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SAP IMPLEMENTATION
SAP Implementation
BUSINESS BLUEPRINT
Business Blueprint
Controlling
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DOCUMENT APPROVALS
....................................................... ................................
Mr.Mahapatra.K
Core Team Member- BEL
....................................................... ................................
Mr.Venkataramana.K Date
Functional Consultant-1
...................................................... ................................
Mr.Ramesh Babu M Date
Functional Consultant-2
....................................................... ................................
Mr.Venkata Swamy.V Date
Functional Consultant-3
....................................................... ................................
Mr.Yogesh Kulkarni Date
Project Manager - Wipro
....................................................... ................................
Sri.R.P.S.Gahlaut Date
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GENERAL INFORMATION
DOCUMENT INFORMATION
Version Filename Date Author Reviewed Changes from previous version
by
V 1.0 Controlling
REFERENCE DOCUMENTS
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Contents:
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ORGANIZATION STRUCTURE
Considering the modules to be implemented for BEL, the following Controlling organizational
structure
Controlling area
The controlling area is the highest organizational unit in Controlling. BEL Controlling Area shall
be 1000. There shall be only one Controlling Area across all company codes
All company codes of BEL shall be attached to Controlling Area - 1000 with single Chart of
Accounts – 1000 with single Fiscal Year Variant Z1
Company Code: A company code is the smallest organizational unit for which complete,
independent accounting can be carried out. This includes the entry of all transactions subject to
posting and the creation of all items for legal individual financial statements, such as the
balance sheet and the profit and loss statement.
As for BEL’s organization, it is proposed that the assignment of company code to be carried out
as follows:
Corporate 1000
Bangalore 1100
Chennai 1200
Ghaziabad 1300
Hyderabad 1400
Kotdwara 1500
Machilipatnam 1600
Panchakula 1800
Pune 1900
All the company codes will be using INR as the Controlling Area and Company Code currency..
Inter-company automatic posting function will be activated for BEL as all companies will
maintain their full set of accounts in the same client.
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Chart of Accounts
A chart of accounts is a placeholder where all the required G/L accounts can be defined. In the
first place, the chart of accounts needs to be indexed so that it is possible to proceed with the
G/L account management.
As for BEL Organization, it is proposed that a single chart of accounts to be used for all the
companies within the scope of implementation, as follows:
Fiscal Year
Fiscal year definition is configured to ensure any posting or transactions to be captured in the
corresponding accounting period. Additionally, a fiscal year definition is the basis for
determining posting periods as well as audit adjustment periods.
A fiscal year variant is used to define the fiscal year. In short, the definition of a fiscal year
It is recommended for BEL requirements to use the following fiscal year variant.
Standard Hierarchy means a tree structure representing all cost centers belonging to a
controlling area from a Controlling perspective.
You can combine cost centers into cost center groups. You can then create cost center
hierarchies from these groups by combining the groups according to decision-making area, area
of responsibility, or management area.
A cost center hierarchy comprises all cost centers for a given period and therefore represents
the whole enterprise. This hierarchy is known as the standard hierarchy.
To create cost centers, you need to define a hierarchical cost center structure (cost center
group). In Cost Center Accounting, this structure is known as the standard hierarchy
You can display and edit organizational units in your standard hierarchy assignment and the
related master data.
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This section summarizes the type of data, within this module, that is envisaged to be converted
from the legacy systems to SAP R/3 and the envisaged method of conversion. This section is
not intended to detail or document the data conversion strategy.
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We distinguish between primary cost and revenue elements and secondary cost elements.
When you create a secondary cost element, the SAP System checks whether a corresponding
account already exists in Financial Accounting. If one exists, you can not create the secondary
cost element in cost accounting.
Direct posting means: You post a fixed amount to an account by specifying the account
number. You can post directly to all primary cost elements.
Indirect posting means: The R/3 System determines the account automatically at the time of
posting You can not enter the account number with the posting transaction. You can only post
indirectly to secondary cost elements.
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Benefits
New functionality for BEL
Gap Analysis
NIL
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Changing of Cost Element Group: This process is for changing a Cost Element Group. This
allows for values to be added or deleted from the group, or for other groups to be added or
deleted from the cost element group (when the group is a hierarchy).
Display a Cost Element Group: This process is for displaying a Cost Element Group. This
would apply to a Standard Hierarchy or an Alternative Hierarchy. This allows for various cost
element groups to be viewed along with their values.
