SAP CO ECC 6.0 Bootcamp - Day 4

SAP CO ECC 6.0 Bootcamp SAP CO ECC 6.0 Bootcamp_Day 4.
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SAP Controlling (CO)

Bootcamp
Day 4 1
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SAP CO ECC 6.0 Bootcamp SAP CO ECC 6.0 Bootcamp_Day 4.ppt
Agenda – Day 4
• Review of Day 3
• Profitability Analysis Overview
• Project System
– Introduction
– Project Structure
– Planning
– Budgeting
– Execution
– Closing
2
Key Message(s):
Additional Information:

Review of Day 3
• We covered the following topics on Day 3:
– Profit Centre Accounting – Aim of PCA
– Profit Centre Accounting – Master Data
– Profit Centre Accounting – Transaction Data
Processing
– Profit Centre Accounting – Transfer Pricing
– Profit Centre Accounting – Planning
– Profit Centre Accounting – Reporting
– Product Costing Overview
Key Message(s):
Note to faculty: Refer to the Previous Day Review Approach section in the Faculty
Guide for review questions and answers.

Agenda – Day 4
• Review of Day 3
• Project System
– Introduction
– Planning
– Budgeting
– Execution
– Closing
4
Key Message(s):

Profitability Analysis Overview

• Business purpose:
– Profitability Analysis (CO-PA) is use to provide
profitability information on company’s market
segments or sales channels.
– Profitability Analysis helps to answer these questions:
• Which are the fastest growing customers?
• What are my best performing products in different regions?
• In which market segments are we successful?
Key Message(s):

Overview (cont.)
• Key Points:
– Profitability analysis information is a combination of
characteristics and value fields.
• Characteristics are the subject to be analysed (customer,
products, profit centre).
• Value fields are the performance figures (revenues,
discounts, product costs, etc.).
Key Message(s):
There are two types of Profitability Analysis – account-based profitability analysis
and costing-based profitability analysis.
Value fields can be created for costing-based profitability analysis. In the case of
account-based profitability analysis, values are reported from the cost
elements/revenue elements.

Types
• TypesofofProfitability Analysis
Profitability Analysis
• Costing-based • Account-based
– Reports displays values – Reports display values
by value fields. by cost elements (CO
– Indirectly reconciles with revenue and cost
FI. element).
– Uses CO-PA-specific – Reconcile directly with
transaction tables. FI (on account level)
– Revenue and cost of – Share data tables with
sales are recognised other CO applications.
simultaneously. – Revenues and cost-of-
sales are updated
asynchronously. 7
Key Message(s):
Costing-based profitability analysis provides the flexibility to define value fields
based on the way an organisation wants to view the sales performance.
Example of custom value fields – Realisation (Gross Sales revenue less Trade
Discount less On-invoice Discount)
Account-based profitability analysis gives the facility to reconcile value flow in FI and
PA, as the reporting base is the cost element.
In an operating concern, either or both of the types of profitability analysis can be
activated.

Profitability Analysis and Profit

Centre Accounting
Profitability Analysis Profit Centre Accounting
• Goal: To provide profitability information on • Goal: To provide profitability information in
company’s market segments or sales order to analyse profitability of internal
channels to support corporate planning and organisation units and assign responsibilities
decision making, specifically in sales and for their performances.
marketing. • Structure: Profit centres should be structured
• Structure: Market segments configured in where each profit centre has responsibility for
the system as a characteristic. revenues, expenses, and, in some cases,
• Performance figures are the profit and loss certain asset and liabilities.
balances or predefined value fields: • All business transactions for profit and loss
– Market segments are a combination
information of customer, products, division, generates postings in Profit centre as well as
etc. the flow of the goods and services between
– Performance figures are the measurement of profit centre.
quantities, revenues, cost of good sold, period • Reporting: Profitability can be analysed in a
costs and overhead costs. two-dimensional reporting tool, which consists
• Reporting: Profitability can be analysed in a of the profit centres/profit centre groups and
multi-dimension reporting tool. accounts/account groups.
8
Key Message(s):
Example: Johnson & Johnson has grouped its business into three segments –
Consumer Care, Medical Devices & Diagnostics, and Pharmaceuticals. Each
segment has several franchises. For example, Consumer Care business segment
has skin care, hair care, oral care, baby care and so on.
This organisation conducts business across several countries.
• If J & J wishes to analyse how much contribution does the baby care
franchise within the Consumer Care business segment in the APAC region
is adding to the organisation, then profitability analysis could be used to
provide this type of information. In this case, franchise, business segment and
region are the characteristics and contribution is one of the value fields.
• If J & J wants to report P&L-based on the three segments, for management
control, then the three business segments can be treated as profit centre, and
Profit Centre accounting could be used to meet this requirement.
Note: This illustration is hypothetical to explain the possible uses of the application’s
components.

