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Controlling – Basic Settings

Basic settings

1. Maintain Controlling Area OKKP

The CO area may be maintained at Enterprise Structure Level or at CO level.
Controlling area is an organizational unit within a company, used to represent a closed system for
cost accounting purposes. A controlling area may include single or multiple company codes that
may use different currencies. These company codes must use the same operative chart of accounts.
A CO Area is assigned to a Company Code. Once assigned it cannot be removed. All internal
allocations refer exclusively to objects in the same controlling area.

Controlling area Currency: The Currency in which cost accounting is performed. The controlling area
currency appears as a default in the cost accounting objects (such as cost centers) but can be
overwritten at any time if required

Organizational units in the Controlling (CO) application component:

Controlling area Cost element Revenue element

Profit center Investment center Cost center
Activity type Order Project
Business transaction Work-breakdown structure element (WBS element)
Cost object Business process Operating concern
Profitability segment Object class

Path: SPRO - CO - GENERAL CONTROLLING - ORGANISATION - MAINTAIN CONTROLLING AREA

Will get a screen – Select - Maintain Controlling area - double click – New Entries

Give details CO area / Name / Person responsible / CoCd = Co Area / Currency type 10 / it will give
automatically other info about the company code SAVE

 Activation of sub modules of Controlling OKKP ( IN THE SAME SCREEN )

In this activity we activate the sub modules of CO, which are required.
Go to New Entries give Co Area / Fiscal year / Activate components Cost center and Order
management and check AA activity. SAVE

 Assignment of CC to CO Area (Same Screen)

Go to new entries and assign Company Code SAVE

2. Maintain Versions OKEO

Version is a collection of fiscal-year-dependent indicators for plan and actual data for one controlling area. These
indicators include:
 Lock version
 Integrated planning/line item update
 Copying allowed
 Exchange rate type
 Value date
 Integration of order plans with Cost Center Accounting
 Purely iterative activity price
 Methods for calculating planned activity prices
 Methods for calculating actual activity prices
 Revaluation indicator (for revaluating actual activities with an actual activity price)
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 Cost component structure for cost component split

 Valuation variant for CO resource planning
Versions enable you to carry parallel sets of planning data for the same object, such as optimistic
plan data and pessimistic plan data.

Path: SPRO - CO - GENERAL CONTROLLING - ORGANISATION - MAINTAIN Versions

Select 0 Plan/actual Version - go to settings by fiscal year by page up and down -

Select view of settings by fiscal year - asks for Co Area. Will get a screen where you can lock
version it will be from fiscal year to 2003 - 2007 SAVE

Cost Element Accounting and Cost Center Accounting

Cost Element Accounting is a component of Controlling (CO) which collects and summarizes
postings that arise within CO in a reconciliation ledger.
Cross-company and cross-business-area postings are passed on to Financial Accounting. It is also
possible to create cost analyses in the CO applications.
A cost element classifies the organization's valuated consumption of production factors within a
controlling area.
A cost element corresponds to a cost-relevant item in the chart of accounts.

Cost Center is an organizational unit within a controlling area that represents a defined location of
cost incurrence. The definition can be based on:

 Functional requirements
 Allocation criteria
 Physical location
 Responsibility for costs

1. Creation of Cost Elements

Spro - Co - CEA - Master Data - Cost Element - Create Element (as we have created the FI GL
accounts we need to create at FS00 level)

a. Automatic Creation of Primary and Secondary Cost Elements OKB3: In this activity
we can create cost elements automatically. Give the GL account number and give the cost element
category like primary or secondary and can be completed by creating batch input session and
execute. However, Cost Element Category 11, (Revenues) and 12 (Sales Deductions) cannot be
created by this process.

a. Create Batch Input Session SM35

CO Area :Valid From Session Name Batch Input User.
Go to Program – Execute in Background – Immediate – Save (Down)
Message: Background Job was scheduled.
Go to Sysem – Services – Jobs – Job Overview – Execute. Select job
c. Execute Batch input Session SM35
Can execute from Same Screen or through SM35. Select Job – Process Display errors only – Process
(Below)
M: Batch Input Process Completed.

