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SYSTEM DOCUMENT

PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

CONFIGURATION DOCUMENT FOR CONTROLLING


CONTROLLING____________________________________________________________________________4
1.

General Controlling____________________________________________________________________5
1.1 Organization__________________________________________________________________________5
1.1.1Maintain Controlling Area____________________________________________________________5
1.1.2Maintain Number Ranges for Controlling Documents______________________________________6
1.1.3Maintain Versions___________________________________________________________________9
1.2 Account Assignment Logic______________________________________________________________10
1.2.1Define Validation__________________________________________________________________10

2.

Cost Element Accounting_______________________________________________________________11


2.1 Master Data__________________________________________________________________________12
2.1.1 Cost Elements____________________________________________________________________12
2.1.1.1 Automatic Creation of Primary and Secondary Cost Elements____________________________________12
2.1.1.1.1 Make Default Settings_______________________________________________________________12
2.1.1.1.2 Create Batch Input Session___________________________________________________________13
2.1.1.1.3 Execute Batch Input Session__________________________________________________________13
2.1.1.2 Create Cost Elements____________________________________________________________________13
2.1.1.3 Create Cost Element Groups______________________________________________________________13

2.2 Reconciliation Ledger__________________________________________________________________15


2.2.1Activate Reconciliation Ledger_______________________________________________________15
2.2.2Maintain Adjustment Accounts for Reconciliation Posting__________________________________15
2.2.3Specify Document Number Range for Reconciliation Posting________________________________16
2.3 Information System____________________________________________________________________16
2.3.1Maintain Cost Element Groups_______________________________________________________16
2.3.2Standard Reports__________________________________________________________________16
2.3.2.1 Import Standard Reports_________________________________________________________________16
2.3.2.2 Generate Standard Reports________________________________________________________________16

3.

Cost Center Accounting________________________________________________________________17


3.1 Activate Cost Center Accounting in Controlling Area_________________________________________17
3.2 Master Data__________________________________________________________________________18
3.2.1Cost Centers______________________________________________________________________18
3.2.1.1 Maintain Standard Hierarchy______________________________________________________________18
3.2.1.2 Maintain Cost Center Categories___________________________________________________________19
3.2.1.3 Define List Variants for Group Processing____________________________________________________19
3.2.1.4 Create Cost Centers_____________________________________________________________________19
3.2.1.5 Maintain Cost Center Groups______________________________________________________________19
3.2.1.6 Define Search Helps for Cost Centers_______________________________________________________21

3.2.2 Activity Types_____________________________________________________________________21


3.2.2.1 Maintain Cost Elements for Activity Allocation_______________________________________________23
3.2.2.2 Create Activity Types____________________________________________________________________24
3.2.2.3 Maintain Activity Type Groups____________________________________________________________24
3.2.2.4 Define Search Helps for Activity Types______________________________________________________25

3.2.3Statistical Key Figures______________________________________________________________25


3.2.3.3 Maintain Statistical Key Figures___________________________________________________________25

3.3 Planning_____________________________________________________________________________25
3.3.1 Basic Settings____________________________________________________________________26
3.3.1.1 Maintain Exchange Rate Types____________________________________________________________26
3.3.1.2 Define Exchange Rates__________________________________________________________________26
3.3.1.3 Maintain Versions_______________________________________________________________________26

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

3.3.2 Group Maintenance________________________________________________________________27


3.3.2.1 Maintain Cost Element Groups____________________________________________________________27
3.3.2.2 Maintain Cost Center Groups______________________________________________________________28
3.3.3.3 Maintain Activity Type Groups____________________________________________________________30

3.4 Period-End Closing____________________________________________________________________31


3.4.1 Distribution______________________________________________________________________31
3.4.1.1 Specify Receiver Types for Distribution_____________________________________________________31

3.4.2 Assessment_______________________________________________________________________31
4.

Internal Orders_______________________________________________________________________32
4.1 Order Master Data_____________________________________________________________________32
4.1.1 Define Order Types________________________________________________________________32
4.1.2 Maintain Number Ranges for Orders__________________________________________________33

5.

Product Cost Controlling_______________________________________________________________34


5.1 Product Cost Planning__________________________________________________________________34
5.1.1 Basic Settings for Material Costing___________________________________________________34
5.1.1.1 Define Cost Components_________________________________________________________________34

5.1.2 Material Cost Estimate with Quantity Structure__________________________________________36


5.1.2.1 Define Costing Variants__________________________________________________________________36
5.1.2.2 Costing Variant: Components______________________________________________________________37
5.1.2.2.1 Define Costing Types________________________________________________________________37
5.1.2.2.2 Define Valuation Variants____________________________________________________________38
5.1.2.2.3 Define Date Control_________________________________________________________________38
5.1.2.2.4 Define Quantity Structure Control______________________________________________________39

5.2 Cost Object Controlling_________________________________________________________________40


5.2.1 Product Cost by Order_____________________________________________________________40
5.2.1.1 Manufacturing Orders___________________________________________________________________40
5.2.1.1.1 Check Costing Variants for Manufacturing Orders (PP)_____________________________________40
5.2.1.1.2 Check Valuation Variants for Manufacturing Orders (PP)____________________________________41
5.2.1.1.3 Check Order Types__________________________________________________________________41
5.2.1.1.4 Define Cost-Accounting-Relevant Default Values for Order Type_____________________________41
5.2.1.2 Define Goods Received Valuation for Order Delivery___________________________________________42
5.2.1.3 Period-End Closing_____________________________________________________________________42
5.2.1.3.1 Work in Process____________________________________________________________________43
5.2.1.3.1.1 Define Results Analysis Keys_____________________________________________________43
5.2.1.3.1.2 Define Results Analysis Versions__________________________________________________43
5.2.1.3.1.3 Define Valuation Method (Actual Costs)_____________________________________________44
5.2.1.3.1.4 Define Line IDs_______________________________________________________________45
5.2.1.3.1.5 Define Assignment_____________________________________________________________45
5.2.1.3.1.6 Define Posting Rules for Settling Work in Process_____________________________________46
5.2.1.3.2 Variance Calculation________________________________________________________________47
5.2.1.3.2.1 Define Variance Keys___________________________________________________________47
5.2.1.3.2.2 Define Default Variance Keys for Plants_____________________________________________47
5.2.1.3.2.3 Check Variance Variants_________________________________________________________47
5.2.1.3.2.4 Define Target Cost Versions______________________________________________________49
5.2.1.3.3 Settlement_________________________________________________________________________49
5.2.1.3.3.1 Create Settlement Profile_________________________________________________________50
5.2.1.3.3.1 Create Allocation Structure_______________________________________________________51

6.

Profitability Analysis__________________________________________________________________52
6.1 Structures____________________________________________________________________________52
6.1.1 Define Operating Concern__________________________________________________________52
6.1.1.1 Maintain Characteristics__________________________________________________________________53

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.1.1.2 Maintain Value Fields____________________________________________________________________54


6.1.1.3 Maintain Operating Concern______________________________________________________________56

6.2 Master Data__________________________________________________________________________57


6.2.1 Characteristic Values______________________________________________________________57
6.2.1.1. Maintain Characteristic Values____________________________________________________________57
6.2.1.2 Define Characteristics Hierarchies__________________________________________________________57

6.2.2 Define Characteristic Derivation_____________________________________________________57


6.2.3 Valuation________________________________________________________________________58
6.2.3.1 Valuation Strategies_____________________________________________________________________58
6.2.3.1.1 Define and Assign Valuation Strategy___________________________________________________59
6.2.3.2 Set Up Valuation Using Material Cost Estimates_______________________________________________59
6.2.3.2.1 Define Keys for Accessing Material Cost Estimates________________________________________59
6.2.3.2.2 Assign Costing Keys to Material Types__________________________________________________60
6.2.3.2.3 Assign Value Fields_________________________________________________________________60
6.2.3.3 Define Conditions and Costing Sheets_______________________________________________________61
6.2.3.3.1 Define Condition Tables_____________________________________________________________62
6.2.3.3.2 Define Access Sequences_____________________________________________________________62
6.2.3.3.3.Create Condition Types and Costing Sheets______________________________________________62
6.2.3.3.4 Assign Value Fields_________________________________________________________________63

6.3 Planning_____________________________________________________________________________63
6.3.1 Initial Steps______________________________________________________________________64
6.3.1.1 Define Number Ranges for Planning Data____________________________________________________64
6.3.1.2 Maintain Versions_______________________________________________________________________65
6.3.1.3 Assign Quantity Fields___________________________________________________________________65

6.3.2 Manual Planning__________________________________________________________________66


6.3.2.1 Prepare Initial Planning Screen____________________________________________________________66
6.3.2.2 Define Planning Layout__________________________________________________________________66

6.3.3 Integrated Planning________________________________________________________________67


6.3.3.1 Transfer Cost Center Planning/Process Planning_______________________________________________68
6.3.3.1.1 Initial Steps__________________________________________________________________________68
6.3.3.1.1.1 Assign Receiver Plan Version________________________________________________________68
6.3.3.1.2 Assess Cost Center Costs / Process Costs________________________________________________69
6.3.3.1.2.1 Define Structure of Cost Center Assessment/Process Cost_______________________________69
6.3.3.2 Define LIS Interface_____________________________________________________________________69

6.4 Flows of Actual Values_________________________________________________________________71


6.4.1 Initial Steps______________________________________________________________________72
6.4.1.1 Define Number Ranges for Actual Postings___________________________________________________72

6.4.2 Transfer of Billing Documents_______________________________________________________72


6.4.2.1 Assign Value Fields_____________________________________________________________________73
6.4.2.2 Assign Quantity Fields___________________________________________________________________75

6.5 Information System____________________________________________________________________75

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

CONTROLLING
Controlling provides you with information for management decision-making; the main task of
controlling is planning. It helps to determine variance by comparing actual data with plan
data.
These variance calculations enable you to control business flows.
Controlling derives data from other Modules such as FI, MM, SD, PM, PS, HR etc. at the
same time these costs and revenues are assigned to different CO account assignment object
such as cost centers, business processes, projects or orders.
At HHML the following CO modules are active:
1
2
3
3.a
3.b
4
4.a
4.b

Cost Element Accounting


Cost Centre Accounting
Product Cost Controlling
With Quantity Structure
Order Based
Profitability Analysis
Account based PA - Active
Costing based PA - Active

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

1. General Controlling
Configuration
Controlling > General Controlling
SAP standard settings copied to HHML and changes made in respective areas, wherever
mentioned.

1.1 Organization
Controlling > General Controlling > Organisation
Controlling Area "HHML" is assigned to "HHML" Company Code.
Defaults settings of number ranges are were copied to Controlling Area HHML.