Profitability Accounting Methods

Cost of Sales Accounting Period Accounting
Revenue Revenue
Sales Deduction Sales Deduction
Cost of Sales Stock changes
Capitalised internal activities
Changes in work in process
Gross result Total Output
Sales and Distribution costs Total Costs:

Administration costs Material costs
Research and Development Personnel costs
Depreciation
Result Result
Key Message(s):
Cost of sales accounting and period accounting methods are two different
approaches and have two different structures, although they do not impact the net
profit reporting ultimately.
Cost of sales accounting categorises and reports the transaction values – function
wise (administration, Sales 7 distribution, etc.).

Profitability Accounting Methods

(cont.)
Cost of Sales Accounting Period Accounting
• Emphasis on matching the • Emphasis on summarizing

revenues for goods and/or the activity and situational
services provided against change over a period of time,
related expenses for a given organisational unit
• Provides the profit and loss • Provides the revenues and
information to optimised primary expenses that have
margin analysis specifically been incurred during a given
for the sales, marketing and period as well as stock
product management area values, work in process and
capitalised activities. It is
optimised for production and
profit centre areas
10
Key Message(s):

Data Flow in Profitability Analysis

Production variances - Settlement
CO-Cost Element Accounting Production Sales & Profitability
Profit Centre Accounting

Distribution Billing Analysis
Financial Accounting
Profit Centre
Product Cost of Good Sold
Costing
Activity Allocation
Overhead Assessment
Management
Settlement
Direct FI Posting
• Costing-
Costing-based in CO-
CO-PA: • Account-
Account-based in CO-
CO-PA:
• Information taken from SD: • Information taken from SD:
– Order is taken or changed (optional) – Good issues is performed
– An invoice for an order is generated – An invoice for an order is generated
11
Key Message(s):
Postings to FI-GL accounts, which are primary cost elements, result in data flow
from FI into CO-PA.
Additionally, transaction processing within the CO module can also result in data
flow into CO-PA; examples: period-end allocations, order settlements.
Settlement of Production Variances into CO-PA and billing information from SD
invoices can update the CO-PA tables.
Line items have to be assigned to an account assignment object “Profitability
segment.”
Additional profitability analysis documents are created to post values into CO-PA.

Parallel Currencies in Profitability

Analysis
Account-Based
Controlling
CO – Profitability Transaction Company Code
Currency Currency Area
Analysis Currency
Costing-
Costing-Based
ased
Operating
CO – Profitability Company Code
Concern
Analysis Currency
Currency
Profit Centre Transaction Company Code Report

Currency Currency Currency
Accounting
12
Key Message(s):
In costing-based profitability analysis, actual data is updated in the operating
concern currency. Additionally, data can be stored in company code currency for
organisations having multi-national operations. Data in these two currencies can be
stored for legal valuation as well as “profit centre valuation.” Multiple valuation
approaches are activated.

Organisation Structure in CO-PA

• Operating concern: the highest reporting level in CO-PA
– It is recommended to have a single operating concern if the
controlling areas and company codes share the same fiscal year.
• Characteristics: the subject that we want to report on
• Value fields: performance figures
s
ti c
n
ris
io
t e
eg
ac
ar
Customer
Ch • Revenue
• Cost of goods sold
Value fields Product
• Profitability segment: combination of characteristics 13
Key Message(s):
Operating concern, the organisation unit for CO-PA application component is
integrated with other components.
Controlling area is assigned to an operating concern. One or several controlling
areas can be assigned to an operating concern.
Controlling area, by itself, can have one or more company codes assigned to it.
Company code > Controlling Area > Operating Concern.
Transactions are account assigned to a “Profitability segment” and updated in PA.
Referring to the hypothetical illustration of the J & J case, business segment,
franchise, region, etc. are examples of characteristics. Contribution is a value field.

Organisation Structure in CO-PA

(cont.)
• Characteristics:
– Fixed characteristics: pre-defined automatically for
every operating concerns.
– Non-fixed characteristics: characteristics that can be
added to an operating concern (up to 50
characteristics can be added)
• Non-fixed characteristics must be added in field
catalogue.* There are two ways to add characteristics:
– Choose an existing field from SAP tables.
– Create a characteristic independently (should begin with
WW… and be 4 to 5 characters total).
• * Field catalogue contains all fields that can be used to
define the data structures for CO-PA reporting. 14
Key Message(s):
Collection of characteristics and value fields build up the “data structure” for an
operating concern.
Examples of fixed characteristics: Company code and Controlling Area

Characteristics
15
Key Message(s):
This is a pre-delivered characteristic. Custom characteristics are created with a
prefix WW.
Characteristics are created independent of operating concern.

Value Fields
• In costing-based Profitability Analysis, value fields
can be either highly summarised (a summary of cost
element balances) or highly detailed (representing
just one part of a single cost element balance).
• There are no fixed value fields for a new operating
concern.
16
Key Message(s):
SAP pre-delivered value fields can be used. If required, a custom value fields can
be included.
Value fields are created independent of operating concern.
Two value field types: amount and quantity
Examples: Invoiced quantity is a value field of Quantity type.

