co over view and cca processes

8/4/2019 CO Over View and CCA processes

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Controlling Module

Overview


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CCA - Cost Center Accounting

PC- Product Costing

OPA - Order Project Accounting

PA - Profitability Analysis

ABC- Activity Based CostingEC-PCA - Enterprise Controlling -

Profit center Accounting

EC-EIS - Enterprise Controlling -Executive Information system

SAP R/3 CO sub-modules

COCOEC-EC-

EISEISCO-CO-

OPAOPA

CO-CO-

CCACCACO-CO-

ABCABC

EC-EC-

PCAPCA

CO-CO-

PCPC

CO-CO-

PAPA


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Application-

independent

unit: Top

level

Physical

structure

Application-

independent

unit: Top

level

Physical

structure

Smallest Unit

in CO to

Capture the

Cost

Smallest Unit

in CO to

Capture the

Cost

This is

orgn.

controlling

unit.

This is

orgn.

controlling

unit.

Top level

logical unit

in SAP.

It is

superset

of all CC

, BA, CA etc.

Top level

logical unit

in SAP.

It is

superset

of all CC

, BA, CA etc.

Legal unit

for which

we need

to publish

annual

accounts

Legal unit

for which

we need

to publish

annual

accounts

Line of

Business:

e.g. Petro

& Polymer

Can take BS

& P&L

Not used

Line of

Business:

e.g. Petro

& Polymer

Can take BS

& P&L

Not used

FIFI COCOFinancial accountingFinancial accounting ControllingControlling

Client CompanyCompany BusinessBusiness ControllingControlling OperatingOperating CostCostcodecode areaarea areaarea concernconcern centercenter

Organizational Units in the SAP System


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Assignment of Company Code and Controllingarea


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CO System Objectives

Effective Overhead CostManagement

through

Detailed Planning ofOverhead Costs

Tracing actual costs to theirorigin - tight integration

Comprehensive analysis ofperformance (Plan vs Actual)

Support for budgetorycontrol

Support for Strategic CostManagement

through

Accurate product costinformation

Instant Profitability analysis ofbusiness segments (CO-PA)

Performance monitoring bysetting product cost standardsand measurement of actuals

Cost Estimation for new productsand orders


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Cost

Center

PA

Account AssignmentObjects

(Cost Objects)

Profitability

Segment

Internal

Order

CCA

OPA

(i.e. Cost Objects)

Production

Order/SalesOrder

PCBusiness

Process

ABC


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Cost Center Accounting - What does it do?

Cost Center Planning

Cost Allocation

Planned Activity Price

Actual Cost Booking

FI / TR

MM

PP

SD

Expense Variance Analysis / Activity

Prices

CO-PC


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Profit Center Accounting

Cost

Center GL Account

Equity Share

CapitalBank

Unrealized

Forex

Gain / Loss

Loans

Balance Sheet items

Cost

Sales

Order

Other

Income

Income

Profit Center

Profitability

ROCE

Ratios

AccessibilityControlAssets

Production

Cost Center


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Product Cost flow

Production /

ProcessOrder

Profitability

segments

Pro

duc

ts

Market

segments

Regio

ns

Sales

Order

Cost

Allocation

Input

Material

StockMaterial Issues

Co.

Area

Mfg.

Services

Mfg.

Opera-

tions

Business

Support

at Mfg.

Location

Mktg,

Sales

&

Distn

Business

Support

at HO

WIP

FG

Stock

Settlement

Revenues&

costs

of

sale

Assessment

Cost Allocation


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Profitability Analysis - An External View

10

Company Market

Billing DocumentSD

Profitability AnalysisCO-PA

Key Sales Figures:Revenues, Cost of Sales...

Market Segments:Customer, Product,

Product Group,Distribution Channel

CO-CO-

PAPA

SDSD

The goal of CO-PA is to determine the profitability of market segments:


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Integration with other Modules

11

Overhead Cost Controlling

Product CostControlling

Cost Center Acc.

OverheadOrder

Accounting

CostObject

CO

Profitabilitysegments

ActivityBased

Costing

ProfitabilityAnalysis

FI AA

FI MM PP

HR

HR

FI SD

SD

SD

MM

PP

PP

ProfitCenterAcc.