1.1.1

Maintain Controlling Area

Controlling > General Controlling > Organisation > Maintain Controlling Area
The cost accounting system uses controlling area as an organizational unit. Controlling Area
delimits the companys managerial accounting operations. Organization structure is replicated
in the controlling system. The company code and controlling area can use independent chart
of accounts, currency & business area.
Cost centers, internal orders, product hierarchy and profit centers /profitability segments are
used to classify the controlling area. All inter organizational allocations refers to objects
within the same controlling area. Multiple Company Codes can get assigned to a Controlling
Area.
HHML Controlling Area is above company code- HHML and this could enable assigning
other associate companies in future to Controlling Area-HHML.
The following settings are made at HHML
Controlling area
Fiscal year

HHML (HHML Controlling Area)


2000 to 9999

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Modules active: Cost centers


Order management
Commitments mgt
Profitability Analysis
Activity-Based Costing
Profit center
Projects
Sales Orders
S. O. with Commitment mgmt
Cost objects
Real estate mgmt

Component active
Component active
Component not active
Component active for
Profitability Analysis
Component not active
Component not active
Component not active
Component active
Component not active
Component active
Component not active

both

Indicator to activate calculation with variances is ACTIVE


1.1.2

Maintain Number Ranges for Controlling Documents

Controlling > General Controlling > Organisation > Maintain Number Range
Number range object
Controlling area

CO Document
HHML

Number range interval: From number


0100000000
0200000000
0300000000
0400000000

To number
0199999999
0299999999
0399999999
0499999999

The following transactions have been to the above number range:


Primary postings
COIN

0100000000
0199999999
CO Through-postings from FI

types

of

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

KAZO
Planning transactions
CPPP
FIPA
KAZP
KOAP
KPIV
KPPB
KSII
KSP0
KSPB
KZPP
KZRP
PAPL
RKP1
RKP2
RKP3
RKP4
RKP5
RKP6
RKP7
RKP8
RKP9
RKPB
RKPL
RKPQ
RKPS
RKPU
RKPV
RKPW
RKPX
RKPZ
RKU1
RKU2
RKU3

Down payment
0200000000
0299999999
ABC process assessment: plan
Payment scheduling
Plan cost center accrual
Plan settlement
Actual cost distrib. cost obj.
Standard cost estimate
Actual price calculation
Plan split costs
Plan assessment to CO-PA
Plan overhead (periodic)
Interest calculation (plan)
Profit Planning
Planning primary costs
Planning activities
Planning secondary costs
Planning stat. key figures
Plan Revenue Types
Planning activity-dep. Costs
Planning act.-dep. sec. Costs
Planning order costs
Plan. act-dep.settlement costs
Periodic Reposting: Plan Data
Plan indirect activity alloc.
Manual cost planning
Sec. planning with template
Plan overhead cost assessment
Plan overhead cost distrib.
Secondary order cost planning
Aty-dep. sec. order cost plan.
Planning overhead credits
Repost costs
Repost revenue
Repost CO line items

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Actual postings (without primary postings)


CPPA
KAMV
KAZI
KGPD
KKKP
KKKS
KOAO
KSI0
KSOP
KZPI
KZRI
RKIB
RKIL
RKIU
RKIV
RKL
RKLT
RKN
RRIB
RRIU
RRIV
Other transactions
KABG
KABM
KAFM
KAUS
KEKB
KEKZ
KFPI
KFPP
KPPZ
KSOS
KSPA
KSWP
KSWS
KVAR
RXLX

0300000000
0399999999
ABC Actual process assessment
Manual cost allocation
Actual cost center accrual
Distribution acc. to peg
Control Costs (Primary)
Control Costs (Secondary)
Actual settlement
Actual cost center split
Prim. Target Cost Calculation
Actual overhead (periodic)
Interest calculation (actual)
Actual Periodic Repostings
Actual inverse activity alloc.
Actual Overhead Assessment
Actual Overhead Distribution
Actual activity allocation
Actual template allocation
Actual non-alloc. activities
Seg. adjust.: Act.per.repost.
Segment adjust.: Act. Assess.
Segment adjust.: Act. distrib.

0400000000
0499999999
Automat. WIP/results analysis
Manual WIP/results analysis
Payment data
Calculate scrap
Unit costing
Unit costing (overhead)
Transfer price allocation
Transfer price agreement
Standard costing (overhead)
Sec. Target Cost Calculation
Assessment to CO-PA
Prim. Target Cost Calc. (WIP)
Sec. Target Cost Calc. (WIP)
Variance calculation
Predistribution of fixed costs

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

RKS
1.1.3

Enter statistical key figures


Maintain Versions

Controlling > General Controlling > Organisation > Maintain Versions


Versions help to create independent data groupings in planning and in actual data, in planning,
versions display alternative plan scenarios based on different planning assumptions. For
example,

the type of assumption for the forecast (optimistic, pessimistic)


when the plan was created (original plan, updated forecast),
how binding the plan is.

The data for the most likely version in planning normally appears in version 000. The plan
data you enter here forms the basis for variance analysis.
General version definition: 0
1

Plan/actual version
Plan version: change

Active
Active

Assigned Controlling Area: HHML


Assigned Operating Concern: HHML
Attributes: Currency type
Exchange rate type
Derivation date

B0 (Operating concern currency)


M (Standard translation at average rate)
01.01.2000

Assignment to Fiscal Years: Fiscal Year


Controlling area
Version
Planning

From 2000 to 2010


HHML (HHML Controlling Area)
0 (Plan/Act - Version)
Copying allowed

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Currency translation
Value date
Price calculation
Actual
Fiscal Year
Controlling area
Version
Planning
Currency translation
Value date
Price calculation
Actual

Ex.rt.type P (Standard translation)


01.04.2000
Plan- 2 (Average Price)
3 (Cumulative Price)
From 2000 to 2010
HHML (HHML Controlling Area)
1 (Plan version: change 1)
Copying allowed
Ex.rt.type P ( Standard translation )
01.04.2000
Plan- 2 ( Average Price )
3 ( Cumulative Price)

1.2 Account Assignment Logic


Controlling > General Controlling > Account Assignment Logic
In HHML, Validation in CO-Module is used at line item level to validate User-ID and Cost
Center maintained in a Z - table (ZQMTNAVALCC)

1.2.1

Define Validation

Controlling > General Controlling > Account Assignment Logic > Define Validation
In validation, the SAP System checks whether particular input values fulfil one or more of
your user-defined conditions. These checks take place during the entry of values into the
system. If the conditions are fulfilled, the input value is transferred into the system. If the
conditions are not fulfilled, the SAP System displays a user-defined message.
Company Code : HHML
Validation : 0_CO_1 Validation for CO
Validation set at Line item to check User ID and Cost Center maintained in Z - table
(ZQMTNAVALCC), for all transactions flowing to CO Module, other wise Error Message
" You are not authorised for cost center & "

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

2. Cost Element Accounting


Controlling > Cost Element Accounting
SAP standard settings
Various category of Cost Elements are created in the Master Data
Each posting of costs must be assigned to a cost element. The system differentiates between
the following cost elements:

Primary cost elements (equivalent to G/L Codes)

Secondary cost elements (internal activities and cost allocation within your company).

The cost element type specifies the business transactions for which a cost element can be
used.
The following primary cost elements are used in Cost Object Controlling:

01: These can be debited with all primary postings (such as FI, SD or MM).
Accounting documents are generated for these postings.

22: These are required, for example, for settling order or project costs to CO-external
objects. Examples of CO-external objects are fixed assets (AM), materials (MM), or
G/L accounts (FI). Settlement generates an accounting document.

The primary cost elements are linked to G/L accounts in Financial Accounting.
The following secondary cost elements are used in Cost Object Controlling:

21: These are used for settling order or project costs to CO-internal objects. COinternal objects could be orders, profitability segments, cost centers, and projects.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

31: These are used for saving the data generated during WIP calculation or results
analysis on the order or project.

41: These pass overhead costs from cost centers to orders, projects, and so forth.

43: These are used by the system in internal activity allocation to allocate costs.

The secondary cost elements are only used within the Controlling component.
Cost element groups
These group together similar cost elements. In Cost Object Controlling, the cost element
groups are used to group together costs for settlement as well as for creating reports.

2.1 Master Data


Controlling > Cost Element Accounting > Master Data
Default settings made for cost centres.

2.1.1 Cost Elements


Controlling > Cost Element Accounting > Master Data > Cost Element
Manually activation for automatic creation of cost elements for G/L accounts done at HHML

2.1.1.1 Automatic Creation of Primary and Secondary Cost Elements


Controlling > Cost Element Accounting > Master Data > Cost Element > Automatic creation
Created a batch input session to automatically create primary cost elements, which were
created as G/L ( Profit and Loss ) Accounts in Financial Accounting.

2.1.1.1.1

Make Default Settings

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Controlling > Cost Element Accounting > Master Data > Cost Element > Automatic creation
> Make Default Settings
All expenses G/L accounts were created as Cost elements with Cost Element Category '1'.And
all income G/L accounts were created as Cost elements with Cost Element Category '11'.

2.1.1.1.2 Create Batch Input Session


Controlling > Cost Element Accounting > Master Data > Cost Element > Automatic creation
> Create Batch Input Session
Batch Session was created for one time master data creation of Primary Cost Elements:
Company Code: HHML
Chart of Accounts: HHML
Controlling Area: HHML
The Validity Period: 1st April 2000to31st Dec 9999
2.1.1.1.3 Execute Batch Input Session
Controlling > Cost Element Accounting > Master Data > Cost Element > Automatic creation
> Execute Batch Input Session
Executed the batch input session and thereby generated cost elements.
2.1.1.2

Create Cost Elements

Controlling > Cost Element Accounting > Master Data > Cost Element > Create Cost Element
Primary Cost Elements created through batch input session and Secondary Cost elements
created manually as master data
2.1.1.3 Create Cost Element Groups
Controlling > Cost Element Accounting > Master Data > Cost Element > Create Cost Element
group

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

HHMLGROUP: Cost Element Group created: The following is the structure of the same This
Cost Element Group was created functional and allocation of costs to various other cost
centres
HHMLGROUP
HHML Cost Element Group
CONS.IND
TOOLS
POWERFUEL
FACADM.SAL
FACTEXP
INSURANCE
DEPRECIAN
EXCH.FLUC
REP.MAIN
MART.EXP
MKTG.SAL
MKTG.SELG
SELLING
ADVERTISE
DIST.EXP
ROYALTY
NONOPERN
PROFITASST
LOSSASSET
BADDEBT
DONATION
DEFREVENUE
INTGEREST
TERMLOAN
FINCHARGES
OTHERS
OTHERINCOM

Consumables (Indirect)
Cutting Tools
Power and Fuel
FACTORY & ADMN. SALARY
Factory Expenses
Insurance Expenses
Depreciation Cost
Exchange Fluctuation
REPAIR & MAINTENANCE
Marketing Expense
Marketing Salary
Marketing Selling Expense
Sales Promotion
Advertisement
Distribution Expenses
Royalty
Expenses not related to Production
Profit on Sale of Asset
Loss on Sale of Assets
Bad Debt
Donations
Deferred Revenue Expenses
Interest and Financial Charges
Interest on Term Loan
Other Financial Charges
Others Interest & Financial Charges
Other Income

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

2.2

Reconciliation Ledger

Controlling > Cost Element Accounting > Reconciliation Ledger


Reconciliation Ledger is activated at HHML.
In case of assessment, distribution, order settlement and other CO transactions there can be a
mismatch between FI CO business area wise financial results. If the company requires that
cost of one business area in FI has to match with cost in the controlling area, the
reconciliation ledger is activated. The FI-CO reconciliation transaction is to run every period
end under the menu
Accounting Controlling Cost elements.
The G/L account used is OA10100400 with Document Type SU and Number Range 9000099999

2.2.1

Activate Reconciliation Ledger

Controlling > Cost Element Accounting > Reconciliation Ledger > Activate Reconciliation
Ledger
Reconciliation Ledger is activated for HHML

2.2.2

Maintain Adjustment Accounts for Reconciliation Posting

Controlling > Cost Element Accounting > Reconciliation Ledger > Maintain Adjustment
account for Reconciliation Ledger
The following G/L account is used for Reconciliation
Chart of accounts
Transaction

HHML Hero Honda Motors Limited: Chart of Ac


CO1 CO - FI reconciliation posting

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Debit
OA10100400
2.2.3

Credit
OA10100400

Specify Document Number Range for Reconciliation Posting

Controlling > Cost Element Accounting > Reconciliation Ledger > Specify Document
Number Range Reconciliation Ledger
Number range
CO area
No From number
00 0000090000

2.3

Object Rec. ledger document


HHML
To number
0000099999

Current number
0

Ext

Information System

Controlling > Cost Element Accounting > Information System


SAP standard reports are being used at HHML
2.3.1

Maintain Cost Element Groups

Controlling > Cost Element Accounting > Information System > Maintain Cost Element
Groups
Maintained earlier
2.3.2

Standard Reports

Controlling > Cost Element Accounting > Information System > Standard Reports
Standard Reports imported from source client '000'
2.3.2.1

Import Standard Reports

Controlling > Cost Element Accounting > Information System > Standard Reports > Import
Standard Reports
Imported SAP standard reports from client 000, online, to the client '100'.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

2.3.2.2

Generate Standard Reports

SAP standard reports that were imported, were also generated on client '100'.

3. Cost Center Accounting


Controlling > Cost Center Accounting
Default settings were used for HHML and changed wherever required.
Cost Center is an organizational unit within a controlling area that represents a
separate location of cost incurrence. The definition can be based on functional
requirements, allocation criteria, activities or services provided, physical location,
and/or area of responsibility. Cost centers are combined into hierarchical decision,
managerial, and responsibility groups. Cost center Accounting captures the overheads
of the organisation.
The cost centers are attached to a Company Code, Business Area and a Profit Center.
While creating a cost center hierarchy the business areas need to be kept in mind,
which will facilitate reporting.