Value Fields (cont.)

• In account-based Profitability Analysis, all values are
updated to accounts.
– All value fields must exist in field catalogue before they
can be used to define a new operating concern. In the
field catalogue, there are some suggested value fields
that might be used in a new operating concern.
– If a value field needs to be created, it should begin with
VV… with 4 to 5 characters total.
17
Key Message(s):

Characteristic Derivation
Concept
• Refers to the system’s attempts to determine
characteristic values for characteristics for all CO-PA-
relevant transactions.
• Supplementing those values determined through the
automatic mappings, derivation can access additional
information (characteristic values) both on and off the
originating transaction.
• For every CO-PA-relevant transactions, the system
attempts to derive a characteristic value for each
characteristic in the operating concern (if derivation
configuration is complete).
18
Key Message(s):

Characteristic Derivation
Concept (cont.)
• Unsuccessful derivation
Customer Group for characteristic results
CG 1 in the posting of a blank,
null, or unassigned
Customer District State
characteristic value.
C1 D1 S1
• The total combination of
characteristic values for
Product Product Group
a given transaction
P1 PG 1
comprises the definition
Strategic Business Unit
of the relevant
SB 1
Sales Rep. Sales Region profitability segment,
R1 SR 1 which is an account
assignment object for
CO-PA.
19
Key Message(s):
In this illustration, the characteristic for Strategic Business Unit can be derived
based on the values of the other characteristics.

Source of Values Fields

• Quantity
• Revenues
SD Billing documents • Sales deductions
• Cost of goods sold
CO-PC Cost estimate • Cost of goods manufactured
• Bonuses
FI General ledger postings • Freight costs
• Sales & Administration

CO-OM Cost Centre, Order • Freight costs
PS WBS element, network • Research & development
20
Key Message(s):
For example, SD invoice has a pricing procedure. Pricing procedure is a collection
of condition types, calculation and posting rules.
Condition type can reflect a pricing/costing element (example: Gross Price or Basic
price can be identified in the pricing procedure with a condition type PR00). Each
condition type can then be assigned to a value field in CO-PA. When the SD invoice
is posted, the condition types receive values. Data flows into CO-PA with the value
fields receiving data from the assigned condition types.
Similarly data flow into value fields are set-up for each source: Cost Estimate in
Product Costing, Cost Centre in Overhead cost management, etc.
COGS = COGM + direct overhead
COGM = Direct material + labour + other direct costs

Basic Reporting
Contribution Contribution
Region Revenue
Margin 1 Margin 2
Southeast
Characteristic Value
West
Key figures/value fields
• Select the desired variables, characteristics and key figures

• The selected characteristics form the dimensions of a multi-dimensional
data cube
21
Key Message(s):
Standard reports are not available for CO-PA reporting as the data structure itself is
flexible.
Profitability reports have to be custom-designed, although it does not require any
advanced programming knowledge.
In addition to using value fields, key figure schemes can be defined for reporting
requirements. Example for a key figure scheme: Contribution is derived based on
the formula (Revenue – Variable costs). Revenue and variable costs would be a
collection of one or more value fields.

Knowledge Check
1. What are the types of Profitability Analysis?
2. What are the organisation units in CO-PA?
3. What are the sources in SD invoice for the value
fields?
4. Which element in CO-PA can be used as an
account assignment object during postings?
22
Key Message(s):
Note to faculty: Refer to the Knowledge Checks section in the Faculty Guide for the
answers to these review questions.

Questions
23
Key Message(s):

Agenda – Day 4
• Review of Day 3
• Project System
– Introduction
– Planning
– Budgeting
– Execution
– Closing
24
Key Message(s):

Project System Introduction

• Projects are different from common tasks in the
following ways:
– Unique and complex, therefore, involving risk
– Limited in duration, cost and capacity
– Subject to quality requirements
– Usually strategic for the company
• Projects are structured, planned and monitored in the
Project System (PS) module.
25
Key Message(s):

Project System – Main

Functionalities
• Define project scope
• Break down the project into manageable work packages
• Coordinate time and dependencies* for tasks
• Schedule*
• Plan and allocate resources
• Analyse and level human resources capacity*
• Allocate funds
• Collect costs
*Topics not covered by this course. This course will cover only the financial
view of the PS module.
26
Key Message(s):

Project Life Cycle
Phase
Project Structuring Planning Budgeting Execution Closing
Function Definition
Project
Definition
WBS
Rough planning Original budget Material Settlement
Primary costs Updates Service Cost transfers
Unit costing Releases Internal activity
Activity planning
BUDGETED RELEASED TEC.CLOSED

Status CREATED CREATED CREATED
CLOSED
AVAIL.CONTROL SETL.RULE
Time
27
Key Message(s):