2.Creation of Cost Element at FI level

Create Cost element to any expenditure account by selecting expenditure account like 400100. Go
to environment and edit cost element give validity from and to and give cost element category as 1,
which is primary. SAVE
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Note: If we create a GL with reference of another GL which has cost element, the cost element data
will not be copied. We need to create the cost element for the new GL created.

3. Manual Creation of Cost Elements

Creation at FI Level FS00
Cost elements are nothing but GL Accounts, which can be created at FS00 level at any time if the
GL Masters are created.

Path: FS00 – Environment – Edit Cost Element

You get Cost Element : 122122 GL Master number
Validity Period : 01.01.2003 to 31.12.2003
Cost Element Category : 1 Primary Cost/ Cost reducing Revenues
Indicators:

The cost elements can also be created at Co Level (KA01)

A/c – CO – CEA – MD – Cost element Individual Processing – Create Primary Cost Element
This method is adopted when the CO is activated at a later stage, i.e., FI is implemented first and
later the CO.
Note: If the GL master is created with reference the Cost Element will not be copied.

4. Creation of Cost Center

Easy Access – A/c – CO – Cost Center Accounting – Master Data – Cost Center – Individual
Processing – Create – KS01

Cost Center :
Valid From : 01.01.2003 to 01.12.2003
Go to master Data Tab
Give Details – Cost center Category
Go to Control Here locking facilities are available. SAVE

 We can create Cost center with Reference also

5. Assigning Cost Center to Cost Element

Go to Change of Cost Element KA02
Go to Default Account Assignment Tab – Assign a Cost Center by selecting though the list of Cost
Elements Created.

4. Changing Field Status of GL Accounting to make Cost Center Mandatory

SPO – FA – FAGS – Document – line item – Controls – Maintain FSV

Select your FSV – Double Click on Field Status Groups – Select G004 (Cost Accounting) – double
click – got to addl. Account assignments – make Cost Center a required field SAVE

Note: The same FSG G004 is to be attached to the Cost Elements (GL Accounts)

5. Creation of Number Range for Documents

Spro – CO – GEN CO – Organization – Maintain No. Range for CO KANK

Give CO Area – Click on Groups (maintain F6) - Go to Groups in Main Menu – insert – (will get a
dialog box like FI number intervals) give Text FI Postings ( This is done if you want go give Text
which will create a check Box and Give as Group header in the KANK) - Give number range From 1
to 1000 – select insert enter.
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 We need to attach a process to see that the data flows from FI to CO

IN the same screen go to COIN CO Through Postings From FI – double click – go to Edit – assign
Element Group – The selected element will go be transferred to above.

6. GL posting F-02
01 40 400100 Salaries (Attach G004) 100000
02 50 200200 Cash 100000

7. Viewing Reports
EASY – a/c – CO – CCA – IS – Reports for CCA – Line Items – KSB1 Cost center actual Line Items

8. Reposting Line Items Process Code RKU3

a. We need to attach a Process Transaction code KANK

Give CO Area – Click on Groups (maintain F6) - Select Process RKU3 – double Click – ( it turns
Blue) – Check the Box of th the Group to which you want to assign Eg. FI Postings - go to Edit in
the Main Menu – Click on Assign Element Group - will transfer the process RKU3 to the FI Postings
Group. Save

b. Reposting
Easy – A/c – CO – CCA – Actual Postings – Repost Line items – Enter KB61

Reposting is an aid in which primary costs are posted to a receiver object under the original cost
element (the cost element of the sender object). Reposting is used to rectify incorrect postings. The
following methods are available:
 Transaction-related reposting:
Each posting is made in real time during the current period.
 Periodic reposting:
Produces the same results as transaction-related reposting. The costs being transferred are
collected on a clearing cost center and then transferred at the end of the period according to
allocation bases defined by the user.