3.1 Activate Cost Center Accounting in Controlling Area


Controlling > Cost Center Accounting > Activate Cost Center Accounting
Cost Center Accounting ACTIVE in Controlling Area HHML
Controlling area
Name

HHML
HHML Controlling Area

CoCd->CO area
Currency type

1 (Controlling Area same as Company Code)


10 (Company code currency)

Currency
Chart of accts

INR (Indian Rupee)


HHML
(Hero Honda Motors Limited: Chart of Accts)

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Fiscal year variant


Cost
Center
hierarchy

V3
(April- March, 4 special periods)
standard HHML_CCH (HHML Standard Cost Center Hierarchy)

3.2 Master Data


Controlling > Cost Center Accounting > Master Data
Default settings were done to create master data for

Cost Center
Activity Type
Statistical Key Figure
Through CATT

3.2.1

Cost Centers

Controlling > Cost Center Accounting > Master Data > Cost Center
Default settings were to create Cost Center

3.2.1.1

Maintain Standard Hierarchy

Controlling > Cost Center Accounting > Master Data > Cost Center > Maintain Standard
Hierarchy
Cost Center Hierarchy created:

Production
Production Service
Tool Room
Civil
Maintenance
Utility
Marketing
Administration

HHML_CCH

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

3.2.1.2 Maintain Cost Center Categories


Controlling > Cost Center Accounting > Master Data > Cost Center > Maintain Categories
SAP default Cost Center Category are used:
E
F
G
H
L
M
S
V
W

3.2.1.3

Development
Production
Logistics
Service cost center
Management
Material
Social
Sales
Administration

Define List Variants for Group Processing

V Controlling > Cost Center Accounting > Master Data > Cost Center > Define List Variant
SAP Standard is being used

3.2.1.4

Create Cost Centers

Controlling > Cost Center Accounting > Master Data > Cost Center > Create Cost Center
Cost Center created with validity period from 1st April 2000 to 31st Dec 9999

3.2.1.5

Maintain Cost Center Groups

Controlling > Cost Center Accounting > Master Data > Cost Center > Maintain Cost Center
Groups

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

HHML_CCH > HHML Standard Cost Center Hierarchy


PRODUCTION
ENGINE_PLT
ENG_PLT_D
ENG_PLT_G
FRAME_PLT
FRA_PLT_D
FRA_PLT_G
PRO_SERVIC
QUALITY_CO
QUA_CON_D
QUA_CON_G
PPC
PPC_D
PPC_G
ENGINEERIN
ENGG_D
ENGG_G
MATERIALS
MATR_D
MATR_G
MATR_HO
STORES
STORES_D
STORES_G
R_AND_D
R_AND_D_D
R_AND_D_G
TOOL_ROOM
TOOL_RM_D
TOOL_RM_G
CIVIL
CIVIL_D
CIVIL_G
MAINT
MAIN_D
MAIN_G
UTILITY
UTILITY_D

Production
Engine Plant
Engine Plant Dharuhera
Engine Plant Gurgaon
Frame Plant
Frame Plant Dharuhera
Frame Plant Gurgaon
Production Service
Quality Control
Quality Control Dharuhera
Quality Control Gurgaon
Production Planning and Control
Production Planning and Cont. Dharuhera
Production Planning and Control Gurgaon
Engineering
Engineering Dharuhera
Engineering Gurgaon
Materials
Materials Dharuhera
Materials Gurgaon
Materials Head Office
Stores
Stores Dharuhera
Stores Gurgaon
R&D
R & D Dharuhera
R & D Gurgaon
Tool Room
Tool Room Dharuhera
Tool Room Gurgaon
CIVIL
CIVIL DHARUHERA
CIVIL GURGAON
Maintenance
Maintenance Dharuhera
Maintenance Gurgaon
Utility
Utility Dharuhera

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

UTILITY_G
MARKETING
CORP_MKTG
CORP_MKT_D
CORP_MKT_G
COR_MKT_HO
COR_MK_SPD
COR_MK_SPG
ZONE_MKTG
NORTH_ZONE
SOUTH_ZONE
EAST_ZONE
WEST_ZONE
ADMIN
ADMIN_D
ADMIN_G
ADMIN_SPD
ADMIN_SPG
ADMIN_HO

3.2.1.6

Utility Gurgaon
Marketing
Corporate Marketing
Corporate Marketing Dharuhera
Corporate Marketing Gurgaon
Corporate Marketing Head Office
Corporate Marketing Spares Dharuhera
Corporate Marketing Gurgaon
Zonal Marketing
North Zone
South Zone
East Zone
West Zone
Administration
Administration Dharuhera
Administration Gurgaon
Administration Spares Dharuhera
Administration Spares Gurgaon
Administration Spares Head Office

Define Search Helps for Cost Centers

Controlling > Cost Center Accounting > Master Data > Cost Center > Define Search Help for
Cost Center
Business Area wise was added to Search criteria in Cost Center

3.2.2

Activity Types

Controlling > Cost Center Accounting > Master Data > Activity Types
Preparatory activity done for creation of Activity Types in Controlling area HHML :
Allocation cost elements: One to one creation of Secondary Cost Elements for Activity Types
of Category
CBM1S
CB Metro 1st Ser
CBM2S
CB Metro 2nd Ser
CBM3S
CB Metro 3RD Ser

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

CBM4S
CBM5S
CBM6S
CBNM1S
CBNM2S
CBNM3S
CBNM4S
CBNM5S
CBNM6S
CDM1S
CDM2S
CDM3S
CDNM1S
CDNM2S
CDNM3S
CONS
CTOOLS
LAB001
MACH01
OVHDS
POWFUL
PSM1S
PSM2S
PSM3S
PSM4S
PSM5S
PSM6S
PSNM1S
PSNM2S
PSNM3S
PSNM4S
PSNM5S
PSNM6S
SLM1S
SLM2S
SLM3S
SLNM1S
SLNM2S
SLNM3S
SPM1S
SPM2S

CB Metro 4TH Ser


CB Metro 5TH Ser
CB Metro 6TH Ser
CB NonMetro 1st Ser|
CB NonMetro 2ND Ser
CB NonMetro 3RD Ser
CB NonMetro 4TH Ser
CB NonMetro 5TH Ser
CB NonMetro 6TH Ser
CD Metro 1st Ser
CD Metro 2ND Ser
CD Metro 3RD Ser
CD NonMetro 1st Ser
CD NonMetro 2ND Ser
CD NonMetro 3RD Ser
Consumables
Cutting Tools
Labour cost
Machine hours
Overheads
Power And Fuel
PS Metro 1st Ser
PS Metro 2ND Ser
PS Metro 3RD Ser
PS Metro 4TH Ser
PS Metro 5TH Ser
PS Metro 6TH Ser
PS NonMetro 1st Ser
PS NonMetro 2ND Ser
PS NonMetro 3RD Ser|
PS NonMetro 4TH Ser
PS NonMetro 5TH Ser
PS NonMetro 6TH Ser
SL Metro 1st Ser
SL Metro 2ND Ser
SL Metro 3RD Ser
SL NonMetro 1st Ser
SL NonMetro 2ND Ser
SL NonMetro 3RD Ser
SP Metro 1st Ser
SP Metro 2ND Ser

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

SPM3S
SPM4S
SPM5S
SPM6S
SPNM1S
SPNM2S
SPNM3S
SPNM4S
SPNM5S
SPNM6S
SSM1S
SSM2S
SSM3S
SSNM1S
SSNM2S
SSNM3S
STM1S
STM2S
STM3S
STM4S
STM5S
STM6S
STNM1S
STNM2S
STNM3S
STNM4S
STNM5S
STNM6S

SP Metro 3RD Ser


SP Metro 4TH Ser
SP Metro 5TH Ser
SP Metro 6TH Ser
SP NonMetro 1st Ser|
SP NonMetro 2ND Ser
SP NonMetro 3RD Ser
SP NonMetro 4TH Ser
SP NonMetro 5TH Ser
SP NonMetro 6TH Ser
SS Metro 1st Ser
SS Metro 2ND Ser
SS Metro 3RD Ser
SS NonMetro 1st Ser
SS NonMetro 2ND Ser
SS NonMetro 3RD Ser
ST Metro 1st Ser
ST Metro 2ND Ser
ST Metro 3RD Ser
ST Metro 4TH Ser
ST Metro 5TH Ser
ST Metro 6TH Ser
ST NonMetro 1st Ser
ST NonMetro 2ND Ser
ST NonMetro 3RD Ser
ST NonMetro 4TH Ser
ST NonMetro 5TH Ser
ST NonMetro 6TH Ser

The 6 activities are defined to capture costs at Production Order and the remaining activity
types are defined to meet Service Management requirement in Free service Coupons

3.2.2.1

Maintain Cost Elements for Activity Allocation

Controlling > Cost Center Accounting > Master Data > Activity Types > Maintain Cost
Elements for Activity Allocation
The cost elements created for activities are of Category: 43 takes receiver debits as part of

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

internal activity allocation.


Allocation cost elements: One to one creation of Secondary Cost Elements for Activity Types
of Category: 43
CONS
CTOOLS
LAB001
MACH01
OVHDS
POWFUL

3.2.2.2

Consumables
Cutting Tools
Labour cost
Machine hours
Overheads
Power And Fuel

Create Activity Types

Controlling > Cost Center Accounting > Master Data > Activity Types > Create Activity
Types
Activity type is a unit in a controlling area that classifies the activities performed in a cost
centers, example Activity types in production cost centers are machine hours.
Activity Types Defined in Controlling Area: HHML
Are mentioned above.

3.2.2.3

Maintain Activity Type Groups

Controlling > Cost Center Accounting > Master Data > Activity Types > Maintain
Activity Types Groups
Activity Group created: HHMLGROUP with the following Activities assigned to it:
HHMLGROUP
CONS01
CTTL01
LAB001
LPG001
MACH01
PET001
UTL001

HHML activity group


Consumables
Cutting Tools usage
Labour cost
LPG usage
Machine hours
Petrol usage
Utilities usage rate

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

3.2.2.4

Define Search Helps for Activity Types

Controlling > Cost Center Accounting > Master Data > Activity Types > Define Search Help
for Activity Types
SAP standard is being used
3.2.3

Statistical Key Figures

Controlling > Cost Center Accounting > Master Data > Statistical Key Figures
Statistical Key figures are being used for allocation of costs from Cost Centers in Assessment
and Distribution Cycles

3.2.3.3

Maintain Statistical Key Figures

Controlling > Cost Center Accounting > Master Data > Statistical Key Figures > Maintain
Statistical Key Figures
The following Statistical Key Figures are created in Controlling Area: HHML
CONTLS
Cutting Tools Consumption
Not Linked to LIS
Manual Entry
MATRL
Material Cost
Not Linked to LIS
Manual Entry
SALWGS
Salary and wages
Not Linked to LIS
Manual Entry

3.3 Planning
Controlling > Cost Center Accounting > Planning
Cost center planning forms one part of the overall company planning process and should be
integrated with it. In cost center planning you plan primary and secondary costs as well as
activity and consumption quantities.
Cost centers are planned for specific timeframes, usually for one fiscal year but also for fiscal
quarters or other periods.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

For HHML, Controlling Area planning would be done at Cost Center level and overall
planning for the company is through integrated planning
3.3.1 Basic Settings
Controlling > Cost Center Accounting > Planning > Basic Settings
Basic settings need to be done before the users can do cost center planning

3.3.1.1 Maintain Exchange Rate Types


Controlling > Cost Center Accounting > Planning > Basic Settings > Maintain Exchange Rate
Types
Standard Exchange rates types "M" is being considered for planning

3.3.1.2 Define Exchange Rates


Controlling > Cost Center Accounting > Planning > Basic Settings > Define Exchange Rate
Exchange Rates are maintained for specific periods

3.3.1.3 Maintain Versions


Controlling > Cost Center Accounting > Planning > Basic Settings > Maintain Versions
Versions in planning, display alternative plan scenarios based on different planning
assumptions. For example,

Optimistic Plan
Forecast etc.

The data for the most likely version in planning normally appears in version 000. The plan
data you enter here forms the basis for comparison and variance analysis. Version 000 also
holds all actual data postings.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Versions Maintained at HHML


0
1
Years Active for both versions
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

Actual / Plan Version


Plan Change Version

With Integrated Planning and Copying allowed for all the years
You can use versions to create independent data groupings in planning and in actual.