Organisational Structure
• The PS module does not have organisational
structures. It uses other modules’ structures (from
Logistics and from Accounting) to present its
information in different ways.
28
Key Message(s):

Project System Vs Cost Center

Accounting
Project Systems Cost Centre Accounting
Project Systems (PS) is a separate Cost Centre Accounting (CCA) is a controlling
module in itself. component that represents Overhead Cost
Controlling function.
PS consist of Projects that are defined to CCA is used to understand where the costs
manage Projects. are occurred within an organization – within a
Co Area.
PS does not have any organizational Cost Centres are organisational units within a
structures and uses other modules’ Co Area.
structures.
PS is comprehensive and analyses Cost centres are merely cost collectors and
project costs/revenues based on Work use planning data for comparative analysis
Breakdown Structure. against costs incurred.
Example: Setting up a car manufacturing Example: Various departments involved in
plant can be defined as a Project. that activity can be defined as Cost Centres.
29
Key Message(s):

Questions
30
Key Message(s):

Agenda – Day 4
• Review of Day 3
• Project System
– Introduction
– Planning
– Budgeting
– Execution
– Closing
31
Key Message(s):

Project Structure
Project Definition: P-9999
P-9999
Work
P-9999-01 P-9999-02 Breakdown
Structure
(WBS)
P-9999-01-01 P-9999-01-02 P-9999-02-01 P-9999-02-02
Networks
32
Key Message(s):
Work breakdown structure forms the basis for organisation and management of a
project.
WBS (work breakdown structure) consists of WBS elements. Each WBS element
represents a task to be performed within a project.
Planning and budgeting activities can be performed for a WBS element.
Revenues/Costs can be posted to a WBS element.
WBS element can be an account assignment object.

Project Definition
• The first step in a project is project definition.
• At the project definition phase, you identify the project
goals and characteristics.
• PS project definition contains project’s general data.
• Organisational structure data in the PS project
definition:
– Controlling Area
– Company Code
– Business Area
– Profit Centre
– Plant
33
Key Message(s):
Project definition contains general data: name, description, person responsible,
start/end dates, etc.
Key attributes of the projects include planning profile, budgeting profile, investment
profile, assignment of a project to organisational units like controlling area, company
code, profit centre, etc.
Example: Setting up a car manufacturing plant can be defined as a project.

Work Breakdown Structure (WBS)

• The next step in a project is structuring.
• Structuring is a essential step for the project success
because it defines project scope.
• At the structuring phase, you break down the project
into manageable work packages, setting up a
hierarchy.
• A project is structured according to how it is
organized and to the processes involved. However,
the criteria you use to classify and divide work
depends on the type and complexity of the project.
34
Key Message(s):
Work breakdown structure represents the tasks to be performed. WBS elements
represent each task to be performed. More importantly WBS element definition of
the task or sub-task should be at a level of detail at which management of the WBS
element is possible and meaningful.
WBS definition should strike a balance between having too many WBS elements or
too few WBS elements within a project definition.

Work Breakdown Structure (WBS)

(cont.)
• PS WBS elements are essentially cost collectors,
and, together, present the financial view of the
project.
• Organisational data in the PS WBS element:
– Company Code, Business Area, Plant, Profit Centre,
Technical location/Equipment, Responsible Cost
Centre, Capital Investment Program, Jurisdiction
Code and Joint Venture.
Note: You can establish start and finish dates for WBS elements.
However, this course does not cover dates.
35
Key Message(s):
WBS element definition has general data: name, person responsible, start/end
dates, etc.
WBS element can also be assigned to organisational data.
WBS element, being cost collectors, can be used as account assignment objects.
Plan/Actual costs and revenues can be posted and assigned to a WBS element.

Responsible Person
• You can assign a responsible person to each WBS
element.
• Functionalities:
– Reports – You can get project information per
responsible person (via standard reports or changing
reports layout).
– Availability control – The system can be configured to
send an email to the responsible person when actuals
posted to their WBS element exceed a pre-defined
percentage of budget.
36
Key Message(s):

Responsible Person
Configuration
SAP User Name

assigned to the Person
Responsible
37
Key Message(s):
Person responsible is created with a code and name. The SAP user name can be
assigned to the person responsible.
Project components, WBS elements for example, can be assigned to a person
responsible.
For certain transaction postings to WBS elements, mail intimation to the person
responsible can be automated to report exceptions like “Budget exceeded”,
“availability control,” etc.
Path: IMG > Project System > Structures > Operative Structures > Work
Breakdown Structure (WBS) > Specify Persons Responsible for WBS
Elements
Transaction: OPS6

Project Mask
• To be able to codify PS project definition and WBS
elements, you need to define a project mask. It
includes a key and strings:
Key Strings
P -0000-00-XX
38
Key Message(s):
Project masks help to display the project numbers. (0 – numeric characters; X –
alphanumeric characters)

Project Mask (cont.)