Doc Number
Company code
Fiscal Year

You will get a screen where you need to repost the line items.
In the column Value Transaction Currency, give the Amount which you want to repost to another
cost Center – Click on Account Assignment Tab on the top menu – you will get a pop up – Give the
cost center name to which you want to repost – Save

Result: The balance of amount will remain the Transferring Cost Center and the amount reposted
(Given in the Screen by you ) will be transferred to the receiving cost center.

c. Viewing the Reposted Line Items

Easy – A/c – CO – CEA – IS – Reports for Cost and Revenue Element Accounting – Master Data
Index – Cost Element Master Data Report KA23

Here we can see the report of the Reposted line items based on Cost Element / Cost Element
Groups / Selection Variants / All cost elements. We need to give the Document number and view
the reposted line item.
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The other way of viewing the reposted line items is go through KSB5, which displays actual cost
Documents.
EASY – A/c – CO – CEA – IS – Reports for Cost and Revenue Element Accounting – Document
Display – CO document Actual Costs KSB5

Also go to KSB1 where the data of the cost center now reposted to various cost centers will be
displayed along with the original amount captured from FI Documents.

8. Reposting Costs Process RKU1

a. We need to attach a Process Transaction code KANK

Give CO Area – Click on Groups (maintain F6) - Select Process RKU1– double Click – ( it turns Blue)
– Check the Box of the Group to which you want to assign Eg. FI Postings - go to Edit in the Main
Menu – Click on Assign Element Group - will transfer the process RKU1 to the FI Postings Group.
Save
b. Reposting Costs
Easy – A/c – CO – CCA – Actual Postings – Manual Reposting of Costs – Enter KB11N

Item Cost Cost Amount Currency Cost Center Total UM Text

no Center element New Quantit
old y
00000 Give Give To be Give Receiving Reason
Sender GL a/c transferre Cost Center
Cost d
Center

d. Viewing the Reposted Costs

EASY – A/c – CO – CEA – IS – Reports for Cost and Revenue Element Accounting – Document
Display – CO document Actual Costs KSB5

We can view the reposted Costs by giving the Document number of the Controlling Area.
Alternative Way is KSB1
EASY – a/c – CO – CCA – IS – Reports for CCA – Line Items – KSB1 Cost center actual Line Items

10. Grouping of Cost Centers

Hierarchical group of cost centers defined and organized according to selected criteria. A cost center
group is created based on some criteria like Production Cost Center Group or Service Cost Center
Group for reporting purposes. In this activity we try to group the cost centers by attaching several
cost centers based on some criteria to a Group.

Easy – A/c – CO- CCA – Master Data – Cost Center Group – Creation KSH1

a. Creation of Production Cost Center Group.

Cost Center Group : (Give name of the Group) Enter
Will ask whether to create a new group give Yes
Will Create a Group with the name Give Description
Keep your cursor on your cost center Group (Blue Color) - Click on Insert Cost Center Tab (UP)
You will get a provision for list of cost centers to be attached to this group – attach the cost centers,
which you want to include in the Group by locating them through possible options. Save Back
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b. Creation of Service Cost Center Group.

Cost Center Group : (Give name of the Group) Enter
Will ask whether to create a new group give Yes
Will Create a Group with the name Give Description
Keep your cursor on your cost center Group (Blue Color) - Click on Insert Cost Center Tab (UP)
You will get a provision for list of cost centers to be attached to this group – attach the cost centers,
which you want to include in the Group by locating them through possible options. Save

c. Display Actual Cost Line Items for Cost Center Group KSB1
Can view the line items based on Cost Center Group.