3.3.2 Group Maintenance


Controlling > Cost Center Accounting > Planning > Group Maintenance
For planning the same groups are used as in the case of actuals
Cost Center Group
Cost Element Group
Activity Group

3.3.2.1 MAINTAIN Cost Element Groups


Controlling > Cost Center Accounting > Planning > Group Maintenance > Maintain Cost
Element Groups

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

The same cost Element Group is being used as in the case of Actuals
HHMLGROUP: Cost Element Group created: The following is the structure of the same
This Cost Element Group was created functional and allocation of costs to various other cost
centres
HHMLGROUP
HHML Cost Element Group
CONS.IND
Consumables (Indirect)
TOOLS
Cutting Tools
POWERFUEL
Power and Fuel
FACADM.SAL
FACTORY & ADMN. SALARY
FACTEXP
Factory Expenses
INSURANCE
Insurance Expenses
DEPRECIAN
Depreciation Cost
EXCH.FLUC
Exchange Fluctuation
REP.MAIN
REPAIR & MAINTENANCE
MART.EXP
Marketing Expenses
MKTG.SAL
Marketing Salary
MKTG.SELG
Marketing Selling Expenses
SELLING
Sales Promotion
ADVERTISE
Advertisement
DIST.EXP
Distribution Expenses
ROYALTY
Royalty
NONOPERN
Expenses not related to Production
PROFITASST
Profit on Sale of Assets
LOSSASSET
Loss on Sale of Assets
BADDEBT
Bad Debts
DONATION
Donations
DEFREVENUE
Deferred Revenue Expenses
INTGEREST
Interest and Financial Charges
TERMLOAN
Interest on Term Loan
FINCHARGES
Other Financial Charges
OTHERS
Others Interest & Financial Charges
OTHERINCOM
Other Income

3.3.2.2 Maintain Cost Center Groups


Controlling > Cost Center Accounting > Planning > Group Maintenance > Maintain Cost
Center Groups
The same Cost Center Group is being considered as for actuals

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

PRODUCTION
ENGINE_PLT
ENG_PLT_D
ENG_PLT_G
FRAME_PLT
FRA_PLT_D
FRA_PLT_G
PRO_SERVIC
QUALITY_CO
QUA_CON_D
QUA_CON_G
PPC
PPC_D
PPC_G
ENGINEERIN
ENGG_D
ENGG_G
MATERIALS
MATR_D
MATR_G
MATR_HO
STORES
STORES_D
STORES_G
R_AND_D
R_AND_D_D
R_AND_D_G
TOOL_ROOM
TOOL_RM_D
TOOL_RM_G
CIVIL
CIVIL_D
CIVIL_G
MAINT
MAIN_D
MAIN_G
UTILITY
UTILITY_D
UTILITY_G
MARKETING

Production
Engine Plant
Engine Plant Dharuhera
Engine Plant Gurgaon
Frame Plant
Frame Plant Dharuhera
Frame Plant Gurgaon
Production Service
Quality Control
Quality Control Dharuhera
Quality Control Gurgaon
Production Planning and Control
Production Planning and Cont. Dharuhera
Production Planning and Control Gurgaon
Engineering
Engineering Dharuhera
Engineering Gurgaon
Materials
Materials Dharuhera
Materials Gurgaon
Materials Head Office
Stores
Stores Dharuhera
Stores Gurgaon
R&D
R & D Dharuhera
R & D Gurgaon
Tool Room
Tool Room Dharuhera
Tool Room Gurgaon
CIVIL
CIVIL DHARUHERA
CIVIL GURGAON
Maintenance
Maintenance Dharuhera
Maintenance Gurgaon
Utility
Utility Dharuhera
Utility Gurgaon
Marketing

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

CORP_MKTG
CORP_MKT_D
CORP_MKT_G
COR_MKT_HO
COR_MK_SPD
COR_MK_SPG
ZONE_MKTG
NORTH_ZONE
SOUTH_ZONE
EAST_ZONE
WEST_ZONE
ADMIN
ADMIN_D
ADMIN_G
ADMIN_SPD
ADMIN_SPG
ADMIN_HO

Corporate Marketing
Corporate Marketing Dharuhera
Corporate Marketing Gurgaon
Corporate Marketing Head Office
Corporate Marketing Spares Dharuhera
Corporate Marketing Gurgaon
Zonal Marketing
North Zone
South Zone
East Zone
West Zone
Administration
Administration Dharuhera
Administration Gurgaon
Administration Spares Dharuhera
Administration Spares Gurgaon
Administration Spares Head Office

3.3.3.3 Maintain Activity Type Groups


Controlling > Cost Center Accounting > Planning > Group Maintenance > Maintain Activity
Type Groups
The same Activity Group is being used as in Actuals
Activity Group created: HHMLGROUP with the following Activities assigned to it:
HHMLGROUP
CONS01
CTTL01
LAB001
LPG001
MACH01
PET001
UTL001

HHML activity group


Consumables
Cutting Tools usage
Labour cost
LPG usage
Machine hours
Petrol usage
Utilities usage rate

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

3.4 Period-End Closing


Controlling > Cost Center Accounting > Actual Postings > Period End Closing
Period End Activities to be done in Cost Center Accounting are:
Assessment
Distribution

3.4.1 Distribution
Controlling > Cost Center Accounting > Actual Postings > Period End Closing > Distribution
Distribution to be done for cost centers actual costs to be allocated to other cost centers based
on statistical key figures.
These Statistical key figures can be loaded on the system through BDC programes

3.4.1.1 Specify Receiver Types for Distribution


Controlling > Cost Center Accounting > Actual Postings > Period End Closing > Distribution
> Specify Receiver types for Distribution
When making distributions you can specify which table fields are active and whether, in
cycles, a single value, an interval, or a group can be.

3.4.2 Assessment
Controlling > Cost Center Accounting > Actual Postings > Period End Closing > Assessment
At HHML, SAP standard is being used

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

4. Internal Orders
Controlling > Internal Orders
Internal Orders are 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
In HHML Internal Orders are being used to capture FOC sales (Free of Cost) and warranty
returns, warranty returns cost to be settled to Cost Center of Gurgaon and Dharuhera plant
from
Spare Part Plants and FOC sales to be settled to Profitability segment.

4.1 Order Master Data


Controlling > Internal Orders > Order Master Data
You need to define Order types to be able to create orders.
assign number range.
general status management for the order
issue authorization keys for the user statuses
allow revenue postings to the order

4.1.1 Define Order Types


Controlling > Internal Orders > Order Master Data > Define Order Types
The following order types were created to meet the operational requirement of HHML
CONV
To capture cost for conveyance
DIV
To capture inter division cost
FOC
To capture FOC sales

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

MOD
PLNT
RENT
SD
TEL
VEH

To capture model wise cost for warranty returns


To capture cost for plants
To capture cost of rental paid
To capture sales and distribution costs
To capture telephone expenses for various residential and board lines
To capture certain office vehicles petrol costs

4.1.2 Maintain Number Ranges for Orders


Controlling > Internal Orders > Order Master Data > Maintain Number Ranges for Orders
The following order types were created the following number range to meet operational
requirement of HHML, the alpha numeric combination were given to various order type
Order Type Number Range
CONV
CON0000000000 CONZZZZZZZZZ
FOC
MOD000000000 MODZZZZZZZZZ
MOD
MOD000000000 MODZZZZZZZZZ
RENT
REN000000000 RENZZZZZZZZZ
TEL
TEL000000000 TEL9999999999
VEH
VEH000000000 VEH9999999999

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

5. Product Cost Controlling


Controlling > Product Cost Controlling
Product Cost controlling involves two component. Product Cost Planning and Cost Object
Controlling.
At HHML we have used the Product Cost planning with quantity structure and under Cost
Object Controlling we are using the Cost Object by order since at HHML we are using the "
Make to Stock " scenario. In " Make to Stock " scenario we have production order wise WIP
calculation, Variance calculation and Settlement as period end activities.

5.1 Product Cost Planning


Controlling > Product Cost Controlling > Product Cost Planning
Component for planning the cost of products before an order to commence manufacturing is
placed.
It includes tools for planning costs and setting prices for materials (cost estimate with quantity
structure, cost estimate without quantity structure) and for other objects of cost accounting.
Cost estimate with quantity structure means the product has a specific Bill of Material and
routing.
For HHML cost estimate with quantity structure is used.

5.1.1 Basic Settings for Material Costing

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Controlling > Product Cost Controlling > Product Cost Planning > Basic Settings for Material
Costing
5.1.1.1 Define Cost Components
Controlling > Product Cost Controlling > Product Cost Planning > Basic Settings for Material
Costing > Define Cost Component
The cost components separate the results of a cost estimate into raw materials, material
overhead, external activities, setup costs, machine costs, labour costs, production costs, and
other costs from Bill of Material for a Product and Routing defined for a product.
Cost Component is grouping of cost elements that:
Makes the costs of a material, an activity type, or an overhead cost.
On selecting the cherry #Define Cost Components the following screen is displayed: Select the first row of the component structure and select the lens #Cost Components with
Attributes# and here define the structure of the cost components in product costing (estimate).
The cost components split the results of product costing into raw materials, Human resources,
Production, Material Overhead, Production overhead etc. For
HHML the following settings are done:
Cost Component Structure :01
The cost is broken up in the following headings:
Cost Compo.
01
01
01
01
01
01
01
01
01
01

Str.Cost Compo.
1
2
3
4
5
6
7
8
9
10

G/L Accounts Assigned to each Cost Component is

Description
Raw material - Local
Raw Mat. -Imported
Production-Consumable
Production-Cutg Tool
Production-Labour
Production-Mach Run
Production-Overheads
Production-Pow Fuel
Miscellaneous
Semi Finished Goods

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Cost Component

Description
Raw material Local

2
3
4
5
6
7
8
9
10

Raw Mat. -Imported


Production-Consumable
Production-Cutg Tool
Production-Labour
Production-Mach Run
Production-Overheads
Production-Pow Fuel
Miscellaneous
Semi Finished Goods

From
RA10201110
RA10201130
RA10201120
CONSUMABLE
CUTG TOOLS
LABOUR
MACH RUN
OVERHEADS
POWER FUEL

To
RA10201110
RA10305120
RA10201120
CONSUMABLE
CUTG TOOLS
LABOUR
MACH RUN
OVERHEADS
POWER FUEL

RA10801100
RA10804100

RA10801100
RA10804100

Assignment of Organisation Unit to Cost Component:


All Company Codes are assigned to Cost Component: 01

5.1.2 Material Cost Estimate with Quantity Structure


Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate
with Quantity Structure
Function for planning costs and setting prices for materials using the data from Production
Planning. This data (the quantity structure) is determined by the system automatically.

5.1.2.1 Define Costing Variants


Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate
with Quantity Structure > Define Costing Variant
Costing Variant is a key that determines how a cost estimate is created and valuated.
In Product Costing with Quantity Structure, the costing variant determines:

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

What dates apply for the cost estimate itself and for the explosion and valuation of the
quantity structure
How the BOMs and routings are selected to create the quantity structure
What prices are selected to valuate the quantity structure
How overhead is calculated

The costing variant links under a single umbrella the different co-ordinates like costing type,
costing variant, quantity structure determination and transfer control under a single name.
(these are explained in the new few pages).
When you select the cherry #Costing variant# the different variants PPC1,
PPC2,PPC3 and PREM are displayed. These costing variant holds different
combination of the characteristics of costing type and valuation variant. PPC1 which is the
costing variant for Standard cost estimate (SAP standard variant) is relevant to HHML.
5.1.2.2 Costing Variant: Components
Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate
with Quantity Structure > Costing Variant Component
This section contains the steps necessary for you to define the following control parameters
for material costing with quantity structure, which are assigned to the costing variant.

5.1.2.2.1 Define Costing Types


Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate
with Quantity Structure > Costing Variant Component > Define Costing Types
Here you define the technical attributes of the cost estimate.
You define the purpose for which a material cost estimate can be used by specifying which
field of the material master record the results of the costing can be transferred to. The costing
type for the standard cost estimate allows, for instance, the standard price to be updated. You
can set only one indicator for each costing type.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Update
Standard price
Tax price
Commercial price
Other price except std price
No update

Cost estimate
Standard cost estimate (01)
Inventory cost estimate
Inventory cost estimate
Modified standard cost estimate or current cost estimate
Any cost estimate

When you select the cherry Costing type the screen displays various costing types which has
different combinations and costing type 01 is relevant to HHML
The above costing type directs that the standard price field in the material master be updated
the estimate. Standard cost estimates must be saved with period start. If a cost estimate is
saved without date, the results of the previous cost estimate are overwritten by new cost
estimates.