• A key has only 1 alpha character and can be used in
only 1 project mask.
• Each string will codify a different WBS level:
– 0 represents a numerical value
– X represents an alphanumerical value
– The strings can be separated by a number of
characters. Examples include (-), (.), (/).
– Project masks are valid for any project in the system.
39
Key Message(s):

Project Mask Configuration
Coding Mask
configuration
40
Key Message(s):
Breakdown Structure (WBS) > Project Coding Mask > Define Project
Coding Mask
(Transaction: OPSJ)

Project Structure Example

• Oil and Gas company – Exploration & Production project
Field XX development
Pre
Concept Feasibility Execution Commission
feasibility
Wells Raisers
Well 1, 2, …, n Raiser 1, 2, …, n
Build Drill
41
Key Message(s):

WBS Versus Internal Orders

• WBS is a proper hierarchy where each element is
linked to its superior and to its inferior element:
– Planning: You can plan all projects’ WBS elements at
once; you can total up your plan.
– Budget: You can budget all projects’ WBS elements at
once; you can total up your budget.
– Availability control: The system checks the budget in
higher levels if there is no budget assigned to lower
WBS elements. The system can send an email to the
responsible person when actuals posted to their WBS
element exceed a pre-defined percentage of budget.
42
Key Message(s):

WBS Versus Internal Orders

(cont.)
• It is possible to create a hierarchy of Internal Orders
groups, but even in this case, the Internal Orders are
not linked to each order.
• You can assign dates to a WBS element.
43
Key Message(s):

Project System Versus Internal

Orders
Project Systems Internal Orders
Project Systems (PS) is a separate module in Internal Order (IO) is a controlling component
itself. represents Overhead Cost Controlling function.
PS consist of Projects that are defined to IO is primarily used by management to analyze
manage Projects. cost at a lower level of detail than a cost centre.
PS does not have any organizational structures IO’s are created and assigned to Co Code, Co
and uses other modules’ structures. Area.
PS is comprehensive and analyze project IO’s are intermediate cost collectors and allow a
costs/revenues based on Work Breakdown detailed analysis of costs that are being settled
Structure. to a Co object.
Example: Setting up a car manufacturing plant Example: Purchase of raw materials from
can be defined as a Project. domestic and foreign vendors routed through
IO’s and then settled to Cost Centres help
analyze cost centre wise domestic and foreign
procurement costs.
44
Key Message(s):

Networks
• After establishing the project hierarchy, you can break
down your work packages into tasks (or operations).
At this step, you determine tasks duration and which
tasks are dependent on each other, establishing the
sequence in which they will be performed.
• PS networks present the operational view of the
project.
45
Key Message(s):

Networks (cont.)
• PS networks functionalities not available for WBS
elements:
– Relationships
– Critical path determination
– Work centres and individual resources planning and
analysis
– Work centres capacity levelling
– Automatic creation of reservation and purchase
requisitions and their integration with networks
scheduling
– Automatic calculation of estimate to complete (ETC)
and forecast
46
Key Message(s):

Network Objects (1 of 3)
• Network header:
– Contains the network’s general data and data that is
common to all operations and components
• General costs operation:
– Used when you do not know if work will be performed
internally or externally
– Main information: duration and cost
• Internal operation:
– Used when work is performed internally
– Main information: work centre, work, individual
resources (integration with HR)
– Functionalities: resource analysis, capacity levelling
47
Key Message(s):

• External operation:
– Used when work is performed externally
– Main information: contract (integration with MM)
– Functionalities: purchase requisition created
automatically to consume the contract assigned
• Services operation:
– Used when work is performed externally
– Main information: services from Service Master Data or
services description + MM information (e.g., Purchasing
organisation, Material group)
– Functionalities: purchase requisition created
automatically to purchase the services assigned
48
Key Message(s):

• Material components:
– Assigned to any operation to indicate materials that will be
consumed by the operation
– Functionalities: purchase requisition created automatically
to purchase the materials assigned or reservation created
automatically to consume the materials assigned from stock
• Purchase requisitions and reservations are integrated with
the operations date. If an operation date changes, the
purchase requisition or reservation assigned will have its
delivery date also changed.
• Purchase orders are not integrated with the operations
date as it represents a commitment with the vendor.
49
Key Message(s):

WBS Versus Networks

• Most companies that implement PS module keep their
projects’ operational view in separate systems like
Primavera or MS Project.
• In this case, if the client is interested in having only the
projects’ financial view in the PS module, you do not
need to implement networks.
• Note: As this is a CO course, it will only cover the financial view of PS
module. Therefore, networks will not be covered.
50
Key Message(s):

Project Profile
• To be able to create a project in the system, you need
to define a Project Profile.
• The Project Profile puts together a number of other
profiles that define the project’s way of work.
• You will see the Project Profile details after you have
seen the other profiles’ details.
51
Key Message(s):

