Post on 02-Jun-2018
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verhead Cost Controlling
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Objectives
To gain understanding of key business processes of SAP Overhead
Cost Management (OCM)
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SAP verview
SAP Overhead Cost Management
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SAP Modules - Overview
Sales !istribution
SD
MM
PP
QM
PM
HR
FI
CO
AM
PS
OC
IS
MaterialsMgmt"
Product
Planning
#ualityMgmt"
Plant Maint"
$uman%esources
&inancialAccounting
Controlling
&i'ed Asset
Mgmt"
ProectSystem
Office Comm"
ndustrySolutions
SAP R/3
OverheadCost
Management
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Correlations in Accounting
SAP SEM / SAP BW
Docment Data!ase
Conso"#dat#on
$endor
Cstomer
Hman
Resorces
F#%ed
Assets
Mater#a"
S!s#d#ar&'edger General
Ledger
Cash Management Cash management
(os#t#on '#)#d#t& *orecast
S(ec#a" Pr(ose
'edger S(ec#a" eva"at#ons Para""e" re(ort#ng +o#nt $entre
Accont#ng
Contro""#ng Cost center
Interna" order Pro,ect s&stem Pro*#ta!#"#t& ana"&s#s Pro*#t Center
Accont#ng
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C Components
Pro*#ta!#"#t& Ana"&s#s
Pro*#ta!#"#t& Ana"&s#s
Pro*#tCenterAc
cont#n
g
Hman
Resorces
F#nanc#a"
Accont#ng
FI
S-D
Sa"es andMater#a"s
Management
Mater#a"s
Management
COCO
PAPA
COCO
OMOM
ECEC-
PCAPCA
D#str#!t#on
Cost E"ement Accont#ng
COCO
CE'CE'
HR MM SD
F#nanc#a"
Accont#ng
Cost E"ement Accont#ng
Cost centers Interna"orders
Pro*#ta!#"#t&
segment
Asset RevenesE%(ense
Act#v#t&
t&(es
Interna" Orders
Com(an& Code .011 A 'td2 11 A0 'td4
O(erat#ng concern .011 5 A gro(4
Overhead Cost Contro""#ng Prodct Cost
Contro""#ng
Standard
Cost Est#mate
CO Prodct#on
Order
Contro""#ng area .011 5 A gro(4
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verhead Cost Management
The Overhead Cost Controlling component (CO*OM) helps you to
plan+ allocate+ control+ and monitor overhead in your organi,ation -y planning in overhead areas+ you can develop standards+ that allo.
you to control costs and valuate internal activities"
Cost Centre Accounting
Cost Center Accounting analy,es .here overhead occurs .ithin the
organi,ationCosts are assigned to the sub*areas of the organi,ation .here they originated"
SAP offers a .ide variety of methods for allocating posted amounts and
/uantities"
nternal Order Accounting
nternal Orders collect and analy,e costs based on individual internal obs"
SAP can monitor and automatically check budgets assigned to each ob"
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verhead Cost Management
Cost E"ement Accont#ng Cost Center Accont#ng
nternal Orders
Cost E"ements
Reconc#"at#on 6#th FI
H#erarch#es
Cost Centers
Stat7 8e& F#gres
Act#v#t& 9&(es
Interna" Orders
Orders
Resorce P"ann#ng
M"t#("e Crrenc&
M"t#("e $a"at#on
Ana"&:e o* P"an/
9arget/Acta" Costs
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CM Processes
SAP Overhead Cost Management
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CM Process verview
Process decompositions are the starting
point for process documentation" They summarise .hat is involved in the
OCM process at a high level
PlanningMaster
Data
Cost CentreAccounting
Actual
Posting
Period End
Closing
Reporting
Controlling
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PlanningMaster
Data
Actual
Posting
Period End
Closing
Reporting
CM Processes
Planningpreparation
Cost CentrePlanning
nternal OrderPlanning
Plan costdistribution
Plan costassessment
Plan directactivity allocation
Plan indirect
activity allocation Plan settlement
of overhead costorders
Other planningactivities
%eposting Actual Cost
distribution Actual Cost
Assessment Cost Splitting Calculate Actual
Activity Prices Settlement of
Overhead Orders Manual Cost
Allocation &CO
%econciliation
Cost 0lement Cost Centre Activity Type %esource
Statistical 1ey&igures nternal order 2roups
Manual entries S1& entry !irect activity
allocation
ndirect activityallocation Order budget
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Master Data
SAP Overhead Cost Management
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rganiational !nits " Master Data
A0 'td
11
A 'td
011
HQ
0111
Cost Centers Prchas#ng03;
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Cost #lement
!escriptionA cost element classifies the organi,ation3s valuated
consumption of production factors .ithin a controlling area
Pr#mar& E"ement* costs that originate outside the
company4 relate directly to the income statement in & and
must be included in the & Chart of Accounts
Secondar& E"ement* costs that result from internal
allocation activities4 5O relation to 267 accounts in &"
These accounts are e'clusively for cost accounting and are
only maintained in CO
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F#nanc#a"
Accont#ng
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Cost Centre
!escription Organi,ational unit .ithin a controlling area that represents
a defined location of cost incurrence" The definition can bebased on8
&unctional re/uirements
Allocation criteriaPhysical location
%esponsibility for costs !efines the smallest area of responsibility .ithin the
company that causes and influences costs4 the lo.est levelto .hich you can meaningfully assign direct and indirectcosts
