what is controlling area and cost center
TRANSCRIPT
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How do you set a default cost center and/or internal order
per business area through OKB9?
On 4.6x and above enter the cocd and account and select the account assignment detail field as 2
(Business area is mandatory).
Select the line you just entered and click on the left side of your screen "detail per businessarea/valuation area".
What is Controlling Area and Cost Center?
Before I go to explain what a Cost Center is all about,lets see
What Controlling is all about?
Controlling precedes CCA
The controlling area is the highest organizational level within CO. It must exist before Cost
Center Accounting (CCA) can be used. A controlling area will be created on a one-to-one basiswith the company code created in FI. This does not facilitate cross-company code accounting in
CO. In order to facilitate cross-company code accounting, more than one company code isusually assigned to the controlling area.
Note the difference between cross-company code accounting and intercompany accounting.
Cross-company code accounting involves the allocation of costs across cost centers (or
responsibility centers) existing in different company codes within CO. Intercompany accounting
involves the recording of intercompany receivables and payables in FI.
There are several factors considered when determining whether one or more controlling areas
will be used. The major factors considered are whether cross-company code accounting is
desired, and whether more than one chart of accounts is needed at the controlling area level. Inaddition, currency issues may also be considered.
Step 1 : Create Controlling Area:
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Menu Path
IMG:Controlling > General Controlling > Organization >
Maintain Controlling Area T-Code : OKKP
On the "Choose Activity" pop-up window select the activity "Maintain Controlling Area" by
double clicking on the corresponding line.
On the Change View Basic data: Overview screen: Click on the <New entries> button.
On the "New Entries: Details of Added Entries" screen: Click on the <COArea = Ccode> button
On the resulting Pop-up, enter your Company CodeHit <Enter> to return to the main screen.
Note that the selection of this option has brought in a large number of Company default values to
the input screen.
·CoCd -> CO area choose "Controlling area same as company code" from the pull-downmenu(click on the little icon at the very end of the row).
·CCtr std. Hierarchy STD_01 (say)
Hit <Enter> to have SAP check the entry.
A pop-up box will come up with Standard Hierarchy STD_01 does not exist. Should systemSTD_01 be created as a standard hierarchy
Click <Yes> to have the hierarchy created.
Click on the <Save> button to complete the transaction and return to the previous screen
On the Change View Basic data: Overview screen:
Select the line containing the newly create CO area
Double click on the "Activate components/control indicators" line (in the window on your right)
On the Change View Activate components/ control indicators
Details screen, enter:
Click on the <New Entries> button
· Fiscal year from Current year · Cost Centers Component active (choose from the pull-down menu)Other components will be activated in later exercises
· Select "Cost objects" by clicking on the check box
· Select "All currencies" by clicking on the check box (it may already be checked by default).[Enables Controlling for all currencies]
· Select "Variances" by clicking on the check box
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Click on the <Save> icon to complete the transaction
Click on the <Back> button to return to the previous screen
Note: You are also able to set Cost Center Accounting active and specify the respective settings
through the following menu path: IMG > Controlling > Cost Center Accounting > Activate Cost
Center Accounting in Controlling Area.
On the Change View Basic data Overview screen:
Double click on the "Assignment of company code(s)" line (in the window on your right)
Click on <New entries> icon.Enter your company code or select it from the pull-down menu and hit <Enter>. The system adds
the
company name
Verify that the correct company code is pulled into the table.Click <Save> to complete the transaction.
Go back to the IMG.
Step : 2 : Maintain Number Ranges
In CO, number ranges can be assigned to groups. This makes the process of creating number
ranges more efficient by allowing several types of transactions to use the same number range.
IMG:Controlling > General Controlling > Organization > Maintain Number Ranges for
Controlling
Documents T-Code : KANK
Now you need to define the Number Ranges for transaction group Useg values should for the
FOUR groups for which number ranges will be assigned:
Text for Group Name From To Current
Number Number Number
Planning TransactionActual Transactions
Periodic Postings
Interface
On the Number Ranges for CO Document screen, enter:·Controlling Area your controlling area
Click on the <Maintain Groups> button
On the Maintain Number Range Groups screen:
Scroll down and ensure that all available CO transactions are listed as Not assigned
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Use the Menu Path: Group > Insert
On the Insert Group Pop-up window:
Enter the data for a Group from the Data parameters table aboveHit <Enter> after filling the data fields in the Pop-Up
Repeat this block of instructions until all FOUR groups have numbers assigned
Now Assign transaction types to each Group
To complete this , the following values should be used for the FOUR groups for whichtransactions types are to be assigned:
Planning Actual Transaction Periodic Interface
Transaction Transaction Posting
On the Maintain Number Range Groups screen:Move to the area of Not assigned transactions
Double click on a targeted transaction to be selected. It will change color once selected.
Select all of the transactions to be assigned to a given group.Move to the area listing the Groups.
Click on the <Check> box for the group to which the transactions are to be assigned.
Click on the <Element/Group> icon on the toolbar to make the assignment.
Repeat this block of instructions until all FOUR groups have had their transactions assigned.Click on the <Save> icon to complete the transaction and exit.
After the above go to Cost center Accounting
What's a Cost Center ?
They are buckets where costs can be captured ie an organizational unit wherein it defines thelocation of cost incurrence.
Now you go to Master Data and create the following :
1. Cost Center Hierarchies:
>Standard Hierarchy
Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > StandardHierarchy >
Change
>Functional Cost Center Group
2.Cost Centers
>For Production, Process, and Non-Production etcMenu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Cost Center >
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Individual Processing > Create
Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Cost Center
Group > Create
3.Primary Cost Elements:
>By definition, must correspond to previously established G/L expense accounts.Primary cost elements in CO mirror P&L accounts set up in the FI module (general ledger). They
are used as the vehicle to transfer costs from the FI module into CO. If there is no primary costelement set up for a specific P&L account on the general ledger, the costs will not flow to CO.
For this reason, in practice, all P&L accounts on the general ledger are usually set up as primary
cost elements in CO.
IMG:Controlling > Cost Element Accounting > Master Data > Cost Elements > AutomaticCreation of Primary and Secondary Cost Elements > Make Default Settings
4.Secondary Cost Elements:>Primary for allocation
Secondary cost elements do not necessarily mirror G/L accounts created in FI. They are createdand used solely in the CO module to facilitate the movement of costs within CO (allocation,
settement, etc.).
Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Cost Element >Individual Processing > Create Secondary
5.Activity Types:
Activity types represent cost drivers in CO. They can be used as a basis for cost allocations
within the CO module.
Menu Path:Accounting > Controlling > Cost Center Accounting > Master Data > Activity Type> Individual Processing > Create
See Activity groups also
6.Statistical Key Figures:
> say Number of employees> Square meters if you want to allocate say floor space
Statistical key figures represent static data in the CO module. They can be used as a basis for
moving costs in CO (allocations, etc.) when actual data or activity type data is not available or too difficult to obtain.
Menu Path:Accounting > Controlling > Cost Centers > Master Data > Stat. Key Figures >Individual Processing > Create
see Statistical Key figure groups also.
Fiscal year and controlling area
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Can I have a company code with fiscal year january to december and another company
code with fiscal year april to march in the same controlling area?
If so, does the period "mapping" happen automatically?
As per Sap standards, if one has to assign more than one company code to a controlling area,then for all the company codes should have the same fiscal year and the same chart of accounts.
One cannot assign more than one company code to a controlling area with different fiscal year.