ProfitCenter

PrCtrPrCtr 1 1

PrCtrPrCtr 3 3

PrCtr 2

PrCtrPrCtr 4 4

PrCtrPrCtr 5 5

Cost&

RevenueElementAccounting


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What is Master Data in CCA

Cost element: Similar to a/c head in FI. Bank charges is

a cost element.

Cost Centers: POY-CP is a cost center.

Standard Hierarchy:Tree structure containing all thecost centers in a controlling area from the Controlling (CO)standpoint.

Statistical Key Figures: Its a basis of allocation. E.g.

NO of employees is the basis of allocation for Personnelcost.


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The Standard Hierarchy

13


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What is Master Data in CCA

Activity type: This is a unit of measuring the activity levelin Production or utility cost center, e.g. Spinning hours isan activity type. This is measured in terms of how manyhours the resources related to Spinning activity type run to

produce any product.


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Cost Center Cost Object

Activity Type

Activity types define functions or services performed by a cost center, and are used

to allocate that cost centers costs to other cost objects.

Not all cost centers have activities (outputs).

Activity types are frequently used in the allocation of overhead to production.

Allocation

Activity Types

15


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Planning Goals

Planning structures forthe companys future

Controlling businesstransactions

Monitor efficiency

Base for valuation of

companys activities

16


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Sales Forecast(Sales volumes or amounts)

(SD)

ProductionPlanning

(PP) PlannedActivities(Routing)

PP/PCA

Planned Capacity

(PP)Are we physically able toproduce?

MRPMaterials RequirementPlanning

(MM/PP)

Overhead/CostCenter

Planning

(CO-CCA))

Planned

ProductCost

(PC)

Profit Plan

(EC orPA)

Integrated Planning Cycle

17


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CCA PLANNING

Step 1:Cost element planning (cost center budget)

Step 2:

Activity planning (similar planning the cost center wisemachine hours)

Step 3:SKF planning (planning the basis of allocation on every

cost center)


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PLAN ACTIVITY PRICE CALCULATION

ACTIVITY PRICE: Definition:Activity Price is the per hour rate of the

activity being produced at the production / utility costcenter. For example the power unit rate

How do we arrive at this:

Take the input:Cost center budget

Allocate the Business support & manufacturing support cost

Take the plan activity output.


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COST ALLOCATION

Distribution: Cost distribution on the basis of pre-decided ratios. Forexample we shall distribute the Process common costs to process costcenters.

Assessment: Cost allocation on the basis of pre-decided ratios. Forexample we shall assess the accounts department cost to process

common cost centersActivity Allocation: Allocating the activity quantities to various

receivers. For example allocating the Power Units from Power costcenters to production cost centers.

Surcharge: In case the cost is rather insignificant, and the activity

definition and monitoring is not worth the effort, we may applysurcharge (i.e. fix percentage of production costs).


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Allocations: Cycles and Segments

Cycle

Segment

Segment

11

Segm

ent

Segm

ent

22

Segment

Segment

33

Sender Receiver

Cycle

Cost Center: Admin BuildingsCost Center: Admin Buildings

Allocation: 100% actual costsAllocation: 100% actual costs

Cost Center: EnergyCost Center: Energy


Cost Center: EnergyCost Center: Energy


Administration Cost CentersAdministration Cost Centers

Tracing factor: mTracing factor: m 22 floor spacefloor space

Administration Cost CentersAdministration Cost Centers

Tracing factor: mTracing factor: m 22 heated spaceheated space

Production Cost CentersProduction Cost CentersTracing factor:Tracing factor: Gas consumptionGas consumption

per meter readingper meter reading

21


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PERIOD END PROCESSING IN CO

ONLINE FLOW OF ENTRIES IN CO FROM VARIOUSOTHER MODULES

REPOSTING OF COST

REPOSTING OF LINE ITEMSACTIVITY ALLOCATION

ACTUAL ALLOCATION CYCLES

ACTUAL ACTIVITY PRICE CALCULATION

CCA REPORTS


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CCA REPORTS

PLAN V/S ACTUAL CC COMPARISON

CC PLAN/ACTUAL LINE ITEMS

YEARLY PLAN / ACTUAL ACTIVITY RATES

UTILITY FIXED / VARIABLE COST REPORTSMONTHLY UTILITY QTY REPORTS

CC YEARLY / QUARTERLY COMPARISON REPORT

TARGET /ACTUAL COMPARISON REPORT

DISPLAY CC/CE/ACTIVITY TYPE


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Information System: Overview

25


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The Report Tree

User Settings

Planning Reports

Reports for

Variance Analysis

Comparison Reports

Other Report Groups

26


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Cost Centers: Actual / Plan / VarianceArea: Cost CentersArea: Statistical Key FiguresCost Center: VariancesPlanning overview

Cost elements /Cost centers

4110 4130Service cost centers

4210Shop floor area . . .

