) Have different currencies been assigned to the organizational units involved in the costing?

A: NA

Q: 6) Do you want to break down your cost of goods manufactured into primary costs? If so, are you doing this for production, or simply to display the cost of sales in the profitability analysis?

Explanation: An example is breaking down production costs into cost-accounting depreciation, wages, and energy, and so on.

A: NA

1.1.2.4. Standard Cost Estimate for Co-Products

Questions:

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Q: 1) Do you have production processes that ever yield multiple products?

A: Yes

Q: 2) Which rules are used to distribute the costs of goods manufactured to the co-products?

A: Apportionment Structure, we generally transfer portion of costs of the main process to the co-products.

1.1.2.5. Costing Analysis

Questions:

Q: 1) Define your reporting requirements for product costing, and reconcile them with the standard SAP reports. Do you need customer-specific costing reports?

A: To be discussed

1.1.2.6. Price Release with Standard Cost Estimate

Questions:

Q: 1) Do you want to update your product costs (determined using standard costing) as standard prices in MM?

Explanation: This leads to revaluation of the material stock to the new standard price, if the material is valuated with the standard price.

A: Yes

Q: 2) Do you want to update your product costs (determined using other costings), such as inventory costing, as plan prices, or valuation prices based on tax law, and so on in MM (without stock revaluation)?

A: NA

1.1.2.7. Reference and Simulation Costing

Questions:

Q: 1) Do you want to cost material for which there is no material master in Materials Management (prototypes, research and development)?

A: NA

Q: 2) Do you require templates for the planned costs of sales orders, such as for selling services?

A: NA

1.1.2.8. Easy Cost Planning and Execution Services (CO)

Questions:

108

Q: 1) Are you using internal orders for temporary job cost controlling and want to plan costs? If so, you can plan the costs with the Easy Cost Planning function.

A:

Q: 2) Do you want to trigger subsequent processes based on the planned resources? If so, you can use the Execution Services function from the cost estimate in Easy Cost Planning.

Explanation: Possible subsequent processes: Purchase requisition, purchase order, material reservation, material withdrawal, activity and process allocation.

A:

1.1.3. Profit Center Planning

Questions:

Q: 1) Describe your planning processor. How do you plan the Profit Center?

A: BALCO does revenue planning of the profit center based on the planned production and projected prices of the products in the market.

1.1.3.1. Copy Plan from Previous Year -> Profit Center Planning

Questions:

Q: 1) Do you want to base your Profit Center Planning on the previous year's plan values? If yes, what is the source of this data and in what form is it available?

Explanation: The plan data of the previous year can be copied into the current year and be simultaneously revaluated via a percentage rate.

A: BALCO has budgets for every year separately approved by the management which would be taken for profit center planning

1.1.3.2. Copy Actual Costs -> Profit Center Planning

Questions:

Q: 1) Do you want to base your Profit Center Planning on the previous year's actual values? If yes, what is the source of this data and in what form is it available?

Explanation: The actual data of the previous year can be copied into the current year and be simultaneously revaluated via a percentage rate.

A: NA

1.1.3.3. Redefinition of Plan Version (Profit Center Planning)

Questions:

109

Q: 1) Do you want to represent different planning scenarios in parallel?

A: Yes, BALCO would like to have different planning scenarios for profit center planning

1.1.3.4. Excel Upload -> Profit Center Planning

Questions:

Q: 1) Are you planning in MS-Excel and planning to transfer this data to SAP Profit Center Accounting?

A: Yes

1.1.3.5. Plan Integration of Profit Centers

Questions:

Q: 1) Do you want to transfer plan data to PCA from other applications? From which application(s)?

Explanation: The plan version, from which data is transferred in the Profit Center Accounting, must also be defined in Profit Center Accounting.

A: NA

1.1.3.6. Manual Profit Center Planning

Questions:

Q: 1) Describe your process for manual profit center planning.

A: NA

Q: 2) Do you intend to use formula planning within the context of manual Profit Center Planning? Formula Planning How many of your quotations become orders, If few become orders consider not using the

A: NA

1.1.3.7. Profit Center Distribution: Plan

Questions:

Q: 1) Do you carry out distributions from one profit center to another profit center within the same controlling area?

Explanation: Allocation means that you want to copy the original cost element(s) from the sender PCTR to the receiver PCTR.