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Gap Analysis
No Gaps
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You use Cost Center Accounting for controlling purposes within your organization. Cost Center
Accounting lets you analyze the overhead costs according to where they were incurred within
the organization.
Cost Centers enables you to valuate semi-finished and finished products in Product Cost
Controlling (CO-PC), and to calculate contribution margins in Profitability Analysis (CO-PA). The
“activities” of cost centers represent “internal resources” for business processes in Activity-
Based Costing.
The costs of each cost-accounting-relevant business transaction portrayed in the R/3 System
can be assigned through Cost and Revenue Element Accounting to an account assignment
object in the Controlling component (CO).
For overhead costs this can be cost centers, internal orders, business processes, or overhead
projects.
Recording and assigning overhead costs allows you to control costs and prepare information for
the subsequent areas of Cost Accounting.
You can use the methods of activity allocation, assessment or distribution to further allocate
Costs.
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Cost Center master Creation: A cost center is an organizational unit within a controlling area
that represents a clearly delimited location where costs occur. You can make organizational
divisions on the basis of functional, settlement-related, activity-related, spatial, and/or
responsibility-related standpoints.
You use cost centers for differentiated assignment of overhead costs to organizational activities,
based on utilization of the relevant areas and for differentiated controlling of costs arising in an
organization
Master data determines the structure of the given application component in the SAP System
and remains essentially unchanged in a live system, that is, in the current settlement periods.
The system displays the master data fields on different tab pages on the basic screen. After
initial entry, the system displays the basic data tab page, which is ready for input. On this tab
page, the system generally displays all fields that need to be edited.
You can edit more fields by selecting the appropriate tab page. You can use pushbuttons on the
tab pages to go from one maintenance transaction or display transaction to another
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Gap Analysis
No Gaps
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You can collect cost centers according to various criteria into groups. This enables you to use
cost centers to depict the structure of the organization in the SAP System.
You can use the groups to build cost center hierarchies, which summarize the decision-making,
responsibility, and control areas according to the particular requirements of the organization.
The individual cost centers form the lowest hierarchical level.
There must be at least one group that contains all cost centers and represents the entire
business organization. This cost center group is described as the standard hierarchy. You can
assign more cost center groups to the standard hierarchy.
Cost Center Group Creation: A Cost Center Group is an organizational unit storing a group of
cost centers. Cost Centers with similar characteristics may be grouped together in cost center
group. You can define any number of cost center groups for valuation, planning and allocation
purposes as part of master data maintenance. You can also arrange cost center groups in
further cost center groups, creating a cost center hierarchy.
Request for a Cost Center Group: - These groups could be used for consistency and ease of
use in reporting, planning, allocations, etc
You can also create any number of alternative groups. You can structure these, for example,
according to organizational and/or functional viewpoints. Cost center groups enable you to
perform evaluations for each decision-making, responsibility, or control area. They also support
the processes during planning and internal allocations
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Gap Analysis
No Gaps
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ACTIVITY TYPES
Activity types classify the activities produced in the cost centers within a controlling area.
To plan and allocate the activities, the system records quantities that are measured in activity
units. Activity quantities are valuated using a price (allocation price).
In Overhead Cost Controlling, costs based on the activity quantity of an activity type are posted
separately in fixed and variable portions. When you divide the activities of a cost center into
activity types, you should consider whether the costs can be allocated effectively to the activity
types.
The prices of the activity types of a cost center can be either entered manually, or calculated by
the system based on the costs allocated to the activities. Prices can be calculated either using
plan costs or actual costs.
You can plan, allocate, and control costs either at the activity type level of a cost center, or at
the cost center level. You can enter actual costs at the cost center level. Costs entered at the
cost center level are assigned using splitting
You can also assign the activity type of a cost center directly. This use was designed for certain
application areas (such as personnel costs and depreciation postings).
When the activities produced by a cost center are used by other cost centers, orders,
processes, and so on, this means that the resources of the sending cost center are being used
by the other objects.
Typical examples of activity types for cost centers are machine hours, administrator hours, CPU
minutes or units produced.
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Change Activity Type: - The activity type classifies the specific activities provided by a cost
center along cost allocation lines. Activity inputs from a sender cost center mean that a receiver
(another cost center or an order, process, and so on) is drawing on the resources of the sender
cost center. Valuation of activity quantities is made with an allocation price calculated based on
the managerial strategy chosen. Make changes to the activity type master data either at the
beginning or at the end of the fiscal year in order to ensure data consistency
Display Activity Type: The activity type classifies the specific activities provided by a cost center
along cost allocation lines. Activity inputs from a sender cost center mean that a receiver
(another cost center or an order, process, and so on) is drawing on the resources of the sender
cost center. Valuation of activity quantities is made with an allocation price calculated based on
the managerial strategy chosen.