Actual

30,00070,000

100,000

Plan abs.

35,00060,00095,000

Plan var.

5,00010,000

5,000

Standard Reports

27


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Interactive Information System

400000 Material consum.Cost Elements Actual Cost Plan Cost Var.(abs.) Var.(%)

100,000.- 100,000.-

Line items 400000 100,000.- USD

FI DocumentFI Document 40

50

400000 Material consum.

113100 Bank

100,000.-

100,000.-

28


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Extract Management

CurrentExtract Archive

R/3R/3

Database

Database

Datasource

Report

Extract

Administration

29


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Overview


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EC-Profit Center Accounting

Profit Center Accounting: OverviewProfit Center Accounting: OverviewMaster DataMaster Data

Profit Center PlanningProfit Center Planning

Actual PostingsActual Postings

Information SystemInformation System


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ObjectivesObjectives

Enable Division wise Accounting requirementsEnable Division wise Accounting requirements

ROCE of each Reliance plantROCE of each Reliance plant

Profitability Analysis of functional areasProfitability Analysis of functional areas

Analysis of Key Accounting RatiosAnalysis of Key Accounting Ratios

Profitability Reports & Performance AnalysisProfitability Reports & Performance Analysis

EC-PCA-Master Data


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EC-PCA-Master Data

Creating, Changing and Displaying a Profit CenterCreating, Changing and Displaying a Profit CenterStandard HierarchyStandard Hierarchy

Profit Center GroupsProfit Center Groups



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Codification Strategy of Profit CentersCodification Strategy of Profit Centers

5 digits code5 digits code

Intelligence built up in codingIntelligence built up in coding

First 2 digits for Product GroupFirst 2 digits for Product Group

Second 2 digits for LocationSecond 2 digits for Location

Last digit for PlantLast digit for Plant

EC-PCA-Maintaining Accounts


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EC PCA Maintaining Accounts

Revenue and Cost ElementsRevenue and Cost ElementsAccount GroupsAccount Groups


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EC-PCA-Assignments to Profit Centers - 1

MaterialsMaterialsCost CentersCost Centers

Internal OrdersInternal Orders

Production OrdersProduction Orders

EC-PCA-Assignments to Profit Centers - 2


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EC PCA Assignments to Profit Centers 2

Maintenance OrdersMaintenance OrdersProjects / WBSProjects / WBS

AssetsAssets

Sales OrdersSales Orders

Assignment Monitor (1KE4)Assignment Monitor (1KE4)

EC-PCA-Data Transfer Other Modules


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EC PCA Data Transfer Other Modules

From Financial AccountingFrom Financial AccountingFrom Sales and DistributionFrom Sales and Distribution

From Materials ManagementFrom Materials Management

Goods Movements Between Profit CentersGoods Movements Between Profit Centers

Transfer from ControllingTransfer from Controlling

Transfer from Investment Management /AssetTransfer from Investment Management /Asset

ManagementManagement

EC-PCA-Data Transfer Within PCA


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C C a a a s e C

Subsequent Analysis and Posting of Actual DataSubsequent Analysis and Posting of Actual DataPrerequisites for Transferring Actual Data

Creating Profit Center DocumentsCreating Profit Center Documents

Transferring/Creating Statistical Key FiguresTransferring/Creating Statistical Key Figures

EC-PCA-Periodic Activities


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Balance Sheet Items in Profit Center AccountingBalance Sheet Items in Profit Center Accounting

Carrying Balances ForwardCarrying Balances Forward

Assessment and DistributionAssessment and Distribution

Information System


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y

Executing reportsExecuting reports

OverviewOverview

Report Tree and Report ListReport Tree and Report List

Displaying line item reports


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p y g p

Actual Line Item ReportActual Line Item ReportPlan Line Item ReportPlan Line Item Report

Summary records and the master data indexSummary records and the master data index

Displaying Summary RecordsDisplaying Summary Records


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Open for Discussion