5.1.2.2.2 Define Valuation Variants


Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate
with Quantity Structure > Costing Variant Component > Define Valuation Variant
Valuantion variant definition decides the determines what prices the system selects when it
valuates the quantity structure of a material cost estimate or order, or when it valuates the
costing items of a unit cost estimate. Here you create a valuation variant that contains the
required parameters for the valuation of a cost estimate.
When you select the cherry valuation variant under the menu Controlling Product Cost
Controlling
Product Cost Planning Cost Estimate with Quantity Structure, the screen displays different
Valuation variants. Variant 001 is relevant for Std Cost Estimate and 006 and 007 are relevant
for Production orders.
At HHML all standard settings are used but in 007 two more strategy are added for material
Valuation.
Valuation Strategy for material valuation (for bought-out materials)

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Strategy sequence that determines the valuation of the materials used in the cost estimate. The
materials are valuated using the price in the material master record or the values calculated in
a material cost estimate.

5.1.2.2.3 Define Date Control


Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate
with Quantity Structure > Costing Variant Component > Define Date Control
In costing, date control IDs control the dates on which the quantity structure and the value
structure are created. These dates determine the following:
The validity period of the cost estimate
The date on which the quantity structure is determined
The date on which the quantity structure is valuated
Date control determines which dates are proposed or displayed when a cost estimate is
created, and whether the user can change these dates. Attaching the correct key and attaching
them to the relevant costing variant assists in the dates being proposed in the requisite way
when a cost estimate is being created. This has no relevance to the cost calculation.

5.1.2.2.4 Define Quantity Structure Control


Controlling > Product Cost Controlling > Product Cost Planning > Material Cost Estimate
with Quantity Structure > Costing Variant Component > Define Quantity Structure Control
Define Quantity Structure Control
Quantity structure determination is used in cost estimates with quantity structure to specify for
each plant how the system searches for valid alternative BOMs and alternative routings to
create a quantity structure for multilevel BOMs. The search is carried out on the basis of two
parameters:
Application of BOMs
Selection ID for selecting alternative routing

At HHML it is the Production BOM


At HHML it is the routing ID 01

Quantity structure determination also specifies whether the required quantity for BOM
components with dimensional units of measure is rounded up to the next whole number if the
calculation of scrap-adjusted quantities results in a fraction.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

5.2 Cost Object Controlling


Controlling > Product Cost Controlling > Cost Object Controlling
Cost objects are the units to which costs and revenues can be assigned according to
cause by means of Cost Object Controlling.
The typical examples of Cost objects are Cost Centers, Production Orders, PA
Segment, PM Orders, Sales Orders etc.
5.2.1 Product Cost by Order
Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order
Cost object controlling links the controlling module to the Production orders in PP Module.
Production orders are one of the cost objects. The relevant cost object for HHML is #Product
cost by order .
(Please note the product cost by period is only relevant for repetitive manufacturing.).

5.2.1.1 Manufacturing Orders


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Manufacturing orders
The costs, which are collected through a mechanism of production orders, are covered under
this category. Typically, these orders are settled every period end and costs in the orders are
settled either to inventory or to price difference account.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

5.2.1.1.1 Check Costing Variants for Manufacturing Orders (PP)


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Manufacturing orders > Check Costing Variant
The costing variant PPP1 and PPP2 are relevant for plan and actual costing of process
orders.
The definition and linking of costing type and valuation variant are identical for to the
standard cost estimate explained above. The relevant costing for process orders is 06 for plan
costs and 07 for actual costs.

5.2.1.1.2 Check Valuation Variants for Manufacturing Orders (PP)


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Manufacturing orders > Check Valuation Variant
The relevant valuation variant for plan costs is 006 and 007 for actual costs.
The same settings as done in Basic settings for Material Costing with quantity structure.

5.2.1.1.3 Check Order Types


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Manufacturing orders > Check Order Types
Orders types for production orders are defined in PP Module and by selecting this cherry the
list of orders defined in PP is displayed here. When you select the relevant orders and go into
the details screen it can be seen that separate number ranges have been defined for each order
types and all the orders types of PP is having settlement profile as #PP01# and settlement
profile is explained later

5.2.1.1.4 Define Cost-Accounting-Relevant Default Values for Order Type


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Manufacturing orders > Define Cost Accounting Relevant Default Values for Order Type
Here you define the settlement rule and the relevant costing variant for each order type. For
PP order types the settlement rule is always PP01, which means full settlement and cannot be

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PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

changed. The orders as defined in PP for example Plant HHHD and Order type PP01 and the
following settings are done for HHML:

Plant
Order type
Default rule
RA key
Costing
Prel./vers.cstg
Val. var
Simul. costing
Val. var.
Planned cost calcul.

HHHD
PP01 Production order type for HHML
PP1
Production Mat.Full settlement
000002 WIP Calculation at Actual Costs
PPP1 Production order -planned
006 Production order -planned
PPP2 Production order - actual
007
Production order - actual
Determine Planned cost when saving

5.2.1.2 Define Goods Received Valuation for Order Delivery


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Define Goods Received Valuation for Order Delivery
In this step, you specify how material receipts valued at moving average price.
For materials valued at moving average price, the value for the credit posting is made using a
valuation variant. You have to define the valuation variant for each valuation area. The
valuation variant specifies what material price is used for the credit posting.
For materials valued at standard price, credit posting always takes place at a standard price.
If you have materials with moving average price you have to specify for the valuation area
(Plant) which valuation variant is to be used for goods receipt.
The valuation variant 007 is being defaulted for all the valuation strategy for all the plants

5.2.1.3 Period-End Closing


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing
Here you define the parameters that influence the activities at the end of the accounting period
in order-related production.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

You define the following:

How work in process is calculated for production orders


How variances are calculated for each production order or process order
How actual costs are passed on to other objects in the R/3 System.

5.2.1.3.1 Work in Process


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Work In Process
The system calculates work in process (WIP) to determine the costs incurred for materials that
have not yet been delivered to stock. This calculates the value of the unfinished goods.
In Product Cost by Order the work in process is calculated for the manufacturing order. The
work in process for manufacturing orders is normally calculated at actual costs. Work in
process at actual costs is calculated as the difference between the debits for material
withdrawals, internal activity allocations, external activities, and overhead costs (that is, the
actual costs assigned to the object) and the actual credits from goods receipts for delivery to
stock.
The work in process can be transferred to Financial Accounting and by period. Settlement to
Financial Accounting ensures that the work in process is included in the balance sheet and the
profit and loss statement
5.2.1.3.1.1 Define Results Analysis Keys
Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Work In Process > Define Result Analysis Key
Result Analysis key identifies in the project that the order is relevent for Variance calculation.
5.2.1.3.1.2 Define Results Analysis Versions
Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Work In Process > Define Result Analysis Versions
Results analysis versions lets you calculate WIP based on certain settings in different version.
This means that you can use different results analysis versions to do the following:

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PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Define different methods of WIP calculation. You can create results analysis versions
along with operational valuation that are based an "internal" results analysis version
created for internal purposes, rather than on multiple valuation.

This means that you can use different results analysis versions to:
- Define different methods of WIP calculation
- Define different amounts of work in process to be capitalized

Calculate work in process at actual costs in up to three valuation


In simplified control, the results analysis version shows you the following:

Which valuation view the results analysis data was updated in (such as Legal
Valuation)

Whether the version is relevant to settlement. The version relevant to settlement is the
results analysis version of operational valuation view and the results analysis versions
of multiple valuation views referring to that version.

Whether the data is transferred to Financial Accounting


You can transfer the results analysis versions of multiple valuation views to Financial
Accounting.

5.2.1.3.1.3 Define Valuation Method (Actual Costs)


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Work In Process > Define Valuation Method
In this step you define a valuation method for the calculation of work in process.
This creates the link between the controlling area, the results analysis key, the results analysis
version, and the system status.
When you create new valuation methods, you specify whether the work in process should be
valuated at target costs or actual costs.
* Work in Process at Target Costs
In the Product Cost by Period component the work in process is valuated at target costs. The
valuation is made on the basis of the quantities confirmed at the operations or reporting
points.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

The system determines the following in each period:


- Which materials were delivered to stock
- Which materials were confirmed at the operations
- Which materials and activities are not included in WIP calculation due to scrap
confirmations at subsequent operations?
* Work in Process at Actual Costs
In the Product Cost by Order component the work in process is normally valuated at
actual costs. The value of the work in process is the difference between the debit and the
credit of an order as long as the order has the status PREL (partially released) or REL
(released).
The valuation method for WIP calculation is linked to a system status.
Work in process at actual costs
The following status codes are relevant for WIP calculation in this component:
PREL
The order is partially released.
REL
The order is released.
DLV
The order has been completely delivered.
TECO
The order is technically completed.
If the status is PREL or REL, the system creates work in process in the amount of the actual
costs with which the order is debited.
If the status is DLV or TECO, the system cancels the work in process. The difference
between the debit through actual costs postings and the actual credit of the order from goods
receipts is interpreted as a variance with this status.
5.2.1.3.1.4 Define Line IDs
Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Work In Process > Define Line ID

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PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

SAP standard settings used


5.2.1.3.1.5 Define Assignment
Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Work In Process > Define Assignment
In this the cost elements are assigned to various costs ID's
The following settings are done at HHML :
Control.Area RA
Ver.

Masked Cost Element

Origin

Valid from

Req. to Capitalize

HHML

++++++++++

++++

001.1997

COS

HHML

QA++++++++

++++

001.1997

REV

HHML

RA10++++++

++++

001.1997

COP

HHML
HHML

0
0

RA108+++++
W+++++++++

++++
++++

001.1997
001.1997

SET
COS

5.2.1.3.1.6 Define Posting Rules for Settling Work in Process


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Work In Process > Define Posting Rules for Settling Work In Process
In this step you specify the G/L accounts in Financial Accounting to which the work in
process is settled. You assign a results analysis cost element or a group of results analysis cost
elements to two G/L accounts.
A posting document is generated in Financial Accounting on the basis of the settlement of
work in process.
Data is written to the balance sheet.
Data is written to the profit and loss statement.
The following G/L accounts are specified for HHML:
Control. Area

HHML

CompCode

HHML

RA Version

RA Category

WIPR

Record No.

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PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

P&L Acc.

RA10801130

B/S Acc.

LA60100100

5.2.1.3.2 Variance Calculation


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Variance Calculation
The various setting related to variance calculation are done here
5.2.1.3.2.1 Define Variance Keys
Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Variance Calculation > Define Variance Keys
The variance key specifies the following:

whether scrap is calculated in addition to the variances


whether a document is written containing the date, user name and change made

Orders can only be selected for variance calculation if a variance key is entered in the order.
The variance key is entered in the master data of the order in the following way:

If you create a material master record, the system proposes a variance key through the
plant.
If you create a production order to manufacture this material, the system proposes a
variance key through the entry in the material master record (costing view).