Deleting an activity type: - The activity type classifies the specific activities provided by a cost
center along cost allocation lines. Activity inputs from a sender cost center mean that a receiver
(another cost center or an order, process, and so on) is drawing on the resources of the sender
cost center. Valuation of activity quantities is made with an allocation price calculated based on
the managerial strategy chosen. You can only delete activity types in the current Controlling
Area if no transaction data exists for the activity type in the plan, commitments or in the actual
for the given fiscal year(s). You are also not allowed to plan any statistical key figures
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Reviewing changes made to activity type: - Activity types created in the system may require
changes to correct errors made at the time of recording the master data or to update the data
with additional information. The following screens provide an internal audit trail to verify what
changes were made, when, and by whom. To review changes made to activity type master
data as a step in investigating other than expected results of activity type allocations
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You can use activity type groups to process multiple activity types in one business transaction
within Cost Center Accounting . This is true for planning or assessment. During planning, for
example, you can display and plan multiple activity types in one transaction. You can also use
activity type groups during assessment (for example, assessment to specified activity type
groups).
As with cost elements and cost centers, the SAP System enables you to create and
administrate activity type groups in parallel. For example, you can create separate activity type
groups for planning and allocation purposes. You can also define additional activity type groups,
for purposes such as price analysis.
Create Activity Type Groups: Use this transaction to create Activity Type groups. Activity
type groups are flexible structures and can be used in collective master data processing,
reporting, allocations, and authorization objects. Each sub group represents a level of
summarization. An Activity Type group is unique within a controlling area.
There is a business need or desire to group activity types for processing and reporting
requirements
Change An Activity Type Group: - Use this transaction to change an Activity Type Group.
When Activity Type Groups are changed both activity types and other activity type groups may
be added, revoked or re-assigned to the Activity Type Group being maintained. Activity type
groups are flexible structures and can be used in other activity type groups, collective master
data processing, reporting, allocations, and authorization objects.
Each sub group represents a level of summarization.
Groups are unique within a controlling area. When deleting a group, notice that it is not deleted
from the controlling area, its relationship to the next superior node is revoked
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Step Ref Procedures T. Code Input Output
1 Creation of Activity Type Groups KLH1 Activity type New
details group
created
2 Changing of An Activity Type KLH2 Activity type Structure
Group group, changed.
Controlling area
Gap Analysis
-- NIL --
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Fixed values –
Key figures defined, as fixed values are valid as of the posting period, and in all
Subsequent posting periods of the fiscal year.
Totals values
Key figures defined as Totals values are valid only in the posting period in which they
are entered.
Key figures defined as fixed values are valid as of the posting period, and in all subsequent
posting periods of the fiscal year.
You can create, change and display statistical key figures individually or collectively. Individual
processing lets you process only one statistical key figure. Collective processing lets you
process multiple statistical key figures simultaneously.
Change Statistical Key Figure: - The purpose of this script is to demonstrate how to change a
statistical key figure. When you make changes to key figures of the category Fixed values, you
must enter a new fixed value. This new value is valid for all subsequent periods, until you enter
another new value. When you make changes to statistical key figures of the category Totals
values, you can first reset the values using reversed +/- signs, and then enter the new values.
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Gap Analysis
-- NIL --
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Creation of statistical key figure Group: - When several statistical key figures have been
created, a statistical key figure group may be necessary for reporting and monitoring the
contents of the group. For example, a statistical key figure (SKF) type group could be
created for all SKFs managed by Business Systems, all SKFs managed by Human
Resources, etc. This will help assign responsibility for large numbers of SKFs.
To create an organized way of monitoring statistical key figures by creating groups for skf’s with
user defined similar characteristics
Display Statistical Key Figure Group: - To display a previously created statistical key
figure group, enter the statistical key figure group name or click on down facing area
which Opens a statistical key figure group selection box. Make your selection
from the drop down list for the statistical key figure group you wish to display and click on the
green check mark to continue.