A: NA

1.1.3.8. Plan: Profit Center Assessment

Questions:

110

Q: 1) Do you assess values from one profit center to another within the same controlling area? code?

Explanation: Assessment means that you want to allocate the original cost elements using one or more assessment cost elements (secondary cost elements) instead of retaining the original cost element.

A: NA

1.1.3.9. Profit Center Analysis

Questions:

Q: 1) Define your report requirements within the context of Profit Center Planning and compare this with the SAP standard reports. Do you require customer-specific Profit Center Reports?

A: To be discussed

1.2. Actual Cost/Revenue Allocation1.2.1. Overhead Allocation

1.2.1.1. Direct Activity Assignment Using Time Sheet Processing

Questions:

Q: 1) Do you base direct activity allocation to CO objects on this data?

A: NA

Q: 2) How do employees record their working time (time, detail, medium/system)?

A: NA

1.2.1.2. Time Sheet Permit

Questions:

Q: 1) Explain the permit procedure for working time or recording of activity allocation for your employees.

A: NA

Q: 2) How many employees does the person responsible for approval manage?

Explanation: Consider using the CATS workflow to automate the approval process.

A: NA

1.2.1.3. Transfer Time Sheet Data to CO

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Questions:

Q: 1) Do you want to transfer recorded activity allocations to Controlling using the time sheet?

A: [ ]Yes [X]No

Q: 2) How often does this transfer take place (daily, weekly and so on)?

A: NA

Q: 3) Which time sheet-based reports do you require (for example, employee utilization, employee hours by cost center)?

A: NA

1.2.1.4. Time Sheet Report

Questions:

Q: 1) Do you need to see days that have not timesheet entries?

Explanation: There is a standard report for missing days.

A: NA

Q: 2) Do you need an evaluation, do see the days on which personnel enter more than a defined number of hours?

Explanation: There is a standard report for overtime.

A: NA

Q: 3) Do you have to see the employee name in the documents for the receiving component?

Explanation: Consider using a User Exit.

A: NA

Q: 4) Do different roles need to see different timesheet information? (If yes, create report variants.)

A: NA

1.2.1.5. Direct Activity Allocation (Controlling)

Questions:

Q: 1) Do you want to allocate costs manually from a sender cost center to a receiver (internal order, cost center, and so on) by valuating the added quantity with a price?

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Explanation: Example You settle 2 electrician hours from the electrician cost center to a receiving cost center, and 1 hour costs USD 50.

A: [ ]Yes [X]No

Q: 2) Describe your direct activity allocation processes.

A: NA

1.2.1.6. Transfer of Primary Costs to Cost Center/Order

Questions:

Q: 1) Create a matrix that contains the primary cost elements derived from the chart of accounts in the rows, and assign these to the possible account assignment objects (cost center, order).

Explanation: (Information on defining the field selection in FI/MM) (Information on defining the field selection in FI/MM) Assign these for cost elements that are always assigned to the same object number (cost center, order number, cost object). (Information on automatic account assignments to CO).

A: NA

1.2.1.7. Manual Funds Reservation

Questions:

Q: 1) For your organization, do you want to display manual funds reservation (manual commitments) for expected expenses, where you cannot yet foresee how they are incurred?

Explanation: This appears in the reports as commitments for the budget.

A: Yes to be discussed

1.2.1.8. Manual Funds Reduction

Questions:

Q: 1) When you use manual funds reservation, describe the reduction process for the manual commitment.

Explanation: Note: Unlike the commitments for purchase requisitions and purchase orders, the commitment created by the manual funds reservation is not automatically reduced by actual incurrence of costs. Therefore you need to clarify by whom, at which time, and in which form (single or collective processing) the commitment is to be reduced.

A: To be discussed

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1.2.1.9. Manual Cost Allocation

Questions:

Q: 1) Do you want to allocate certain (primary and/or secondary) cost elements manually, without using the usual tools for distribution, assessment, or activity allocation?

A: NA

1.2.2. Product Cost Allocation

Questions:

Q: 1) Note: Contained as a process in the respective Logistics modules (production orders/product cost collectors/sales orders).

A: Product cost collector (Repetitive Manufacturing)

Q: 2) Are you using Product-Cost by Sales Order?

Explanation: If so, actual costs are updated directly to the sales order item. If so, actual costs are updated directly to the sales order item. For comprehensive information on this, see the R/3 Library under Financials -> Controlling -> Product Cost Controlling -> Cost Object Controlling -> Product Cost by Sales Order.