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Cost Centre Standard $ierarch%
%%10 Prodct#on
%%1 Ma#ntenance
%%13 t#"#t#es
%%1= 5 Eng#neer#ng - Pro,ects
%%1? 5 Qa"#t& Assrance
%%1@ 5 Prodct#on P"ann#ng
%%1 5 Prodct#on Hand"#ng
%%1 5Warehos#ng - Storage
%%1 5E%ect#ve O**#ce
%%01 F#nance
%%00 5 Hman Resorces
%%0 5 In*ormat#on 9echno"og&%%03 Prchas#ng
%%0= 5 et#ng
%%0 5 Research - 9echno"og&
%%0 5 Com(an&
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Activit% &%pe
!escription 9nit in a controlling area that classifies the activities performed in a cost
centre+ e"g" maintenance hours for a maintenance cost centre
9sed in activity allocation process
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Statistical 'e% (igure
!escription 9sed to track /uantities and values for various operating activities
!esigned to be used in reporting and analysis
9sed to assist in the allocation of costs throughout the OCM
environment
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)nternal rder
!escription 9sed to plan+ collect and settle the costs of internal obs and tasks"
nternal orders are categori,ed as either8
Orders used purely to monitor obects .ithin Cost Accounting (such as
advertising+ training+ or trade fair orders) and
Productive orders that are value*added+ that is+ orders that can be
capitali,ed (such as in*house construction of an assembly line)"
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Groups
!escriptionOCM master data can be grouped together+ for e'ample
Cost Centre 2roups
Cost 0lement 2roups
Activity Type 2roups
Statistical 1ey &igure groups
nternal Order 2roups
Master data groups are used in reporting+ planning+allocation+ etc"
:ou can divide comple' groups into manageable sections
by separating them into sub*groups :ou can create and maintain sub*groups separately and
then combine them in larger groups
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Actual Posting
SAP Overhead Cost Management
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Manual #ntries
!escription Actual cost entry enables you to monitor and trace costs incurred by
your company as they arise" This allo.s you to identify variances
/uickly and take appropriate action to deal .ith them"
Actual cost entry involves transferring the (r#mar& costsrecorded in
&inancial Accounting (&) to the Controlling (CO) application
component" n the CO component+ this transfer occurs real*time from
the components &+ MM+ and AM+ .hereby a cost accounting obect is
recorded during account assignment
Process
ncorporated into other processes+ e"g" & ;ournal 0ntry+ 2oods ssue+etc
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Manual #ntries
Primary postings include the follo.ing transactions
Payroll Material 9sage
Travel
Purchase %e/uisition 6 Purchase Order 6 2oods %eceipt 6 nvoice
nter 6 ntra Accounting ;ournals
!epreciation
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Manual #ntries
SAP SEM / SAP BW
Docment Data!ase
Conso"#dat#on
$endor
Cstomer
Hman
Resorces
F#%ed
Assets
Mater#a"
S!s#d#ar&'edger General
Ledger
Cash Management Cash management
(os#t#on '#)#d#t& *orecast
S(ec#a" Pr(ose
'edger S(ec#a" eva"at#ons Para""e" re(ort#ng +o#nt $entre
Accont#ng
Contro""#ng Cost center Interna" order Pro,ect s&stem Pro*#ta!#"#t& ana"&s#s Pro*#t Center
Accont#ng
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Statistical 'e% (igure #ntr%
S1&
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Direct Activit% Allocation
!escription !irect activity allocation involves the measuring+ recording+ and
allocating of business services performed Activity types are used as the cost drivers Activity allocation occurs+ for e'ample+ .hen business transactions are
confirmed or .hen posting activity /uantities to accounts+ eg Plant
Maintenance $our+ Production $ours+ 9tilities+ etc The system multiplies the activity produced by the price of the activity
type" Activity types are planned using prices set manually or using SAP
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)ndirect Activit% Allocation
!escription AA is a method of allocating actual and plan costs using activity
/uantities as the basis" AA is e'tremely beneficial .hen calculating the
activity /uantities on the sender involves too much time or e'pense"
The value can be calculated inversely based on the activity /uantities
actually consumed or planned on the receivers
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)nternal rder *udgets
!escription The budget is the approved cost limit for an internal order
The budget is the limit set by management for internal order costs over
a certain period of time
-udgets have the follo.ing components
Original -udget
Supplements
%eturns
Transfers
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Period #nd Closing
SAP Overhead Cost Management
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+eposting
:ou can repost primary costs manually using transaction*based
repostings+ .hereby the original cost element is al.ays retained" Thisfunction is designed mainly to adust posting errors"
:ou should al.ays adust posting errors in the application component
.here they occurred" This ensures that & and CO are al.ays
reconciled
:ou can only adust posting errors involving one cost accounting obect(a cost center or internal order for e'ample) using a transaction*based