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Step Ref Procedures T-code Input Output
1 Creation of statistical key figure Statistical SKF
Group KBH1 Key group
Figure, created
Controlling
area
2 Changes To Statistical Key Figure KBH2 SKF Group SKF
Group details Changed
3 Display Statistical Key Figure KBH3 SKF Group SKF
Group. details displayed
Gap Analysis
-- NIL --
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Cost center planning involves entering plan figures for costs, activities, prices or
statistical key figures for a particular cost center and a particular planning period. You can then
determine the variances from these figures when you come to compare these plan values with
the costs actually incurred. These variances serve as a signal to make the necessary changes
to your business processes.
Cost center planning forms part of the overall business planning process, and is a prerequisite
for standard costing. The main characteristic of standard costing is that values and quantities
are planned for specified timeframes, independently of the actual values from previous periods.
You can take plan costs and plan activity quantities to determine the (activity) prices. These
prices can be used to valuate internal activities during the ongoing period, that is, before the
actual costs are known.
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Together with sales planning, cost planning is the starting point for sales and profit planning.
Activity-independent cost planning covers both primary and secondary costs, but does not refer
to a specific activity type. The opposite to this is activity-dependent planning.
Activity-dependent planning of primary and secondary costs enables you to plan both fixed and
variable costs. You may require this functionality if your costing system uses flexible standard
costing based on marginal costs. It is also possible to carry out flexible standard costing based
on full costs or marginal costs.
You can assign plan activity-independent costs to activity types using various rules, for
example, using equivalence numbers or your own splitting rules.
Gap Analysis
-- NIL --
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Creation of Internal Orders: The Enterprise needs to collect and analyze actual and planned
costs related to a specific project or event. The project/event will span several accounting
periods and all costs will be settled in the period they were incurred.
Internal orders are objects in CO that collect actual and plan revenues and cost, statistical
and activity data. Data is collected in the order at the transaction level. Based on the order’s
purpose, the values can be settled (periodically or all at once) to a final receiver such as a
cost center, general ledger account, work breakdown structure, asset, real estate object,
another internal order, profitability segment, etc. The order’s inflows as well as outflows can
be reported in the Internal Orders Information System. In the delivered reports, the user can
drill down through the original documents to the line item.
The order’s purpose is defined in Customizing in the Order Type. An Internal Order master
record is created on the functional side and includes the attributes established in the order type.
Use a statistical order to mange statistical detail with value detail posted to a cost center.
Change Internal Order: - Internal orders are objects in CO that collect actual and plan
revenues and cost, statistical and activity data. Data is collected in the order at the
transaction level. Based on the order’s purpose, the values can be settled (periodically or all
at once) to a final receiver such as a cost center, general ledger account, work breakdown
structure, asset, real estate object, another internal order, profitability segment, etc. The
order’s inflows as well as outflows can be reported in the Internal Orders Information
System. In the delivered reports, the user can drill down through the original documents to
the line item. The order’s purpose is defined in Customizing in the Order Type. An Internal
Order master record is created on the functional side and includes the attributes established
in the order type. Use a statistical order to mange statistical detail with value detail posted to
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a cost center. This example demonstrates an internal order used to accumulate transactions
in real time and settle transactions to a cost center periodically
Gap Analysis
-- NIL --
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Internal order groups need to be created for use in collective processing and reporting
Internal Order Groups can be created either by (a) specifying specific internal order numbers to
be included within a group, (b) a range of numbers that defines the group, or (c) a combonation
of the two.
Internal Order Creation: Internal order groups are very flexible structures and can be used in
collective processing (master data and transaction), reporting, allocations, and authorization
objects. Each sub group represents a level of summarization.
Groups are unique within a controlling area.
Change IO Group: - Order groups as well as orders can be added, revoked or re-assigned here.
Order groups are very flexible structures and can be used in other order groups, collective
processing (master data and transaction), reporting, allocations, and authorization objects.
Each sub group represents a level of summarization.
When deleting a group, notice that it is not deleted from the controlling area, its relationship to
the next superior node is revoked. Delete a group by revoking its relationships to each superior
node
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Step Ref Procedures T. Code Input Output
1 CO-11-01 KOH1 Order group New
IO Group Creation: Set ID group
created
2 Change IO Group: KOH2 Order group Structure
Set ID changed.
3 View IO Group: KOH3 Order group Display
Key-date
Gap Analysis
-- NIL --
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Creation of Profit Center: The master data in Profit Center Accounting is the structural
concepts according to which data can be posted and analyzed in Profit Center Accounting.