5.2.1.3.2.2 Define Default Variance Keys for Plants


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Variance Calculation > Define Default Variance Keys for Plants
For all the plants at HHML the Variance Key attached is 000001.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

5.2.1.3.2.3 Check Variance Variants


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Variance Calculation > Check Variance Variants
In SAP the variance is classified broadly as input variance and out variance. The following is
the different input variance:1.Price variances
Price variances are the differences between the planned prices and the actual prices of the
resources used. If this indicator is set, you should make sure that

the Material origin indicator in the costing view of the material master record is set
the Record quantity indicator is set in all relevant cost elements

2.Quantity variances
Quantity variances are differences between the planned and actual input quantities of the
resources.
If this indicator is set, you should make sure that
the Material origin indicator in the costing view of the material master record is settle
Record quantity indicator is set in all relevant cost elements
3.Resource-usage variances
A resource-usage variance arises when a different resource is used than was planned.
4.Input variances
Input variances are differences on the input side that cannot be assigned to any other variance
category (such as surcharges).
Variances on the output side:
5. Lot-size variances
Lot-size variances are differences between the planned fixed costs and the charged fixed
actual costs. Lot-size variances can only be calculated for target cost version 0.
6. Output price variances
Output price variances are differences between the target credit (at the standard price) and the

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PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

actual credit (for example at the moving average price). Output price variances can only occur
for materials with moving average price control.
7. Remaining variances
Remaining variances are differences that cannot be assigned to any other variance category
(such as rounding differences). If the system cannot calculate any target costs, only remaining
variances will be reported.
5.2.1.3.2.4 Define Target Cost Versions
Here you define the three target cost versions and assign it to the controlling area. Variance
calculation calculates the target costs so that the variances between the actual costs and the
planned
costs are determined using the same reference basis.
For example, if you compare the costs in the standard cost estimate with the actual costs in the
production order, the costs in the standard cost estimate are adjusted to the quantity that was
delivered to stock for the production order. This allows you to directly compare the target
costs with the actual costs for the actual quantity manufactured. For each production order
you can see the variances in three different ways.
Target cost version 0
You compare the actual costs of a production order with the target costs calculated in the
standard cost estimate for the material produced.
The base quantity for variance calculation is the actual quantity of the production
order (i.e., the quantity that was delivered to stock).
The target costs are calculated by converting the planned costs in the standard cost estimate to
the actual quantity (the costs that depend on the lot size in the standard cost estimate are
divided by the costing lot size and multiplied by the delivered quantity).
If the "scrap" indicator in the variance key is set, the control costs are calculated by
subtracting the value of the scrap from the actual costs for the order. If the delivery of the
material to stock is valuated with the standard price, the total target costs are equal to the
credit posting on the order at the time of delivery. The total variances equal the difference for
which a posting on a price difference account was made during settlement.
For this version, select actual costs as the control costs and standard cost estimate as the target

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PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

costs.

5.2.1.3.3 Settlement
Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Settlement
Settlement is the full or partial allocation of calculated costs from one object to another. In the
Production orders, the difference between the actual cost of production and the credit obtained
by it for the material produced and transferred to stock, is settled either to the material or to a
cost center. Under this customisation, you define the parameters for settlement. In the case of
normal production orders, no customisation is required as SAP defaults the settings for PP01
order type.
5.2.1.3.3.1 Create Settlement Profile
Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Settlement > Create Settlement Profile
This defines which settlement receivers and which distribution factors
addition, a settlement profile contains the default values for the settlement
PA transfer structure, as well as the maximum number of distribution rules
period of the settlement documents. A settlement profile must exist before
can be created for an object.
For HHML the following settlement profiles are used:
80E
JW01
PP01
RW01

Service order (rev.bearing)


Job work order settlement
Production order
Rework order settlement

The following settings are done for each settlement profiles :


Settlement Profile
To be settled in

80E
Full

Allocation Structure
Default Object Type

SM
CTR ( Cost Center )

Settlement Profile

JW01

are allowed. In
structure and the
and the retention
a settlement rule

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

To be settled in

Full

Allocation Structure
Default Object Type

JW
CTR ( Cost Center

Settlement Profile
To be settled in

PP01
Full

Allocation Structure
Default Object Type

A1
MAT ( Material )

Settlement Profile
To be settled in

RW01
Full

Allocation Structure
Default Object Type

RW
CTR ( Cost Center )

5.2.1.3.3.1 Create Allocation Structure


Controlling > Product Cost Controlling > Cost Object Controlling > Product Cost by order >
Period End Closing > Settlement > Create Allocation Structure
Serves to settle costs occurring on a sender to various receivers according to cost element
(group).
The settlement assignment sets the assignment of cost element (group) to a settlement cost
element.
Multiple assignments are combined in a settlement structure.
A settlement structure must meet the following criteria:
* Completeness:
To ensure orderly settlement, all cost elements under which costs occur must be represented in
a

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PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

settlement structure.
* Uniqueness:
A cost element may appear only once in a settlement structure

6. Profitability Analysis
Controlling > Profitability Analysis
CO-PA lets you analyse the profitability of segments of your market - structured according to
products, customers, orders, and summarisation of these and other characteristics - and
organizational units such as company codes or business areas. The aim is to provide your
sales, marketing, planning, and management organizations with decision-support from a
market-oriented viewpoint.
CO-PA automatically creates a segment for every possible combination of different
characteristics whenever data is posted to PA. Thus reporting on various combinations of
characteristics is possible through PA reports. Examples of segments are Customer, CustomerProduct, Customer-Product-Area Office etc. Each component of the segment is defined as a
characteristic in PA. The value part is captured in value fields in the case of costing based PA.
The CO-PA application itself offers two forms of Profitability Analysis: costing-based and
account-based. You can also use both of these types of CO-PA simultaneously.

6.1 Structures
Controlling > Profitability Analysis > Structure
Under this head, the basic structure of the Profitability Analysis application component is
defined.
Based on the definition under the structures various data is captured in PA.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.1.1 Define Operating Concern


Controlling > Profitability Analysis > Structure > Define Operating Concern
The operating concern is an organizational entity represents a particular structure or segment
of the market. It is the highest level of reporting in controlling Profitability Analysis. The
operating concern is divided into profitability segments and can be used to evaluate market
segments according to products, customers, orders, business area, profit centers with respect
to contribution margin/ profits. Many Controlling Areas could get assigned to an Operating
Concern.
For the company HHML, a single operating concern HHML has been set up.

6.1.1.1 Maintain Characteristics


Controlling > Profitability Analysis > Structure > Define Operating Concern > Maintain
Characteristics
The characteristics in Profitability Analysis represent those criteria according to which you
analyse your operating results and your sales and profit plan. Valid values of these
characteristics are combined to form profitability segments. You can use concepts that already
exist in the R/3 System, such as "Customer" and "Sales organization", to define
characteristics. In addition, you can manually define your own characteristics when you
customize your system.
In this step you can define your own characteristics. A number of frequently used
characteristics are already predefined in the standard system.
You initially define these characteristics independent of any operating concern. They are also
available in all clients.
Before you define a new characteristic, look at the list of existing characteristics. You may
find one there that already meets your requirements. (This list contains all predefined
characteristics and those you have already defined in your system.) To see a list of those
characteristics that are automatically contained in all operating concerns, choose "Extras ->
Fixed fields". To create a new characteristic, switch to the "change" mode and then choose the
Create icon.
Characteristics used at HHML:

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

COPA_KOSTL
KMVTNR
VKBUR
VKGRP
MATKL
KDGRP
KMLAND
WWPRG

Cost center
Sales employee
Sales office
Sales group
Material group
Customer group
Country
Product Group ( User Defined )

6.1.1.2 Maintain Value Fields


Controlling > Profitability Analysis > Structure > Define Operating Concern> Maintain Value
Fields
A value field is a field in which the system stores numeric values such as revenues, sales
deductions, and so on. Value fields are relevant only for Costing based PA and has no
relevance to Account based PA.
In this step, you can define your own value fields. Frequently used value fields, such as
"Revenue" and "Sales quantity", are already predefined in the standard system.
You define this value independent of any operating concern and any client. Before you create
a new value field, look at the ones that already exist. Then you can check whether one of
fields you have already defined or one defined in the standard system fulfils your
requirements. Once you are in the "change" mode, you can define a new value field by
choosing the "Create" icon: Enter a 4- or 5-character name that begins with "VV" for your
value field. Here you also need to specify whether this field is a quantity field or a field for
currency amounts. All the currency fields in any single line item use the same currency.
Which currency this is, is defined in the attributes of each operating concern. Each quantity
field uses one quantity unit. Thus you can use one quantity field to store quantities in different
units. On the next screen, you can enter texts to describe the value field, as well as how the
values in this field are to be aggregated over characteristics of time. In most cases, you will
use the aggregation rule "SUM (summation) to add up the values over periods.
You can change the attribute "Currency or quantity field" as long as this value field is not used
in any operating concern. You can change the texts for user-defined value fields at any time.
You can delete any value field that is not being used in an operating concern.
At HHML the following Value Fields are used:

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

ERLOS

Revenue

Amount

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

ABSMG
VVCOG
VVSPD
VVFRE
VVMCS
VVEIN
VVIDS
VVINS
VVNDP
VVPDI
VVSDS
VVSFI
VVSID
VVSLP
VVTCD
VVTRC
VVXPT
VV360
VVAVC
VVPRI
VVSTA
VVPRO
VVRMI
VVRML
VVADM
VVFAC
VVRLT
VVVAL
VVDVL
VVMSC
VVSCP
VVCPN
VVEFR
VVECF
VVFRP
VVFOB
VVNPL
VVEXC
VVJCF
VVINT
VVSTP

Sales quantity
Cost of goods
Spares Sales
Freight
Motor Cycle Sales
Insurance Export
Dis. on Int. MC SP
Insurance
MC Inst. Sale Price
MC Int - Insp. Char
SP-Stockist Discount
SP-Fre & Insurance
SP-Int Discount
SP-Int Sale Price
MC Int- Del. Charges
MC-Int Tem Reg Char
Export Price MC
Price Variances
Cost Per Unit
Price
Statistical Key
Consumables
Raw Mat. Con. Import
Raw Mat. Cons. Local
Admin. Overheads
Factory Overheads
Royalty
Credit Memo Value
Debit Note
Misc. Sales
Scrap Sales
Component Sale
Export Freight
Ex Curr. Factor Pric
Freight Prov for Tra
Spares FOB Price
Notional Profit.
Export Commision
100% discount
Instit. OT Asses Val
Std Time SKF

Quantity
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Quantity
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Quantity

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

VVSPE
VVSMF
VVCGP
VVIND
VVMED
VVCTL
VVDRE
VVFCH
VVLAB
VVMAC
VVMKT
VVNOP
VVOHD
VVPOV
VVPOW

Spares Exp Disc.


Flat Rate Time
Capital Gds Price
Inst. Discount
MC Exp Disc
Cutting Tools
Deferred Revenue
Financial Charges
Labour
Machine Run
Marketing Overheads
Non Operative Cost
Overheads
Production Overheads
Power & Fuel

Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount
Amount

6.1.1.3 Maintain Operating Concern


Controlling > Profitability Analysis > Structure > Define Operating Concern> Maintain
Operating Concern
The operating concern has Attributes and Data Structure.
1. Attributes
Attributes give the detail of operating concern currency and the fiscal year variant
2. Data structure
The data structure determines the structure of the profitability segments that you can analyse
and how costs and revenues are organized. All information in the data structure definition is
client independent.
The following setting are done for HHML in Attributes:
Operating concern
HHML Operating Concern
Operating concern currency
INR Indian Rupee
Fiscal year variant
V3 Apr.- March, 4 special periods

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

For the Data Structure:


The earlier mentioned Characteristics and Key Fields are used

6.2 Master Data


Controlling > Profitability Analysis > Master Data
For the User defined Characteristics master data can be maintained under this menu. At
HHML Master Data is maintained for characteristics " Product group "

6.2.1 Characteristic Values


Controlling > Profitability Analysis > Master Data > Characteristics Value
The values attributable to the characteristics can be defined under this head

6.2.1.1. Maintain Characteristic Values


Controlling > Profitability Analysis > Master Data > Characteristics Value > Maintain
Characteristics Value
The values attributable to the characteristics can be defined under this head. For example the
Characteristic Product Group can have characteristic values like "SPL " etc. Characteristic
values are defined in the normal path of PA and do not form part of customisation.

6.2.1.2 Define Characteristics Hierarchies


Controlling > Profitability Analysis > Master Data > Characteristics Value > Maintain
Characteristics Hierarchies
You can define hierarchical structures for characteristics in Profitability Analysis (CO-PA)
and analyse these structures later in the information system. This means you can, for example,
structure your products or customers in a hierarchy.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

At HHML no Hierarchical structures have been defined, but can be done as Master Data
whenever required
6.2.2 Define Characteristic Derivation
Controlling > Profitability Analysis > Master Data > Define Characteristics Derivation
Derivation lets you find values for certain characteristics automatically based on the known
values of other characteristics, where these characteristics are logically dependent on one
another.
No derivation rules are defined at HHML
6.2.3 Valuation
Controlling > Profitability Analysis > Master Data > Valuation
You can have values calculated automatically in costing-based CO-PA. This procedure is
called "valuation" and can be used for both plan and actual data.