11. Cost Element Group

Easy – A/c – CO- CCA – Master Data – CE Group – Create KAH1

a. Creation of Cost Element Group

Cost Element Group: (Give name of the Group) Enter
Will ask whether to create a new group give yes
Will Create a Group with the name Give Description
Keep your cursor on your cost element Group (Blue Color) - Click on Insert Cost Element Tab (UP)
You will get a provision for list of cost elements to be attached to this group – attach the cost
elements, which you want to include in the Group by locating them through possible options.
Save
12. Default account assignment based on Business Area

SPRO – CO – CCA – Actual Postings – Manual Actual Postings – Maintain Automatic Account
assignment 0KB9
New Entries
Ccode Cost Business Cost Center Order Prf. Profit Center A A/c
Element Area Assignment
AS01 check AS_CCA
Save
In this activity we can give by default a particular cost element to a business area/cost
center/order/prf/a/c assignment. After entering the data Save
Select your entry and double click detail for Business area/valuation area
New Entries
Valuation Area Business Area Cost Center Order Profit Center
Azb1 AS_CCA
SAVE
In this activity we are telling the system to assign by default the Business Area selected. This can
be done for Profit center also. Note to Check Business Area / Profit Center Column in the 1st table.

12. Cost Center Wise Planning

The following settings need to be performed.

1. Existence of Version (SPRO)
2. Version should not be locked for that plan period.
3. Attaching the process RKP1 for planning (KANK)
4. Planning
Easy – A/C – CO – CCA – Planning – Cost and Activity Inputs – Change KP06

Version 0 From Period 1 To Period 12 Fiscal Year 2003

Cost Center AS_CCA to
Or
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Group Cost Center

Activity Type
Shift Radio Button to Form Based
Select DOC Over View
You get the following Table

Cost Plan Fixed Dis VC Panned P/Veri Unity

Element Cost Fixed

SAVE
Keep cursor on the amount column – go to period screen – The screen will give the amount
allocated to next 12 months. So in this activity we are jest allocating the fixed amount for 12
periods as some standard.

13. Plan / Actual and Variance

EASY – A/c – CO – CCA –IS – Report for Cost Center Accounting – Plan /Actual Comparison cost
centers – Cost Centers Actual / Plan / Variance S_ALR_87013611

 Give the regular data as you would give for the other reports.

In this activity we are viewing the variance of the Cost Elements Group. The variance is between
the actual and the Planed for a particular period. The actuals are picked up from the Cost Elements
of the group and the Planned is the amounts given in the earlier process by us.

14. Creation of Secondary Cost Elements (Apportionment of Service Cost to Production)

a. Creation
Easy – A/c – CO – CEA – MD – CE – Individual Processing – Create Secondary KA06

In this activity we are creating the Secondary Cost Element. This has nothing to do with the GL
Accounts, which are Primary Cost Elements for CO. This is created at CO level and will be used for
the purpose of Apportionment. This is a typical case of Service Center Cost to be apportioned to
some production cost center or other and ultimately this Secondary Cost Center Costs should be
completely allocated to some Production Cost Center or other.

Cost Element 900000 Give a/c number Beyond GL account Numbers

Value Date From: 01.01.2003 to 31.12.9999
Click on Master Data
WE get a screen similar to the Cost Element Creation Give Necessary details.
Cost Element Category 42 (Assessment) SAVE

b. Creation of Assessment Cycle

Attaching the process RKIU for overhead assessment Process KANK

We need to attach a Process Transaction code KANK

Give CO Area – Click on Groups (maintain F6) - Select Process RKIU – double Click – ( it turns Blue)
– Check the Box of the Group to which you want to assign Eg. FI Postings - go to edit in the Main
Menu – Click on Assign Element Group - will transfer the process RKIU to the FI Postings Group.
Save
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In this activity we apportion the secondary cost element Costs to the production Cost centers.

We get a dialog box

Period 1 to 12
Year 2003

Background Processing
Test Run
Detail test

Click on Extras in Main Menu – Cycle – Create (KSU1 will be executed)

Cycle : Some Name Date : 01.01.2003 Enter

Enter TEXT Check Iterative – Click on Attach Segment Tab (top)
We get a screen with the following TABS
Segment Header Tab
Give Assessment Element: Secondary Cost Element
Sender Values - Rules – Share % ( give as per what is decided)
Radio button Actual Planned
Sender and Receiver Tab
Give sender Cost Centers (Service Cost Center)
Give receiver Cost Centers (Production Cost Center)
Sender Values Tab
Give Percentage as decided SAVE
M: Cycle XXXX Starting Date xxxx has been saved.

c. Execution of the Assessment Cycle KSU5

We get a dialog box

Period 1 to 12
Year 2003

Background Processing
Check Test Run
Check Detail test
Cycle Start Date Text
XXX 01.01.2003 Will be automatically picked up by the system (You Gave at Creation)
Execute
This process will complete the assessment cycle. To see the effect go to
1. Messages and see
2. Go to Sender – it gives the data of amounts transferred
3. Go to Receiver – it gives the data of amounts received.