A: NA

1.2.2.1. Simultaneous Costing

Questions:

Q: 1) Comment on simultaneous costing

Explanation: The simultaneous cost estimate consists of actual account assignments to cost objects that result from goods movements for raw materials and semifinished goods, confirmation of internal activities, external bills, and so on. Consequently, you should work closely with colleagues working with Logistics and Financial Accounting when drawing up the concept for simultaneous costing. This is especially relevant for automatic account determination.

A: NA

1.2.3. Profit Center Allocation1.2.3.1. Actual Data Transfers on Profit Center

Questions:

Q: 1) Do you want to transfer plan data to PCA from other applications? From which application(s)?

Explanation: The plan version from which data is transferred in the Profit Center Accounting, must also be defined in Profit Center Accounting.

A: NA114

1.2.3.2. Document Entry in Profit Center Accounting

Questions:

Q: 1) In Profit Center Accounting, do you want to enter other data which is not transferred by the integration of EC-PCA?

A: Yes, some rectification which may occur needs to rectified by the document entry

1.2.3.3. Actual Transfer of Additional Balance Sheet Items to EC-PCA

Questions:

Q: 1) Besides the balance sheet items transferred at period end, (see period end closing Profit Center Accounting) do you wish to transfer other B/S items transaction-based? If yes, which ones?

A: All the balance sheet accounts are required for profit center accounting. BALCO requires Product wise balance sheet and profit & loss account.

1.2.3.4. Manual Entry of Statistical Key Figures

Questions:

Q: 1) In Profit Center Accounting, do you want to enter other statistical key figures which are not transferred by the integration of EC-PCA?

A: NA

1.2.4. Cost and Revenue Allocation to Profitability Analysis

1.2.4.1. Transfer and Valuation of Incoming Sales Orders

Questions:

Q: 1) Do you want to transfer the sales order receipt to profitability analysis? Which period do you want to show the sales order result in?

Explanation: Options: - Period in which the order was entered - Period for the expected delivery / billing plan

A: Sales order data needs to be captured into Profitability analysis based on the period for the expected delivery.

Q: 2) Which sales order values do you want to track in reporting? Examples: Gross revenue, net revenue, or cost-of-sales.

a. C&F Priceb. COGMc. Freight d. Insurancee. Demurrages / Dispatch

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f. Inspection Chargesg. Marketing Feesh. Terminal lingi. Wharf Chargesj. Agency Commissionk. Others

1.2.4.2. Transfer and Valuation of Billing Documents (Direct Sale)

Questions:

Q: 1) To which report rows (value fields) are the true conditions in the billing document to be assigned? In addition, you do want to transfer statistical conditions?

A: Yes

Q: 2) Which values are to be used in valuation in addition to the conditions in SD?

Explanation: Example Sales deductions, such as commission, allowances, shipping costs, warranties, and so on.

1. C&F Price2. COGM3. Freight 4. Insurance5. Demurrages / Dispatch6. Inspection Charges7. Marketing Fees8. Terminal ling9. Wharf Charges10. Agency Commission11. Others

Q: 3) Do you want to update the cost component split for cost of goods manufactured from product costing in profitability analysis by transaction?

Explanation: If you want to reconcile the cost of sales with FI, you need to transfer the VPRS condition to CO-PA also.

A: No

1.2.4.3. Transfer and Valuation of Billing Documents (Third-Party Transaction)

Questions:

Q: 1) Do you perform third-party transactions in the SAP sense? This means that sold products are delivered to customers directly from the supplier; no goods receipt or goods issue is posted in your company.

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Explanation: To execute third party business transactions, you need to post the incoming invoices for the vendor to the customer before the invoices are sent out. In this case, you are urgently required to transfer the VPRS condition from SD.

A: NA

1.2.4.4. Transfer and Valuation of Billing Documents (Inter-company Processing)

Questions:

Q: 1) Do you perform inter-company business in the SAP sense? This means that sold goods are delivered from a plant in a company code that is not the same as the invoicing company code.

A: NA

Q: 2) Do you want to compare the external revenues with the cost of goods manufactured of the company code of production?

A: [ ]Yes [X ]No

1.2.4.5. Transfer and Valuation of Billing Documents (Complaints Processing)

Questions:

Q: 1) How should credit memos, returns, and free deliveries be shown in Profitability Analysis?