6.2.3.1 Valuation Strategies


Controlling > Profitability Analysis > Master Data > Valuation Strategies
There are three different methods of valuation:
1. Valuation using conditions and a costing sheet
This is useful when you need certain data to evaluate a sale but do not yet know the actual
values. This makes it possible to calculate such things as sales commission, discounts, and
cash discounts or freight costs. You calculate these values by defining conditions, which are
stored and processed in a costing sheet. Conditions can be scaled and made dependent on
certain characteristic values. To valuate plan data you can also access conditions from Sales
and Distribution (SD) directly.
2. Valuation using product costing
You can also use product cost estimates from Product Cost Controlling (CO-PC) to determine
the cost of goods manufactured in Profitability Analysis. The breakdown of these costs in COPC is usually more detailed than that in CO-PA. Consequently, you can assign the individual
costing elements to value fields in CO-PA.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

3. Valuation by means of a user-defined program exit


If your requirements for valuation go beyond those supported in the standard system, you can
program your own valuation routines.

6.2.3.1.1 Define and Assign Valuation Strategy


Controlling > Profitability Analysis > Master Data > Valuation > Define and Assign Valuation
Strategy
A valuation strategy controls how value fields are valuated in costing-based Profitability
Analysis. It determines which methods are to be used to fill the individual value fields as well
as the order in which these methods are to be applied.
You can valuate your value fields using the following methods:
Valuation using CO-PA-specific conditions
Valuation using product cost estimates
Valuation using customer-defined valuation routines
In CO-PA planning, you can also valuate your data using conditions and costing sheets from
the Sales and Distribution (SD) application component. At HHML we are using product cost
estimates for actual data and CO-PA specific conditions for Planning Revenues

6.2.3.2 Set Up Valuation Using Material Cost Estimates


Controlling > Profitability Analysis > Master Data > Valuation > Set Up Valuation Using
Material Cost Estimate
Valuation of documents by reading the cost of goods manufactured in the material cost
estimates from Product Cost Planning. You do this by defining costing keys.
At HHML Cost of Goods Sold is broken up in the same fields as Cost itemization

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.2.3.2.1 Define Keys for Accessing Material Cost Estimates


Controlling > Profitability Analysis > Master Data > Valuation > Set Up Valuation Using
Material Cost Estimate > Define Keys for Accessing Material Cost Estimate
At HHML for valuating the details of Cost of Goods Sold the Costing Key 001 is used and for
plan data's Cost of Goods Sold Z01 is used. The following is the details settings for each.
Costing Key 001
Costing key
001 Current standard cost estimate
Costing variant
PPC1 Standard cost est. (mat.)
Costing version
1
The Current Standard Cost Estimate in the Material Master is used
Costing Key Z01
Costing key
Z01 Plan _ PA
Costing variant
PPC1 Standard cost est. (mat.)
Costing version
1
The Future Standard Cost Estimate in the Material Master is used (MARKED Standard
Cost Estimate and NOT RELEASED)
6.2.3.2.2 Assign Costing Keys to Material Types
Controlling > Profitability Analysis > Master Data > Valuation > Set Up Valuation Using
Material Cost Estimate > Assign Costing Keys to Material Types
Point of Valuation for actual data and plan data is done at material type level, defined in the
following manner at HHML :
PV
01
03
04

Record Type
F
F
F

Version
1
1

Material Type
FNGD
FNGD
FNGD

Valid Upto
31.12.9999
31.12.9999
31.12.9999

Costing Key
001
Z01
Z01

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.2.3.2.3 Assign Value Fields


Controlling > Profitability Analysis > Master Data > Valuation > Set Up Valuation Using
Material Cost Estimate > Assign Value Fields
The components of a cost component structure from Product Cost Controlling are assigned to
the value fields of the operating concern. Note that you need to maintain separate value field
assignments for each point of valuation in Profitability Analysis (CO-PA).
The following Assignment is done at HHML
Point
Of Cost
Description
Valuation
Component
01
1
Raw material Local
01
2
Raw Mat.-Imported
01
3
Production-Consumable
01
4
Production-Cutg Tool
01
5
Production-Labour
01
6
Production-Mach Run
01
7
Production-Overheads
01
8
Production-Pow Fuel
01
10
Semi Finished Goods
03
1
Raw material Local
03
2
Raw Mat.-Imported
03
3
Production-Consumable
03
4
Production-Cutg Tool
03
5
Production-Labour
03
6
Production-Mach Run
03
7
Production-Overheads
03
8
Production-Pow Fuel
03
9
Miscellaneous
03
10
Semi Finished Goods
04
1
Raw material Local
04
2
Raw Mat.-Imported
04
3
Production-Consumable
04
4
Production-Cutg Tool
04
5
Production-Labour
04
6
Production-Mach Run
04
7
Production-Overheads
04
8
Production-Pow Fuel
04
9
Miscellaneous

Value
Fixed/Variable
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3

Value Field
VVRML
VVRMI
VVPRO
VVCTL
VVLAB
VVMAC
VVOHD
VVPOW
VVRML
VVRML
VVRMI
VVPRO
VVCTL
VVLAB
VVMAC
VVOHD
VVPOW
VVRML
VVRML
VVRMI
VVPRO
VVCTL
VVLAB
VVMAC
VVOHD
VVPOW

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

04

10

Semi Finished Goods

VVRML

6.2.3.3 Define Conditions and Costing Sheets


Controlling > Profitability Analysis > Master Data > Valuation > Define Conditions and
Costing Sheet
Conditions and Costing Sheets in Profitability Analysis are used to calculate certain values,
which are used for analysing Contribution Margin. Conditions are used to calculate values
based on any number of criteria (such as the quantity sold, the product sold, or the customer
who bought the product). In this step, you can define CO-PA-specific costing sheets for
valuating data in CO-PA. You do this using the same basic functions as those for defining
pricing procedures in Sales and Distribution (SD).
At HHML the Costing Sheet and Conditions are being used to calculate revenues from Budget
sales quantities planned in Sales Information System.

6.2.3.3.1 Define Condition Tables


Controlling > Profitability Analysis > Master Data > Valuation > Define Conditions and
Costing Sheet > Define Condition Tables
Condition Tables are keys for identifying values with certain characteristics. Each condition
table represents a different combination of characteristics and can be used by any number of
conditions.
At HHML conditions are being used at material level to identify average revenue (value).
6.2.3.3.2 Define Access Sequences
Controlling > Profitability Analysis > Master Data > Valuation > Define Conditions and
Costing Sheet >Define Access Sequence
The access sequence determines the condition tables in which the system should search for
valid condition records for the condition type. Thus the access sequence is a sort of directory
that tells the system where condition records for that condition type are stored.
The access sequence and the condition type used at HHML are for Budgeted Revenue values.
These conditions are quantity based.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.2.3.3.3.Create Condition Types and Costing Sheets


Controlling > Profitability Analysis > Master Data > Valuation > Define Conditions and
Costing Sheet >Create Condition Types and Costing Sheets
A condition type is a key used that defines the attributes of a condition and identify the
condition in the system. You can use condition types to calculate expected costs or revenue.
For example, you can define conditions to create expected costs based on standard cost
estimate for future cost of finished products or you can define price conditions to determine
the standard price of the product sold.
A costing sheet is the standard cost sheet or pricing procedure used in Sales and Distribution
and it contains the conditions, which are used to calculate expected values.
At HHML, Profitability Analysis cost sheet is used for integrated budgeting where conditions
are used to calculate the revenue as well as the cost of goods sold for final products at planned
raw material cost.

6.2.3.3.4 Assign Value Fields


Controlling > Profitability Analysis > Master Data > Valuation > Define Conditions and
Costing Sheet >Assign Value Fields
All the condition types are assigned to value types in Costing based Profitability Analysis.
These assignment help to pick up the planned data in used defined reports for comparing
planned versus actual data.

The following settings are done at HHML:


Condition Types
COGS
PRIC
ZROY

Description
Cost Price CO-PA
Price Budget
Plan Royalty

Value Fields
VVCOG
ERLOS
VVRLT

Description
Cost of goods
Revenue
Royalty

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.3 Planning
Controlling > Profitability Analysis > Planning
Planning in PA is based on the characteristics that have been defined to which the value fields
can linked which assists in planning.
1.

The automatic planning functions provide you with a number of options for copying,
revaluating, forecasting, and distributing large amounts of plan data, which you can then
process in detail using the manual planning functions.

2.

In manual planning, you can define planning layouts that let you create and modify
plan values and quantities.

3.

The integrated planning functions let you transfer plan data from other applications,
such as Sales and Operations Planning (SOP), cost center planning, or the Logistics
Information System (LIS).

6.3.1 Initial Steps


Controlling > Profitability Analysis >Initial Steps
Some settings need to be done in CO-PA before we start using the planning function in
Profitability Analysis

6.3.1.1 Define Number Ranges for Planning Data


Controlling > Profitability Analysis >Initial Steps > Define Number Ranges
The Number Range needs to be defined for all the line items generated in CO-PA. The
following settings is done at HHML:
Number range object Plan line item for operating concern: HHML
Grouping.......... Record type
The number Range
0000000001 0999999999

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Groups Assigned to it: Record Type)


A
B
C
D
F
G
H
I

Incoming sales order


Dir.posting from FI
Order/proj.settlemnt
Overhead costs
Billing data
Customer agreements
Stat. key figures
Order-rel. project

6.3.1.2 Maintain Versions


Controlling > Profitability Analysis >Initial Steps >Maintain Versions
Versions help to create independent data groupings in planning and in actual data, in planning,
versions display alternative plan scenarios based on different planning assumptions. For
example,
the type of assumption for the forecast (optimistic, pessimistic),
when the plan was created (original plan, updated forecast),
how binding the plan is.
The data for the most likely version in planning normally appears in version 000. The plan
data you enter here forms the basis for variance analysis.
General version definition: Version
Version name
0
Plan/actual version
1
Plan version: change 1

Plan
Active
Active

Actual
Active

WIP/RA
Active

Assigned Controlling Area: HHML


Assigned Operating Concern: HHML
The detailed settings are the same as given at Controlling General Settings
6.3.1.3 Assign Quantity Fields

Variance
Active
Active

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Controlling > Profitability Analysis >Initial Steps >Assign Quantity Fields


Assign Qty fields links the SD Module quantity field with the CO-PA quantity field.
The following settings are done at HHML:
SD
Quantity Field
FKIMG
Billed quantity

CO-PA
ABSMG

Quantity Field
Sales quantity

6.3.2 Manual Planning


Controlling > Profitability Analysis > Manual Planning
Planning lay-out is not really part of customisation and can also be accessed through the
normal menu path is Accounting Controlling Profitability Analysis. Environment C0-PA
configuration and selecting the cherry Planning Layout. Under this the layout for the
planning screen is defined and is then attached to the planning profile. Once the screen layout
is defined, planning can be done in PA.

6.3.2.1 Prepare Initial Planning Screen


Controlling > Profitability Analysis > Manual Planning > Prepare Intial Planning Screen
In this step, you set up the initial planning screen and thereby specify the architecture to be
used in planning.
The initial planning screen consists of the following elements:
Planning level
Planning package
Planning method
Parameter set
This is planning level, which can be define by the user to have various levels of planning.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.3.2.2 Define Planning Layout


Controlling > Profitability Analysis > Manual Planning > Define Planning Layout
In this step you define the entry screens for sales and profitability planning. These definitions
are referred to as "planning layouts" and represent structures of rows and columns.
Each planning layout is valid for one operating concern. If you are using the alternative period
type in your operating concern, you need to decide whether you want to use the layout for
weeks or for periods first thing when you create the planning layout.
Planning layout "HHML-2001" for planning sales qty, revenue and cost of goods sold has
been defined in costing-based PA.
Characteristics and value fields in planning layout
Every field on the screen belongs to a row and a column of the planning layout. The content
of the field depends on the characteristics and value fields used to define the corresponding
row and column. One characteristic you can use is the plan/actual indicator. This makes it
possible to display actual values in planning for informational purposes. If you use the
plan/actual indicator, you need to specify a value for it in each column. In "actual" columns,
you cannot choose the characteristic "Version", whereas in "plan" columns you are required to
do so. By specifying characteristic values, you determine which data is selected and planned.