System Walkthrough 4.1 –

Project Structure
• Refer to System Walkthrough 4.1 – Project Structure
in your Faculty Guide.
– Project Structure (CJ20N)
– Responsible Person configuration (OPS6)
– Project Mask (OPSJ)
52
Key Message(s):

Exercise 4.1 – Create Project

Structure
• Refer to Exercise 4.1 – Create Project Structure in
your Participant Workbook.
– Your task is to create a project structure to support
this project planning and control.
53
Key Message(s):

Questions
54
Key Message(s):

Agenda – Day 4
• Review of Day 3
• Project System
– Introduction
– Planning
– Budgeting
– Execution
– Closing
55
Key Message(s):

Planning and Budgeting
WBS Element
Project Funds
Budget
Planned Values
Commitments
Actual Values
AuC
Cost Planning
Planned Values Cost Objects Actual Values

56
Key Message(s):

Planning
• Plan costs are the costs you expect to incur in your
project as it is executed. Project System allows you to
plan costs in different ways:
– Rough planning: total amounts in each WBS by year
– Primary cost elements: total amounts in each WBS by
primary cost element by year
– Unit cost planning: objects and quantities in each WBS
by year (e.g., material, service)
– Activity planning: sender cost centres, activity types
and quantities in each WBS by year
57
Key Message(s):

Planning Profile
• To be able to plan a project in the Overall Values
transaction (CJ40), you need to define a planning profile.
• It includes bottom-up planning flag; total or annual
planning; planning years; cost elements, sender cost
centres, activity types and other objects allowed in the
project planning.
– You can also plan a project in the Costs and Activities Input
transaction (CJR2). In this case you need to define layouts
and planner profiles (IMG > Project System > Costs >
Planned Costs > Manual Cost Planning in WBS > Detailed
Planning). This functionality is the same as you have
learned for Overhead Management.
58
Key Message(s):
Planning Profile is assigned to a project profile.

Planning Profile Configuration
Setup required for

detailed planning
Planning Horizon
59
Key Message(s):
For detailed planning, the corresponding master data (cost element group, cost
centre group and activity group) needs to be maintained in the planning profile.
Path: IMG > Project System > Costs > Planned Costs > Manual Cost Planning
in WBS > Hierarchical Cost Planning > Create/Change Planning Profile
(Transaction: OPSB)


Planning
• Refer to System Walkthrough 4.2 – Planning in your
Faculty Guide.
– Project Planning (CJ40)
– Planning Profile (OPSB)
60
Key Message(s):

Exercise 4.2 – Plan Project Costs

• Refer to Exercise 4.2 – Plan Project Costs in your
Participant Workbook.
– Your task is to plan the Packaging Software
Development project using the Overall Values
transaction.
61
Key Message(s):

Questions
62
Key Message(s):

Agenda – Day 4
• Review of Day 3
• Project System
– Introduction
– Planning
– Budgeting
– Execution
– Closing
63
Key Message(s):

Budgeting
• Budget is the approved cost structure for a project.
• It is what the management expects from the project
costs over a period of time.
64
Key Message(s):

Budget Updates
• Supplements (+)
To project
• Returns (-)
• Transfers (+/-)
• Original Budget + Budget $
Updates = Current Budget In project $
From project
65
Key Message(s):

Budget Releases
• In many businesses, distributing a budget is not the same as
releasing the funds.
• For this reason, the Project System includes a separate
funds release facility, which you can use to make successive
budget releases.
• The release is based on the current budget – that is, the
original budget as amended by budget updates.
Current budget Released budget Management
(2007) (2007) strategy
WBS 1 4000 3600 90% (10% contingency)

WBS 2 1200 100 monthly releases
WBS 3 5500 5500 unique release
66
Key Message(s):

Availability Control
• Checks Budget X Actuals.
• Actuals can be checked Limits of
against current or tolerance
exceeded
released budget.
Purchase
Documents
Message
Message + Mail to
responsible
Error
67
Key Message(s):
Tolerance limit can be set up for budget availability control. The system checks the
available amount and displays a message (error/warning) if the tolerance limits are
exceeded.

Budget Profile
• Budget Profile:
– To be able to approve project funds in the system,
you need to define a budget profile.
– It includes overall or annual budgeting, budgeting
years and availability control.
• Limits of tolerance:
– Since you have defined your budget profile, you
have to assign the limits of tolerance for the
availability control to it.
68
Key Message(s):
Budget profile is assigned to a project profile.