Explanation: Example: You need to ensure that the value field for freight is reset for returns.

A: Yes

1.2.4.6. Transfer of Customer Agreements to Profitability Analysis

Questions:

Q: 1) Do you want to transfer customer arrangements to Profitability Analysis as passive budget checks?

A: NA

1.2.4.7. Direct Posting of Costs and Revenues From FI

Questions:

Q: 1) Do all your revenue and sales deduction postings come in from the Sales and Distribution component, or are there additional postings to those categories that originate in the General Ledger?

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A: NA

Q: 2) Which additional expenses and revenues that were not carried in Overhead Cost Controlling nor in Product Cost Controlling do you want to transfer to Profitability Analysis?

Explanation: These can also be expenses/revenues that have previously been posted in CO-PA for accrual purposes only, and which you want to compare with the actual values.

A: BALCO wants the corporate overheads including marketing costs to be transferred to CO-PA. The basis of allocation needs to be finalized.

Q: 3) At which level (characteristics) do you want to post this data to profitability analysis? Which cost elements should be transferred to which value fields?

A: To be defined.

1.2.4.8. Automatic Additional Transfer into Profitability Analysis

Questions:

Q: 1) Do all your revenue and sales deduction postings come in from the Sales and Distribution component, or are there additional postings to those categories that originate in the General Ledger?

A: All sales related deductions are posted to Sales & Distribution Module.

Q: 2) At which level (characteristics) do you want to post this data to profitability analysis? Which cost elements should be transferred to which value fields?

A: To all the characteristics mentioned above.

Q: 3) Create a matrix that contains the primary cost and revenue elements derived from the chart of accounts in the rows, and assign these to the possible account assignment objects (combinations of characteristics in CO-PA).

Explanation: (As information for defining the field selection in FI/MM, and for defining the characteristic groups) defining the characteristic groups) Assign these to the cost elements that are always assigned to this object number (profitability segment). What value fields do you want to post the values for which cost elements to?

A: NA

Q: 4) Decide which automatic postings from FI or MM should be transferred into Profitability Analysis automatically.

Explanation: Examples: Expenses and revenue from the revaluation or transfer of stock between plants.

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A: Interest Income??

1.3. Period-End Closing (Controlling)1.3.1. Period-End Closing in Overhead Cost Controlling

1.3.1.1. Actual Periodic Reposting

Questions:

Q: 1) Do you periodically move costs from a project/cost center (such as telephone costs) to other projects/cost centers?

A: Yes


A: Statistical key figures – To de defined

1.3.1.2. Accrual Calculation in Cost Center Accounting (Target = Actual Method)

Questions:



A: To be discussed

1.3.1.3. Accrual Calculation in Cost Center Accounting (Percentage Method)

Questions:



A:

1.3.1.4. Actual Cost Distribution

Questions:

119

Q: 1) Do you want to distribute costs from a cost center or a cost center group to CO objects (cost center, orders, WBS element), and keep the original cost element from the sender in the receiver object?

A: To be discussed


A: Statistical key figures

1.3.1.5. Entry of Sender Activities

Questions:

Q: 1) When you use indirect activity allocation (manual entry), are you able to measure and post the activities on the sender cost center that are to be allocated?

A: [ ]Yes [ ]No

1.3.1.6. Actual Indirect Activity Allocation (Manual Entry)

Questions:

Q: 1) Application example:

Explanation: The "Quality control" cost center provides 1,000 hours of the "Checking" activity type. It provides activity to the "Goods receipt" and "Finished product" cost centers. The allocation is made using the allocation base "Number of checked items" (PP). On the "Goods receipt" cost center, there are 4,000 of these items, and on the "Finished product" cost center, there are 6,000. This corresponds to an activity input of 400 hours by the "Goods receipt" cost center, and 600 hours by the "Finished product" cost center. The price for each activity unit on the "Quality control" cost center" is 50 USD/h. This activity output creates costs of 50,000 USD on the "Quality control" cost center. The receiver cost centers are debited according to their allocation base "Checked items" with the following costs: Goods receipt: (50,000 USD x 4,000 PP) / 10,000 PP = 20,000 USD Finished products: (50.000 USD x 6,000 PP) / 10,000 PP = 30,000 USD

A: NA

1.3.1.7. Actual Indirect Activity Allocation (Indirect Entry)

Questions:

Q: 1) Example:

Explanation: In the application example, the activity is determined using weighting factors on the sender, with tracing factors from the receiver. You need to define these tracing factors for the sender. The sender rule in this case is for quantities determined invertedly. You can use any receiver rule. The receiver tracing factors are as follows: "Goods receipt": 4,000 items for checking. "Finished

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products": 6,000 items for checking. 0,4 hours are required by the "Quality control" cost center for checking. To do this, a weighting factor of 0,4 is defined on the sender for the "Check" activity type. This results in 1,600 hours activity input for the "Goods receipt" cost center, and 2,400 hours for the "Finished products" cost center. The "Check" activity is valuated at 5 USD/h. This means that the sender is credited with 20,000 USD, the "Goods receipt" cost center is debited with 8,000 USD, and the "Finished products" cost center is debited with 12,000 USD.

A: NA

1.3.1.8. Target=Actual Activity Allocation

Questions:

Q: 1) Do you want to have the system automatically calculate the actual activity input of primary cost centers (receivers) from secondary cost centers (senders) on the basis of the operating level and the planned activity input of the receiver cost center?

Explanation: This also determines the actual quantity of the sender cost center using the target quantity of the receiver. This technique is useful when you can determine a direct proportional relationship between the activity input and the activity output of the primary cost center (such as between energy hours and machine hours).

A: NA

1.3.1.9. Template Allocation (Overhead Cost Order)

Questions:

Q: 1) Do you have process costs that you want to allocate to overhead cost orders?

A: NA

Q: 2) Which factors influence the amount of costs to be allocated?

A: NA

1.3.1.10. Overhead Calculation (Overhead Cost Order)

Questions:


A: NA


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A: NA


A:

1.3.1.11. Settlement of Overhead Orders (Actual Data)

Questions:

Q: 1) Which order types should be settled?

A: NA

Q: 2) To which receivers, at which rates (percentage, amount, or equivalence number) and under which cost elements (original cost element or settlement cost element) should settlement be made?

A: NA

1.3.1.12. Settlement of Accrual Orders

Questions:

Q: 1) Which order types should be settled?

A: To be discussed

Q: 2) To which receivers, at which rates (percentage, amount, or equivalence number) and under which cost elements (original cost element or settlement cost element) should settlement be made?

A: NA

1.3.1.13. Actual Cost Assessment

Questions:

Q: 1) Do you allocation costs from one cost center / group from cost centers to other CO objects (cost centers, orders, WBS elements) by summarizing the original cost elements from the sender cost center(s) into one secondary assessment cost element?

A: Yes, To be discussed


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A: Statistical key figures

1.3.1.14. Overhead Calculation (Business Process)

Questions:

Q: 1) What costs is the cost estimate based on when you compute overhead for internal orders?

A: NA

Q: 2) Specify the overhead rates.

A: NA


A: [ ]Yes [ ]No


A: NA

Q: 5) For each assignment type, do you distribute overhead as a fixed percentage or based on the actual total costs?

A: NA

Q: 6) Describe in detail how each of these assignments is performed today in your organization.

A: NA


A: NA

Q: 8) Describe in detail how each of these allocations is performed today in your organization.

A: NA

Q: 9) Do you assign overhead expenses to projects?

A: NA

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Q: 10) For each allocation category, do you distribute overhead as a fixed percentage or based on the actual total costs?

A: NA

Q: 11) If you use fixed percentages for assignments, how do you handle remaining variances?

A: NA

Q: 12) For each of these assignments, what causes the overhead (for example, direct labor expense, labor hours, total WBS expense, others)?

A: NA


A: NA


A: NA


A: [ ]Yes [ ]No


A: NA


A: NA

Q: 18) Do you want to add a percentage for overhead to the production cost collector?

A: NA


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A: NA

Q: 20) Do you perform automatic overhead allocation for specific types of costs/expenses?

A: NA


A: NA



A: NA


A: NA


A: NA

Q: 25) Are there any overhead expenses that are not calculated with reference to the production order but are to be assigned directly to the sales order?

Explanation: Example: Overhead costs for sales and administration.

A: NA

Q: 26) How often do you calculate your planned overhead?

Explanation: The Schedule Manager is well suited to performing periodic allocations. The program selects project objects, permits error correction, and continues the process.

A: NA

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Q: 27) Who is responsible for reconciling the run? (This person will be responsible for running/monitoring planned overhead.)