6.3.3 Integrated Planning


Controlling > Profitability Analysis > Integrated Planning
Integrated Budgeting is being used at HHML to arrive at Product wise profitability in costing
based Profitability Analysis.
In order to understand the flow of data the process for the same is explained below:

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

Revenue: The sales quantity for products are planned in Sales Information System using
consistent planning, these information of Sales quantity is passed on to CO_PA through Mass
Processing activity.
The revenues are then valued in CO-PA by using the costing Sheet in CO-PA, which in turn
uses condition types to access values or conditions maintained as Master Data in CO-PA.
Cost of Goods Sold: The cost of goods sold is arrived at by using the planned prices of Raw
Material and then creating a standard Cost Estimate for the final product (the planned prices
are picked up by changing the customisation of Costing Variant PPC1, where the valuation
strategy is changed to Planned Prices). Once the Standard Cost Estimate is run for a future
period it is saved. The same price is then marked in CO-Product Cost Controlling. (PLEASE
NOTE : " DO NOT RELEASE THIS STANDARD COST ESTIMATE ONLY MARK IT)
The customisation change is revered back to the earlier valuation strategy.
This Marked Standard Cost Estimate updates the future price in Material master.
From the valuation strategy, the plan prices for the future is picked up as cost of goods sold
for the plan period.
The planned sales quantity in SIS is transferred to Sales and Operation Planning, this in turn
generates production requirement in Long Term Planning. The Long Term Planning also
generates the budgeted schedule line items for material.
From long Term Planning the activity requirement in hours is transferred to Cost Centers as
Schedule Activity and these can be copied as plan activity and from these planned hours.
In cost center we plan the cost element wise budget value in Rupees
These cost center cost can then be assessed or distributed.
To arrive at the Product Wise Profitability, these cost centers cost are assessed and loaded to
products as overheads in Profitability Analysis

6.3.3.1 Transfer Cost Center Planning/Process Planning


Controlling > Profitability Analysis > Integrated Planning > Transfer Cost Center Planning
Cost Center Costs are transferred to CO-PA products in Cost Center Assessment Cycle

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.3.3.1.1 Initial Steps


Controlling > Profitability Analysis > Integrated Planning > Transfer Cost Center Planning >
Initial Steps
In the initial step we have assigned the plan version to the receiver version
6.3.3.1.1.1 Assign Receiver Plan Version
Controlling > Profitability Analysis > Integrated Planning > Transfer Cost Center Planning >
Initial Steps > Assign Receiver Plan Version
In this step, we assign the version in CO-OM to the desired receiver version in CO-PA
The following settings are done at HHML:
Version
0
1

Description
Plan/Act Version
Plan version: change 1

Year
2000
2000

Receiver Version in CO-PA


0
1

The same settings are done till year 2010 for HHML

6.3.3.1.2 Assess Cost Center Costs / Process Costs


Controlling > Profitability Analysis > Integrated Planning > Transfer Cost Center Planning
>Assess Cost Center Costs
Assessment Cycles for plan data at Cost Centers are defined in the same manner as for actual
data in CO-PA
6.3.3.1.2.1 Define Structure of Cost Center Assessment/Process Cost
Controlling > Profitability Analysis > Integrated Planning > Transfer Cost Center Planning >
Assess Cost Center Costs > Define Structure of Cost Center Assessment
The Plan cycles can be created in CO-PA for plan data

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.3.3.2 Define LIS Interface


Controlling > Profitability Analysis > Integrated Planning >Define LIS Interface
In this step, you define the interface for transferring data between info structures in LIS and
operating concerns in Profitability Analysis (CO-PA).
This interface lets you transfer the following data:
Plan data
Statistical key figures
SOP info structures
Note: The LIS interface only allows you to transfer data from the SOP into CO-PA. You set up
a transfer of data from CO-PA to SOP in the section Transfer of Sales Quantities to SOP.
At HHML we are transferring the Budget data from Info Structure S713 to CO-PA.
The following is the structure of Info Structure S713
Characteristics
Value Field
Sales organization
Invoiced quantity
Distribution channel
Division
Country
Sales office
Sold-to party
Material group
Material
Plant
Activities
Characteristic assignment
Assign the characteristics in the info structure to characteristics in the operating concern.
The following settings are done at HHML:
Char Allo
V_S713
V_S713

Counter Operating Concern


1
HHML
2
HHML

Characteristics
VKORG
VTWEG

Info structure
S713
S713

Characteristics
VKORG
VTWEG

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

V_S713
V_S713
V_S713
V_S713
V_S713
V_S713
V_S713

3
4
5
6
7
8
9

HHML
HHML
HHML
HHML
HHML
HHML
HHML

SPART
KMLAND
VKBUR
KNDNR
MATKL
ARTNR
WERKS

S713
S713
S713
S713
S713
S713
S713

SPART
ALAND
VKBUR
PKUNAG
MATKL
MATNR
WERKS

Key Figure assignment


Assign the key figures in the info structure to the value fields and quantity fields in the
operating concern. Here you can only assign quantity fields to quantity fields and value fields
to value fields.
The following settings are done at HHML:
Key Figure Allo.Counter Operating Concern Key Fig.
V_S713
1
HHML
ABSMG

Info structure
S713

Key Figure
UMMENGE

Assignment of Info Structure to Operating Concern


This assignment is to link the above assigned characteristics and key figure to value type in
CO-PA.
The following settings are done at HHML:
Assignment
V_S713
Description
Annual Budget
Operating concern
HHML
Version
1
Record type
F
Info struct.
S713
Version
001
Char. Allocation
V_S713
Key fig. assign.
V_S713

The above linking allows the quantity planned in Info Structure to be transferred to CO-PA
under integrated planning

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.4 Flows of Actual Values


Controlling > Profitability Analysis > Flow of Actual Values
Under this head customisation is carried-out for posting data from other Modules like SD,
MM, FI and other CO applications to Profitability Analysis
6.4.1 Initial Steps
Controlling > Profitability Analysis > Flow of Actual Values > Initial Steps
Setting are done for Number Range under this heading for HHML

6.4.1.1 Define Number Ranges for Actual Postings


Controlling > Profitability Analysis > Flow of Actual Values . Initial Steps > Define Number
Range
In this step the no. ranges for actual data flow is defined. Select the cherry #Define no. ranges
for actual posting in the menu path Controlling Profitability Analysis Flow of Actual values
and after keying in the operation concern HHML and selecting the overview menu (the one
sun on it) the following no. ranges are displayed for various data flow :Number range object Actual line items
Operating concern. HHML
Grouping.......... Record type
Assigned group for Record Types
A
B
C
D
F
G
H
I

Incoming sales order


Dir.posting from FI
Order/proj.settlemnt
Overhead costs
Billing data
Customer agreements
Stat. key figures
Order-rel. project

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

6.4.2 Transfer of Billing Documents


Controlling > Profitability Analysis > Flow of Actual Values > Transfer of Billing Documents
In this step you define how billing document items for sales from stock are transferred to
Profitability Analysis (CO-PA). Primarily this setting is relevant only for Costing based PA.
In costing-based CO-PA, you need to assign condition types and quantity fields from Sales
and Distribution (SD) to the value and quantity fields in CO-PA.
Activities:
Assign condition types to the desired value fields. These assignments let you transfer
"real" conditions (those that are posted to FI) and "statistical" (fictitious) conditions to
CO-PA. Assign value fields.

For real conditions, the corresponding revenue, sales deduction, and cost-of-sales
accounts must be defined as CO-relevant accounts (cost or revenue elements).

Assign the quantity fields in SD to the desired quantity fields in CO-PA. Assign
quantity fields.

If desired, reset individual value fields for billing documents of a certain billing type.
Reset value fields.

For account-based CO-PA, the system only transfers those posting lines that are posted to FI
as well.
Activities:

Only "real" postings that are posted to FI can be transferred to account-based CO-PA.
All you need to do to transfer this data to CO-PA is make sure that the desired revenue,
sales deduction, and cost-of-sales accounts are defined as relevant for CO.

6.4.2.1 Assign Value Fields


Controlling > Profitability Analysis > Flow of Actual Values > Transfer of Billing Documents
> Assign Value Fields

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

In the menu path Controlling Profitability Analysis Flow of Actual Values Transfer of Billing
Documents select the cherry Assign value fields and following link to SD fields have been
established.
All revenues, sales deductions and other values (such as transfer prices) are defined as
conditions in SD, which are linked to corresponding CO-PA value fields.

The following settings are done at HHML:


Cond.
JFCG
ZAS0
ZAS1
ZAS2
ZAS3
ZAS5
ZAS6
ZAS7
ZAS8
ZAS9
ZCGP
ZCPN
ZDVL
ZECF
ZEFP
ZEFR
ZEIN
ZEXC
ZFOB
ZFRE
ZFRP
ZIDS
ZIND
ZINS
ZINT
ZMED
ZMSC

Description
Free - 100% discount
Access. 10 for Inst.
Access. 1 for Inst.
Access. 2 for Inst.
Access. 3 for Inst.
Access. 5 for inst.
Access. 6 for inst.
Access. 7 for Inst
Access. 8 for Inst
Access. 9 for Inst
Capital Goods Price
Comp. Basic Price
Debit Value
Spares Exp Con Factr
Ex Factory Price
Freight(Export)
Insurance(Export)
Export Commission
Spares Export FOB
Freight
Freight Prov-Trnpt.
Discount on NDP
Instn. Discount
Insurance
Inst. Assess. Value
M/c Expt. Discount
Misc. Basic Price

Value Fields
VVJCF
VVNDP
VVNDP
VVNDP
VVNDP
VVNDP
VVNDP
VVNDP
VVNDP
VVNDP
VVCGP
VVCPN
VVDVL
VVECF
VVMCS
VVEFR
VVEIN
VVEXC
VVFOB
VVFRE
VVFRP
VVIDS
VVIND
VVINS
VVINT
VVMED
VVMSC

Description
100% discount
MC Inst. Sale Price
MC Inst. Sale Price
MC Inst. Sale Price
MC Inst. Sale Price
MC Inst. Sale Price
MC Inst. Sale Price
MC Inst. Sale Price
MC Inst. Sale Price
MC Inst. Sale Price
Capital Gds Price
Component Sale
Debit Note
Ex Curr. Factor Pric
Motor Cycle Sales
Export Freight
Insurance Export
Export Commission
Spares FOB Price
Freight
Freight Prov for Tra
Dis. on Int. MC SP
Inst. Discount
Insurance
Instit. OT Asses Val
MC Exp Disc
Misc. Sales

+/- Sign

(-)
(-)

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

ZNDP
ZNPL
ZPDI
ZRLP
ZRLT
ZSCP
ZSDP
ZSDS
ZSFI
ZSFV
ZSID
ZSLP
ZSPE
ZTCD
ZTRC
ZVAL
ZVPR
ZXPT

NDP Value
Notional Pro & Ls
PDI/Dealer Margin
Royalty Provision
Scraps Basic Price
Spares NDP
Stockist Discount
Spares F& I Factor
Spares F& I Value
Spares-Inst Discount
Spares List Price
Spare Expt. Discount
Delivery Charges
Temp Regt Charges
Credit Value
Cost - HHML
Export Price

VVNDP
VVNPL
VVPDI
VVRLT
VVRLT
VVSCP
VVSPD
VVSDS
VVSPD
VVSFI
VVSID
VVSLP
VVSPE
VVTCD
VVTRC
VVVAL
VVCOG
VVXPT

MC Inst. Sale Price


Notional Profit.
MC Int - Insp. Char.
Royalty
Royalty
Scrap Sales
Spares Sales
SP-Stockist Discount
Spares Sales
SP-Fre & Insurance
SP-Int Discount
SP-Int Sale Price
Spares Exp Disc.
MC Int- Del. Charges
MC-Int Tem Reg Char
Credit Memo Value
Cost of goods
Export Price MC

(-)
(-)

6.4.2.2 Assign Quantity Fields


Controlling > Profitability Analysis > Flow of Actual Values > Transfer of Billing Documents
> Assign Quantity Fields
A number of quantity fields are defined and used in the SD billing system. In this step you
assign these to the corresponding quantity fields in costing-based Profitability Analysis (COPA).
The following settings are done at HHML
SD Key Field
FKIMG

Description
Billed quantity

CO-PA key
ABSMG

FeildDescription
Sales quantity

6.5 Information System


Controlling > Profitability Analysis > Information System
At HHML certain Reports have been defined to meet the reporting requirement.

SYSTEM DOCUMENT
PROJECT SYNERGY SAP R/3 4.6B AT HERO HONDA MOTORS LIMITED

These report are form based reports

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