SAP Controlling (SAP CO)

The purpose of the Controlling (CO) module in SAP is to provide organizations with a

method of slicing and dicing data to view costs from an internal management

perspective and provide a view of profitability beyond that of basic financial

reporting. This allows the organization to create information in a manner that is

tailored to their specific business measurements needs. Controlling allows an

organization to:

Plan and track overhead costs within the company's specific organizational

structure.

Track costs related to specific projects or events and either capitalize those

costs or charge them to appropriate departments upon completion.

Perform "Activity Based Costing".

Perform Product Costing, measuring production cost and variances.

Report profitability by product line, division, or other internal measurement.

Report sales and gross profitability by external measures such as market

segments or customer groups.

Controlling consists of all master data, configuration, and reporting required to

analyze both spend and revenues, both within and across organizations. This

includes the following master data:

Cost Elements - cost and/or revenue accounts

Cost Centers - departmental units

Profit Centers - business lines, product lines or divisions

Internal Orders - projects or events

Functional Area - Cost of Sales Accounting

Statistical Key Figures - non financial statistics for allocating or measuring

financial costs

Activity Types - Labor or other activity costs

Costing sheet

Source: http://sap-controlling.blogspot.com/

Use of costing sheet:

In the costing sheet, you determine the following:

The direct costs to which overhead is applied (calculation base)

The conditions under which overhead is applied (dependency)

Whether overhead is calculated on a percentage basis or on a quantity basis

The amount of the overhead percentage, or the amount of overhead for each

unit of measure

The validity period for the overhead

Which object (cost center or order) is credited, and under which cost element

for actual postings (credit key)

Overhead cost elements:

IMG Controlling Product Cost Controlling Product Cost Planning Basic

Settings for Material Costing Overhead Maintain Overhead Cost Elements

Overhead cost elements used to define overhead to products.

Calculation Base:

IMG Controlling Product Cost Controlling Product Cost Planning Basic

Settings for Material Costing Overhead Costing Sheet: Components Define

Calculation Bases

The calculation base determines to which cost elements overhead is applied

together.

We will define 2 bases on which overheads will be calculated:-

1) Materials

2) Wages

Product Costing fastfacts

Define calculation base

Define percentage overhead rates

Define costing sheets

Define overhead keys

Define cost component structure:

Define structure

Define cost component

Assign cost elements to cost components

Product costing is a tool for planning costs and establishing prices for materials. It

is used to calculate the costs of goods manufactured and the costs of goods sold for

each product unit.

If costing is carried out on the basis of data in Production Planning (PP), then the

cost estimate is a product cost estimate with a quantity structure (for example,

BOM and routing). If costing is carried out on the basis of data that you enter

manually, then the cost estimate is a product cost estimate without a quantity

structure.

Product costing belongs to both the Production Planning (PP) Module and the

Controlling (CO) Module.

Cost Object Controlling is used in the following areas:

Order Related Production.

Repetitive Manufacturing.

Process Manufacturing.

Sales Order Related Production.

Engineer to Order.

Controlling area OX06

Controlling area is an organizational unit within a company that represents

company for cost accounting purpose.

Controlling area can have more then one company code assigned to it, but one

company code can have one and only one controlling area. All company codes under

same credit control are must have same operative charts of accounts.

IMG --> Controlling --> G/L--> organization --> Maintain controlling area OX06

Use CoCd --> CO area if your company code is same as the controlling area and you

have just one company code in the controlling area otherwise use second option.

Cost element group KAH1

Accounting Controlling Cost Element Accounting (or Cost Center Accounting)

Master data Cost element groups Create/Change/Display.

Cost element group used for collecting similar characteristics in same groups.

Cost element group structure used for row structure for reporting purpose.

Characteristics & Values in SAP COPA

Cost elements: Primary & Secondary

Cost center is a cost element classifies the organization's valuated consumption of

production factors within a controlling area.

Cost center is an organizational unit within a controlling area that represents a

defined location of cost incurred. It can be defined based on various criteria such as

functional requirements, allocation criteria,physical location etc.

Primary Element -

Primary costs that originate outside the company; relate directly to the income

statement in FI and must be

included in the FI Chart of Accounts.

All Primary cost elements gets linked to Income statement.

Secondary Element -

Secondary costs that result from internal allocation activities; NO relation to G/L

accounts in FI. These

accounts are exclusively for cost accounting and are only maintained in CO.

Business process associated with the SAP CO module:

Subcomponents of the SAP Controlling (SAP CO) Module:

CO-OM - Overhead Management

- CO-OM-CCA - Cost Center Accounting

- CO-OM-OPA - Internal Order Accounting

- CO-OM-CEL - Cost Element Accounting

- CO-OM-ABC - Activity Based Costing

CO-PCA - Profit Center Accounting

CO-PA - Profitability Analysis

CO-PC - Product Costing