A: NA

Q: 28) Do you calculate overhead for all objects at once or individually for each object. (Detailed calculation can affect system performance.)

A: NA

Q: 29) Do you have a specific plan version when you calculate overhead?

A: NA

Q: 30) Is overhead calculated for your projects?

A: NA

Q: 31) Is the planned overhead the same as the actual overhead?

A: NA

Q: 32) Describe how you calculate overhead for (1) direct costs (2) indirect costs (3) fixed costs (4) variable costs).

A: NA

Q: 33) Do you include sales and marketing and general and administrative costs in your overhead calculation?

A: NA

Q: 34) Do you reconcile planned and actual overhead?

A: NA

Q: 35) Do you process actual overhead on a project by project basis or overall?

A: NA

Q: 36) Do you have project-type-specific overhead calculations?

A: NA

Q: 37) Do you have different overhead costs for each business unit?

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A: NA

Q: 38) Do you calculate overhead on materials/labor?

A: NA

Q: 39) At what level of detail do you plan for overhead?

A: NA

Q: 40) Do you calculate percentage overhead?

A: NA

Q: 41) Is the calculation dependent on time periods?

A: NA

Q: 42) What is the basis for the overhead costs?

A: NA

Q: 43) Is the basis for overhead planned costs the same as the basis for actual overhead costs?

A: NA

Q: 44) What is the formula/schema for applying overhead costs?

A: NA

Q: 45) How often do you calculate overhead costs?

A: NA

Q: 46) To which accounts/cost elements are the overhead costs posted?

A: NA

Q: 47) Does the basis for the overhead costs change during the lifecycle of the project?

A:

Q: 48) Who is responsible for overhead costs? (This person is responsible for running the overhead calculation.)

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A: NA

Q: 49) Do you evaluate interest charges throughout the project hierarchy?

A: NA

1.3.1.15. Variance Calculation for Overhead

Questions:

Q: 1) Do you want to display cost center variances by variance category?

A: NA

Q: 2) Do you want to allocate cost center variances subsequently to other cost centers/cost objects (using subsequent valuation with actual prices) or post them to Profitability Analysis?

A: NA

1.3.1.16. Pre-distribution of Fixed Costs

Questions:

Q: 1) Do you want to pre-distribute fixed costs independent of the receiving cost centers actual usage of resources?

Explanation: Do you want to debit a receiver cost center with the fixed cost of the sender according to the plan?

A: NA

1.3.1.17. Splitting

Questions:

Q: 1) Comment on splitting

Explanation: Normally, cost elements in Cost Center Accounting are not assigned to activity types for actual postings. Be sure to split the costs posted independent of activities to the individual activity types before you calculate the actual price.

A: List of cost elements to be linked to the Activities for cost splitting1. Catalyst2. Staff costs3. Maintenance / Operating Supplies4. Depreciation5. Administrative Overheads6. Finance Charges

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A: Based on the Activity Quantity (i.e., Production Quantity)

1.3.1.18. Actual Price Calculation

Questions:

Q: 1) Do you want to calculate actual prices for Cost Center Accounting and / or Activity-Based Costing on an automatic or iterative basis?

A: Automatic Calculation based on the Actual costs of the cost elements in the cost center

Q: 2) Do you want to represent actual prices as periodic, average, or aggregated prices?

A: Periodic

Q: 3) Do you want to set actual prices manually?

A: Yes, to be discussed

1.3.1.19. Revaluation at Actual Prices

Questions:

Q: 1) How do you want to organize subsequent valuation? (see documentation)

Explanation: You can valuate subsequently using actual prices without changing the original allocations made using planned prices. Instead, the system posts the difference to the allocation made using the planned price with a separate business transaction. with a separate business transaction. When you valuate subsequently using the original business transaction, the system changes the original allocation so that you can no longer distinguish the difference between the two valuations. Distinguish the difference between the two valuations. In subsequent valuation using actual prices, you want to reallocate cost center variances to other cost centers or cost objects. The other strategy would be to post the variances to Profitability Analysis.

A: Yes, separate business transaction

1.3.1.20. Reconciliation Financial Accounting/Controlling

Questions:

Q: 1) Do you intend to allocate costs from one cost center/order of a company code to another cost center/order of another company code and represent this as an intercompany transaction in FI?