Budget Profile Configuration
Activation of
availability control
Budget Horizon
69
Key Message(s):
Path: IMG > Project System > Costs > Budget > Maintain Budget Profiles
(Transaction: OPS9)

Limits of Tolerance Configuration
70
Key Message(s):
Tolerance limits are defined for a budget profile for a controlling area.
Based on usage (in %), the required action, in case of tolerance being exceeded, is
defined.
Path: IMG > Project System > Costs > Budget > Define Tolerance Limits

Key Points
• Availability control is activated when the project is
budgeted (status AVAC is defined at the same time
as status BUDG.)
• It means that until the project is budgeted, the system
will not check any actuals posted to it.
71
Key Message(s):

Key Points (cont.)

• Alternatives to prevent actual postings to the project
before availability control is active:
– Before releasing the project to allow actual postings, go to the
Original Budget transaction (CJ30), insert any amount in any
WBS, click Enter, delete the amount, click Enter again, and click
Save. Your budget is still zero, but statuses BUDG and AVAC
are defined in the WBS elements.
– You can configure a user status profile to prevent WBS elements
from being released before they are budgeted. Logic:
• WBS element is created with an initial user status that does not allow its
release.
• When WBS element is budgeted, user status BUDG is activated, which
allows its release.
72
Key Message(s):

System Status Versus User

Status
System Status User Status
Whenever a Co object is created (for By having a user status, the Co object
example, internal order), the system release could be released as per
assigns a default status to it. It checks business requirement.
for the required input parameters and
will release the object as soon as they
are entered.
The object could be used in all Usage of an Co object could be
business transactions. restricted to selected business
transactions.
73
Key Message(s):

User Status Configuration (1 of 4)
Two user statuses

(CRTD and BUDG)
are set up for this
status profile.
74
Key Message(s):
Status CRTD is set as the initial status.
Status BUDG will substitute CRTD.
Breakdown Structure (WBS) > WBS User Status > Create Status Profile
(Transaction: OK02)


• This status profile is
allowed for WBS
elements.
75
Key Message(s):
Allowed object types are assigned to the status profile.
In this illustration, WBS element is allowed for this Status profile.


• Status CRTD
does not allow
the WBS element
to be released.
76
Key Message(s):
For each status, the allowed/not allowed business transactions are defined.
In this illustration, for status CRTD, the Release transaction is not allowed.


• BUDG is defined
when the WBS is
budgeted.
• Note: The Budget
Release transaction
is not changed; it is
kept as “No
influence.”
77
Key Message(s):


Budgeting
• Refer to System Walkthrough 4.3 – Budgeting in your
Faculty Guide.
– Original Budget (CJ30)
– Budget Updates (CJ36/CJ37)
– Budget Release (CJ32)
– Budget Profile (OPS9)
– Limits of tolerance
– Cost element exemption (OPTK)
– Availability control reconstruction (CJBN)
– Availability control deactivation/ activation (CJBV/CJBW)
– User status (OK02)
78
Key Message(s):

Exercise 4.3a and 4.3b – Allocate

Funds
• Refer to Exercises 4.3a and 4.3 b – Allocate Funds in
your Participant Workbook.
– Your first task (4.3a) is to approve funds to the
Packaging Software Development project via the
Original Budget transaction.
– Your second task (4.3b) is to update the project
budget to reflect changes.
79
Key Message(s):

Questions
80
Key Message(s):

Agenda – Day 4
• Review of Day 3
• Project System
– Introduction
– Planning
– Budgeting
– Execution
– Closing
81
Key Message(s):

Project Release
• To be able to spend money, a project needs to be
released.
• You do this by changing the project status.
• If it is an investment project, some considerations take
place:
– Assets under Construction exist during the project execution and
increase their values as the project is progressing.
– When the project closes, the Assets under Construction become one
or more Fixed Asset.
– The PS module can create AuCs automatically for each account
assignment WBS with an Investment Profile when you release the
project.
– The Investment Profile includes automatic creation of AuCs; AuC
asset class (AuC characteristics in FI-AA).
82
Key Message(s):

Investment Profile Configuration
AUC Managed
In Asset Class,
AuC is set as
“Investment
Measure”
83
Key Message(s):
Path: IMG > Investment Management > Projects as Investment Measures >
Master Data > Define Investment Profile
(Transaction: OITA)

Commitments and Actuals

• Status Released
WBS Element
• AuC created Project funds
Budget
Transactions during
execution Planned Values
Purchase Docs Commitments
Down payment
Actual Values
Invoice
Internal Activity
AuC
Cost planning

84
Key Message(s):


Execution
• Refer to System Walkthrough 4.4 – Execution in
your Faculty Guide.
– Project Release (CJ20N)
– Activity Allocation (KB21N)
– Availability Control (SBWP)
– GL Account Posting (FB50)
85
Key Message(s):

Exercise 4.4 – Record Actual

Costs
• Refer to Exercise 4.4 – Record Actual Costs in your
– Your task is to release the project, check the AuCs
created, and allocate activities to its WBSs. You will
also post an actual cost via an FI transaction to your
project.
86
Key Message(s):

Questions
87
Key Message(s):