If the posting is correct uncheck TEST RUN and EXECUTE.

For Viewing the Reports KSB1

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Internal Orders
Internal order is the general term for overhead cost orders, internal orders with revenues, accrual
orders, and Capital investment orders.

An Internal Order is an object used to monitor costs and, in some instances, revenues for an
organization.
Internal orders can be used to
 Monitor the costs of short-term measures
 Monitor the costs and revenues related to a specific service
 Monitor ongoing costs

Internal orders are divided into the following categories:

 Overhead orders
 Overhead orders monitor sub areas of indirect costs arising from short-term measures. They
can also be used for detailed monitoring of ongoing plan and actual costs independently of
organizational cost center structures and business processes.
 Capital investment orders
 Capital investment orders monitor investment costs, which can be capitalized and settled to
fixed assets.
 Accrual orders
 Accrual orders monitor period-based accrual between expenses posted in Financial
Accounting and accrual costs in Controlling.
 Orders with revenues
 Orders with revenues monitor the costs and revenues arising from activities for partners
outside the organizational boundaries, or from activities not belonging to the core business
of the organization.

1. Creation of Internal Order Type

SPRO – CO – IO – Order Master Data – Define Order Types – KOT2
New Entries
A dialog box will come Give Order Category 01 (IO Controlling)

Will get a bigger screen

Order Type IO For Vehicles
IO Category Controlling
Go to General Parameters:

Settlement Profile Leave Blank

Planning Profile 000001 General budget/plan profile
Budget Profile 000001 General Budget Profile
Object Class Overhead Costs
Functional Area
Collective order without automatic Goods Movement
Go to Status Profile
Status Profile 00000002 Internal orders
Check Release Immediately Save
Some : Messages

Click on Number Range Interval (in the same Screen)

Will ask you to Save - will go to KANK kind of Screen with number range – Select your Order
Vehicles (usually found in the Last) – Double Click on it – turns blue – Check Motor Pool A – go to
Edit – Click Assign Element. SAVE
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2. Creation of Internal Orders

Easy – A/c – CO – IO – Master Data – Order - Create – KO01

Order Type : VEHI ( The one you have Created will come in the possible options)
Click on Master Data TAB

Order AP3636
Short Text Internal Order for Vehicle AP 3636
Assignment TAB
Company Code AS
Business Area ASB1
Object Clause Overhead
Control Data Tab
Check Statistical Order
System Status REL (Up Down icon)
User Status PLIM
Status No 0 SAVE
Message: Internal order Created

3. Making Internal Order a required entry at Field Status Groups

Go to Field Status Variant in FI Global Settings – Select G004 – Copy and Make it G002 – Save
Attach G002 as FSV in the Account, which we will be creating (400220)

4.Creation of GL Masters
Vehicle Maintenance Account – A/c Group Manufacturing Expenses – P/L – line item – G002 – 000
Edit Cost Element – Go to Master Data – Primary Cost Element 1 – Go to Default A/c Assignment
Tab Give your I O Name and Cost Center Name SAVE

5. Posting Transactions F-02 40 Vehicle Maintenance 400220 50 200200 Cash

6. Viewing Internal Order

A/c – CO – IO – Actual Postings – Repost Line Item – KB61

Doc No.
CC
Fiscal Year
Cost Element
Will display Line Item
Got to Change Account Assignment Will get a dialog Box
Change Receiver
Cost Center Give Receiving Cost Center
Order Give Internal Order which Receives.