A: NA

1.3.1.21. Business Process Analysis

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Questions:

Q: 1) Provide the consultant with your most critical business process reports.

A: To be discussed

1.3.1.22. Cost Center Analysis

Questions:

Q: 1) Provide the consultant with your most critical cost center reports.

A: To be discussed

1.3.1.23. Analysis of Overhead Orders

Questions:

Q: 1) Describe the critical factors for order analysis, such as plan/budget vs. actual analysis, order group analysis, or detailed line item analysis.

A: NA

1.3.2. Period-End Closing: Periodic Product Cost Controlling

1.3.2.1. Template Allocation (Cost Object)

Questions:

Q: 1) Do you have process costs that you want to allocate to a cost object?

A: [ ]Yes [ ]No


A: NA

1.3.2.2. Revaluation at Actual Prices

Questions:

Q: 1) How do you want to organize subsequent valuation? (see documentation)

Explanation: You can valuate subsequently using actual prices without changing the original allocations made using planned prices. Instead, the system posts the difference to the allocation made using the planned price with a separate business transaction. with a separate business transaction. When you valuate subsequently using the original business transaction, the system changes the original allocation so that you can no longer distinguish the difference between the two valuations. Distinguish the difference between the two valuations. In subsequent valuation using actual prices, you want to reallocate cost center variances to other cost centers or cost objects. The other strategy would be to post the variances to Profitability Analysis.

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A: YES

1.3.2.3. Actual Cost Distribution - Product Costs

Questions:

Q: 1) Do you want to use the calculated target costs on the orders for the distribution within the cost object hierarchy to the product cost collector?

Explanation: Note: Required if you want to create a periodic unit price or periodic allocation price, and if the total costs are to be displayed on the orders.

A: NA

1.3.2.4. Overhead Calculation (Cost Object)

Questions:


A: NA


A: NA

1.3.2.5. Template Allocation (Product Cost Collector)

Questions:

Q: 1) Do you have process costs that you want to allocate to a product cost collector?

A: NA


A: NA

1.3.2.6. Overhead Calculation (Product Cost Collector)

Questions:


A: NA


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A: NA


A: NA

1.3.2.7. WIP Calculation Based on Target Costs

Questions:

Q: 1) Note: WIP for target costs is determined by valuating the actual postings with the target costs of the product costing.

A: NA

Q: 2) Describe the level of detail and the cost breakdown that you want for your WIP. Define the WIP components that do not require activation (no transfer to FI)

A: NA

1.3.2.8. Periodic Variance Calculation

Questions:

Q: 1) Which production variance categories do you want to calculate in Cost Object Controlling, and which of these should be transferred to CO-PA (operating profit) in consultation with Profitability Analysis?

A: SAP defined variances are sufficient for the processes

Q: 2) Do you want to valuate the scrap? If so, specify how.

A: NA

Q: 3) Do you want to report scrap separately within the production variances?

A: NA

1.3.2.9. Settlement of Cost Object Hierarchy

Questions:

Q: 1) Define a settlement rule for the cost object in the cost object hierarchy.

Explanation: Note: If there is no distribution of actual cost for the cost object hierarchy, then this needs to be maintained.

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A: NA

1.3.2.10. Settlement of Product Cost Collector

Questions:

Q: 1) Do you want to see your production variances in Profitability Analysis?

Explanation: Define the value fields for profitability analysis (for materials where the material price control indicator is set to S) for transferring the variances.

A: Yes, the variances needs to be transferred to the Profitability analysis

Q: 2) Note on transferring the price differences to FI or updating the factory activity to production orders:

Explanation: To debit the cost object, define a cost element (category 22), which is assigned to the GBB-AUA business transaction in MM Account determination.

A: NA

1.3.2.11. Data Collection for Product Drilldown

Questions:

Q: 1) How do you want to summarize product costs?

Explanation: Product drilldown provides you with a fixed hierarchy that displays the product costs per plant, product group, product group, cost element, and if necessary, the period. If you want to summarize your product costs using other criteria, such as, sold-to-party, profit center, business area, then you need to use order summarization. This enables you to create hierarchies that include all of the fields in the order master record. If you require more summmarization criteria, you can use classification to define criteria for summarization as needed.

A: Yes

Q: 2) How do you want to group your materials for the summarized analysis?

A: NA

Q: 3) Is this grouping and its requirements regarding product groups and material groups identical in Logistics?