reposting in Controlling (CO)"
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Prodct Cost#ng
Pro,ect
A group Allocation Model
Cost Centre Accont#ng
Com(an&
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Allocations - Description
T.o types of allocations8
!istribution
The follo.ing information is passed on to the receivers8
The original+ primary+ cost element is retained"
Sender and receiver information is documented .ith line items in
the CO documentAssessment
The follo.ing information is passed on to the receivers8
The original cost elements are grouped together into assessment
cost elements (secondary cost elements)" The original cost
elements are not displayed on the receivers"
Sender and receiver information is displayed in the CO document
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Distribution
Com(an&
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Assessment
Com(an&
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Cost Splitting
Actual cost splitting makes it possible to divide costs into fi'ed and
variable portions The actual costs are split in t.o stages8
n the first splitting step+ the system distributes actual costs by cost
element to the activity types based on the target costs or target
/uantities
n the second splitting step+ the actual costs are distributed on theactivity types according to splitting rules" f you have not defined
any splitting rules for a cost center+ the system splits actual costs
based on the e/uivalence numbers for the activity types"
t is only in this .ay that you can compare the actual costs .ith the
target costs of the activity types and display the variances by activitytype"
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Calculate Actual Activit% Prices
!uring actual price calculation+ the system calculates iterative prices for
activity types or business processes based on actual costs and actualactivities" The calculation takes into account all activity e'changesbet.een cost centres or business processes"
Price calculation+ .hich you can carry out during planning+ is based onplanned costs and activity" The resulting prices are used to valuateactual activity"
After running actual price calculation+ you can choose to revalue actualactivity at actual prices" This revaluates the activity using the differencebet.een plan and actual prices" -y revaluing the actual activity .ithactual prices+ you can fully balance sender cost centres and senderbusiness processes"
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Settlement o, verhead Cost rders
Some or all of the plan and actual costs incurred on an obect are
allocated to one or more receivers" System automatically generates offsetting entries to credit the sender
obect" The debit postings assigned to a sender obect remain in placeeven after settlement to a receiver
T.o types8 Periodic = 0very period
&ull = After completion
T.o methods8 ndividual
-y individual sender obect
Allo.s to analy,e in greater detail
CollectiveProcesses a large number of sender obects
9sed during period*end closing activities
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F#%ed Asset
Settlement o, verhead Cost rders
Overhead Cost Order
Mater#a"s 011
Sta** Sa"ar#es 11
Rent - Rates
$eh#c"es
Re(a#rs
9rave""#ng 1
Hote"s 31
Com(an&
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Manual Cost Allocation
Manual cost allocation involves posting secondary costs manually" The
system credits a sender obect (for e'ample+ a cost center) and debits areceiver obect (for e'ample+ an order)
:ou can use manual allocation to8
Avoid the need for complicated Customi,ing settings for simple
allocations
Manually transfer e'ternal data Make simple adustments to incorrect secondary postings"
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()C +econciliation
The reconciliation ledger is a tool used to portray transaction figures in
Controlling in a summari,ed form t provides reports .ith .hich you can monitor the CO6& reconciliation
for each account
t can determine and display value flo.s that .ere posted in CO across
company codes and functional areas
0ach company code in & represents an independent accounting unitfor .hich a balance sheet must be created" !ata flo.s bet.een
company codes must be posted separately so that no information is
lost" These boundaries are not relevant for Controlling (CO)"
:ou can use reconciliation postings to transfer cross*company code+ or
cross*functional area postings made in CO that are relevant to &+ andto automatically create reconciliation postings there
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Month.ear end Closing - Process Map/012
SAP 0nabled
Processes
0lectronic
ProcessesSAP +o! Ro"e
Adustnventory >
27 !oc" entry
9
%evie. correct
bil ling errors
3
%elease the
payroll
*?
0nsure payroll
Are posted
27 n/uiry
4
0nsure settlement depreciation
Are posted%un !epreciation
Close the period
for AP A%
Close PostingPeriod
0nter ournalvoucher >
27 !oc" entry
8 10 00Close the period
for MM
Close PostingPeriod
7
AP !isbursement
*@
Cash Out*
&i'ed AssetB-S Settlement
*
&i'ed Asset
%un !epreciation
*@D
Send the monthly
Schedule manager7ogistics
1
Ackno.ledgeSchedule manager
TreasuryactivitiesTreasury
@SimultaneousCosting >
7ogistics
?