Agenda – Day 4
• Review of Day 3
• Project System
– Introduction
– Planning
– Budgeting
– Execution
– Closing
88
Key Message(s):

Settlement
• WBSs are temporary cost collectors, which means
that every cost in the project has to go somewhere
else at the end of each month. You do this via
periodic settlement.
• To be able to settle WBSs periodically, you need to
define a Settlement Profile (IMG > Project System >
Automatic and Periodic Allocations > Settlement >
Settlement Profile). This functionality is the same as
you learned for Overhead Management.
• You also need to define a settlement rule for each
account assignment WBS.
89
Key Message(s):

Settlement (cont.)
• For the investment projects, when AuCs are created
automatically, settlement rules for these AuCs are
also created automatically after the first periodic
settlement.
• When project closes, AuCs’ costs have to be
transferred to the fixed assets. You do this transfer
via final settlement.
• To be able to run the final settlement, you need to
change the project status to TECO (technically
completed). You also need to add a settlement rule
to the fixed asset to each WBS.
90
Key Message(s):

Periodic Settlement
• Settlement Profile WBS EIement
Project funds
Budget
Transactions during
Down payment
Actual Values
Invoice
Internal Activity Periodic settlement
Asset history
AuC sheet
Cost planning

91
Key Message(s):

Final Settlement
• Status TECO WBS Element
Project funds
Budget
Transactions during
Asset 1
settlement
Down payment
Final
Actual Values
Invoice Asset 2
Internal Activity Periodic settlement
AuC Asset 3
Cost planning
Asset history
Planned Values Cost Objects Actual Values sheet
92
Key Message(s):


Closing
• Refer to System Walkthrough 4.5 – Closing in your
Faculty Guide.
– Create Settlement Rule (CJ20N)
– Periodic Settlement (CJ88)
– Create Final Settlement Rule (CJ20N)
– Final Settlement (CJ88)
93
Key Message(s):

Exercise 4.5 – Close Project

• Refer to Exercise 4.5 – Close Project in your
– Your task is to run the last periodic settlement and
then the final settlement.
94
Key Message(s):

Knowledge Check
1. How is the planning horizon for a project
determined?
2. From a planning perspective, what needs to be
setup to have detailed planning for a project –
primary costs, activity type, etc.?
3. How is the budget availability controlled?
4. When the status of the project is set to TECO, what
are the key implications?
95
Key Message (s):

Note to faculty: Refer to the Knowledge Checks section in the Faculty Guide for the
answers to these review questions.

End of Day 4 Q & A
96
Key Message(s):

End of Day 4 Lessons Learned

(1 of 3)
• Profitability Analysis can be used to provide
profitability reports based on market segments.
• Two types of Profitability Analysis – Costing-based
and Account-based
• Operating concern is the organisation structure for
CO-PA. Data structure for CO-PA consists of
characteristics and value fields.
• Characteristics provide the context and value fields
provide content (values) to the reports.
97
Key Message(s):


(2 of 3)
• Project System helps in effective project
management.
• Work breakdown structure provides the structure for
the tasks to be performed in the project.
• WBS elements represent the tasks.
• Project code mask determines the display of project
definitions.
• Projects and WBS elements are assigned to
organisational units like company code, controlling
area, etc.
98
Key Message(s):


(3 of 3)
• Planning profile, budget profile, settlement profile,
investment profile, etc., are maintained in the project
profile to perform these functions.
• Availability control ensures budgetary control (active/
passive controls).
• Person responsible can be assigned to projects/WBS
elements; useful for reporting purposes and mail
intimation during exceptions.
• Periodic/Final settlement enables transfer of values
from WBS element to receiver objects (Cost centre,
assets, etc.).
99
Key Message(s):

SAP CO ECC 6.0 Bootcamp - Day 4

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SAP Controlling (CO)

Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 1

Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 2

Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 3

Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 4

Profitability Analysis Overview

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Profitability Analysis and Profit

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Profitability Accounting Methods

Gross result Total Output

Sales and Distribution costs Total Costs:

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Profitability Accounting Methods

• Emphasis on matching the • Emphasis on summarizing

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Data Flow in Profitability Analysis

CO-Cost Element Accounting Production Sales & Profitability

Profit Centre Accounting

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Parallel Currencies in Profitability

Profit Centre Transaction Company Code Report

Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 12

Organisation Structure in CO-PA

Value fields Product

• Profitability segment: combination of characteristics 13

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Organisation Structure in CO-PA

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Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 15

Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 16

Value Fields (cont.)

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Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 18

Z65412/Z65591 Copyright © 2007 Accenture. All Rights Reserved. 19

Source of Values Fields

CO-PC Cost estimate • Cost of goods manufactured

• Sales & Administration

PS WBS element, network • Research & development

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Key figures/value fields

• Select the desired variables, characteristics and key figures

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Project System Introduction

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Project System – Main

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Project Life Cycle

BUDGETED RELEASED TEC.CLOSED