A: To be discussed with MM during Integration

1.3.2.12. Product Cost Analysis in Product Cost by Period

Questions:

Q: 1) Define your reporting requirements in Cost Object Controlling, and compare them to the SAP standard reports. Do you require customer-specific cost object reports?

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A: YES

1.3.3. Period-End Closing for Profit Center Accounting1.3.3.1. Profit Center Distribution: Actual

Questions:

Q: 1) Do you need to distribute revenues, gains and balance sheet accounts from the profit centers to other profit centers for the end of period, and simultaneously pass on the sender cost center or the balance sheet account to the receiver profit center?

A: NA

Q: 2) What is the basis for allocating these values?

A: NA

1.3.3.2. Actual Profit Center Assessment

Questions:

Q: 1) For period-end closing, do you need to assess revenues, costs, and balance sheet accounts from the profit centers to other profit centers, and transfer the sender cost element or balance sheet account to the profit center receiver?

A: NA

Q: 2) What is the basis for allocating these values?

A: NA

1.3.3.3. Profit Center Analysis

Questions:

Q: 1) Define your report requirements within the context of Profit Center Planning and compare this with the SAP standard reports. Do you require customer-specific Profit Center Reports?

A: To be discussed

1.3.4. Period-End Closing for Profitability Analysis1.3.4.1. Settlement of Sales Orders

Questions:

Q: 1) If you enterprise has make-to-order production with sales order controlling, but you do not use results analysis, assign the cost elements that were posted on sales orders to the relevant value fields in the profitability analysis.

A: NA

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Q: 2) If you are using results analysis, how detailed should the information on cost-of-sales and revenues be in profitability analysis?

A: NA

1.3.4.2. Settlement of Production Variances

Questions:

Q: 1) Do you want to transfer production variances to profitability analysis?

A: YES

Q: 2) In which value fields is each variance category to be updated?

A: Standard SAP defined variance categories

1.3.4.3. Settlement of Internal Orders (Actual Data)

Questions:

Q: 1) Do you want to settle costs and/or revenues from internal orders directly to profitability analysis?

A: To be discussed

Q: 2) Assign the appropriate value fields (report rows) of Profitability Analysis to the costs and revenues posted to the projects.

A: NA

1.3.4.4. Project Settlement

Questions:

Q: 1) Do you want to settle costs and/or revenues from projects (such as customer projects) directly to profitability analysis?

A: NA

Q: 2) Assign the appropriate value fields (report rows) of Profitability Analysis to the costs and revenues posted to the internal orders.

A: NA

1.3.4.5. Actual Allocation of Process Costs to Profitability Analysis

Questions:

Q: 1) Do you want to transfer the posted process costs to profitability analysis?

A: NA

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Q: 2) Which level do you want to assign these costs (using the step-by-step principles of analysis of fixed-cost allocation)? (for example, company code, country, enterprise area, sales organization)

A: NA

Q: 3) Which allocation methods do you require for transferring the planned process costs to profitability analysis?

Explanation: Options: - Assessment - Indirect activity allocation - Allocation using process template

A: NA

1.3.4.6. Actual Allocation of Cost Center Costs to Profitability Analysis

Questions:

Q: 1) Do you want to transfer the posted cost center costs to profitability analysis?

A: To transfer corporate overheads cost centers including marketing costs to Profitability analysis

Q: 2) Which level do you want to assign these costs (using the step-by-step principles of analysis of fixed-cost allocation)? (for example, company code, country, enterprise area, sales organization)

A: NA

Q: 3) Which allocation methods are to be used for transferring the posted cost center costs to profitability analysis?

Explanation: Options: - Assessment - Indirect activity allocation - Indirect activity allocation

A: NA

1.3.4.7. Actual Top-Down Distribution

Questions:

Q: 1) Do you want to assign posted actual costs for period-end closing to a more detailed level than when the original posting was made? (For example, distribution of automatic postings from the company code level to enterprise areas)

A: NA

Q: 2) Which values (revenues, etc.) do you want to distribute?

A: NA

1.3.4.8. Analysis of Results and Contribution Margins

Questions:

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Q: 1) Determine the structure of the contribution margin scheme you want to report on in CO-PA.

A: Yes

Q: 2) What are the calculated ratios?

A: Yes

Q: 3) Which characteristic groups do you need for navigating in a report?

Explanation: You should define summarization levels for these groups if data volumes are large.

A: NA

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