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Month.ear end Closing - Process Map/112
SAP 0nabled
Processes
0lectronic
ProcessesSAP +o! Ro"e
0'ecute
Assessment
CycleAllocations
21
%un the
%econciliation7edger
%ec" CO .ith &
22
&inal Close
Of 27Close Posting
Period
23
2eneratedfinancial reports
27 %eporting
24
TemporallyClose 27
Close PostingPeriod
17
End
%un the foreign
Currency valuation >
27 PeriodicProcessing
Complete the
electronic bank
reconciliation >
Carryfor.ard
balances >
Periodic Pro"
0? 0@
?
2enerate a
Preliminary
financial report27 %eporting
18
9pdate materials
prices >Pricing
0=!etermine the7o.est value
Principle >Pricing
13
Product Costing >7ogistics
Material 7edger6Actual Costing >
7ogistics
19 20
Close thePeriod for &A
Close PostingPeriod
12
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+eporting
SAP Overhead Cost Management
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CM +eporting
Comprehensive+ fle'ible information system to analy,e cost flo.s
Carry out standard recurring evaluations Construct special reports for uni/ue situations
Analyse all costs online and trace them right back to the original
document
0'ecute all reports available online in background runs as .ell (helpful
for large amounts of data)
&or hierarchically grouped obects+ such as cost centers+ you can
create separate reports for all hierarchy nodes and individual obects+ or
you can create all the relevant reports in a single selection run through
the database
The second option allo.s you to navigate .ithin a hierarchy" This
enables particularly fle'ible monitoring of cost center areas
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CM +eporting
ABAP '#stv#e6erRe(ort#ng
CO Smmar#:at#onRe(ort#ng
Formatted Re(ort#ng6#th Re(ortWr#ter
Dr#"" Do6n Re(ort#ng
9arget/Acta" Com(ar#sons2$ar#ances
S((ort o* the P"ann#ng Process
Assessment C&c"es2 9arget Costs
Reconc#"#at#on Re(orts to "oo>*or Post#ng Anoma"#es
Standard#:ed / F"e%#!"e CostAna"&s#s o* Cost O!,ects
Chec> o* Data Cons#stenc&
R/3Re(ort#ng*or OCM
9oo" O**ers Set o*
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CM +eporting Menu Path 3
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CM Sample +eport Selection Criteria 3
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+oles
SAP Overhead Cost Management
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CM +oles
Master !ata Management
Master data role is assigned to an individual .ho is responsible for changesand maintenance of OCM master data" This role is to be centrali,ed" OCM
Master !ata are8
Cost Center and 2roups
Cost 0lements and 2roups
nternal Orders Maintenance
nternal order maintenance is assigned to an individual .ho is responsible
for creation+ changes and maintenance of internal order status
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CM +oles continued 3
Plan Settings
Plan setting maintenance is assigned to senior individual .ho isresponsible for redefinition of plan version+ maintain distribution keys etc
Primary Cost Planning
Primary cost planning is assigned to an individual .ho is responsible for
planning primary cost+ copy from plan and actual+ plan transfer from other
modules and plan revaluation Secondary Cost Planning
Secondary cost planning is assigned to an individual .ho is responsible for
planning cost allocation
nternal Order -udget Maintenance
Order budget maintain is assigned to an individual .ho is responsible forthe maintenance of ne. budget in*out+ supplement" Transfer from other
modules and plan revaluation
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CM +oles
Actual Postings
Actual posting is assigned to individual .ho is responsible for the actualS1& data entry+ posting manual entries+ direct6indirect activity allocation
and reservations
Allocation Settings Maintenance
$igh level of individual .ho decide to Create or change allocation cycles in
the system*Configuration process Period 6 :ear 0nd Closing
Period*end closing is assigned to individual .ho is responsible for carry on
necessary cost reposting+ distribution+ allocation+ settlement+ &6CO
reconciliation and period look
%eporting !isplay
%eporting is assigned to an individual .ho is trained to access+ use+ and
interpret OCM reports
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CM +ole to Process Mapping
Process
Ro"e
MasterData
P"ann#ng Acta"Post#ng
Per#od EndC"os#ng
Re(ort#ng
Master Data Ma#ntenance
Interna" Order Ma#ntenance
P"an Sett#ngs
Pr#mar& Cost P"ann#ng
Secondar& Cost P"ann#ng
Interna" Order BdgetMa#ntenance
Acta" Post#ngs
A""ocat#on Sett#ng Ma#ntenance
Per#od / ear End Re(ort#ng
Re(ort#ng D#s("a&