This master data includes any number of profit centers, a standard profit center hierarchy, a
dummy profit center for non-assigned postings, and, if desired, a number of alternative profit
center hierarchies.
The Enterprise contains Profit Centers at the lowest organizational unit that requires a full
Income Statement. All actual and plan revenues are managed at the Profit Center level. Actual
and plan costs are managed at the Cost Center level, and, through the assignment of one or
many Cost Centers to a Profit Center, an income statement can be produced.
Use Profit Center assessments or distributions to allocate actual and plan revenues between
Profit Centers. Costs may be allocated between Profit Centers; however, this may be
considered a “top side” adjustment because an allocation between Profit Centers will not be
reflected in the assigned Cost Centers.
Plan revenues in Profit Centers. Again, plan costs can be reported here if a Cost Center is
assigned. Unlike Cost Centers, a Profit Center is active for all Company Codes assigned to a
Controlling Area
Change of Profit Center: - The Enterprise contains Profit Centers at the lowest organizational
unit that requires a full Income Statement. All actual and plan revenues are managed at the
Profit Center level. Actual and plan costs are managed at the Cost Center level, and, through
the assignment of one or many Cost Centers to a Profit Center, an income statement can be
produced.
Profit Center assessments or distributions are used to allocate actual and plan revenues
between Profit Centers. Costs may be allocated between Profit Centers; however, this may be
considered a “top side” adjustment because an allocation between Profit Centers will not be
reflected in the assigned Cost Centers.
Plan revenues in Profit Centers. Again, plan costs can be reported here if a Cost Center is
assigned. Unlike Cost Centers, a Profit Center is active for all Company Codes assigned to a
Controlling Area.
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Display of Profit Center: The Enterprise contains Profit Centers at the lowest organizational
unit that requires a full Income Statement. All actual and plan revenues are managed at the
Profit Center level. Actual and plan costs are managed at the Cost Center level, and, through
the assignment of one or many Cost Centers to a Profit Center, an income statement can be
produced.
Profit Center assessments or distributions are used to allocate actual and plan revenues
between Profit Centers. Costs may be allocated between Profit Centers; however, this may be
considered a “top side” adjustment because an allocation between Profit Centers will not be
reflected in the assigned Cost Centers.
Plan revenues in Profit Centers. Again, plan costs can be reported here if a Cost Center is
assigned. Unlike Cost Centers, a Profit Center is active for all Company Codes assigned to a
Controlling Area.
Gap Analysis
-- NIL --.
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A. SBU
B. Divisions.
Creation of Standard Hierarchy/Group: - All profit centers must be assigned to the profit
center standard hierarchy. This profit center standard hierarchy is created during the initial
configuration of the SAP system. The standard hierarchy is defined with various nodes at the
top level. Additional nodes and sub-nodes may be added to this profit center standard hierarchy
as required.
The standard hierarchy is a profit center group, or tree structure, which contains all the profit
centers in one controlling area. The standard hierarchy usually corresponds to the
organizational structure used in Profit Center Accounting.
The standard hierarchy consists of two types of nodes:
A profit center area is an end node in the structure which is not the top node. You can
only assign your profit centers to the end nodes of the structure.
A summarization area groups together profit center data at a higher level. Each node of
the standard hierarchy which is not an end node is a summarization area. You cannot
assign profit centers directly to a summarization area. It merely groups together the
profit center areas and summarization areas which lie below it.
In addition to the standard hierarchy for your controlling area, you can also create alternative
profit center hierarchies -- so-called "profit center groups" -- for use in the information system,
allocations and planning.
In contrast to the standard hierarchy, these profit center groups do not have to contain all the
profit centers in the controlling area. On the contrary, profit center groups let you select only
certain profit centers and reorganize them to allow you more flexibility.
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Gap Analysis
-- NIL --
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SAP distinguishes between planning and budgeting. In SAP, planning is the bottom-up process
of determining the level of expenses for each item of expenditures. Budgeting is the top-down
process of setting the level of allowable expenditures for the cost center. Planning is by
individual account codes (cost elements). Budgeting is in total and at cost center level.
SAP assists in the monitoring of the plan and budget. Hence all plan items are entered into the
system. These planned items can then be cross allocated among the cost centers and internal
orders in Controlling. The allocation rules for these cost centers and internal order costs can be
set-up in the system to be applied consistently over the period of plan and among cost objects.
At BEL, SAP will be set-up to support the planning and budgeting for the cost centers, profit
centers, activity types and internal orders.
BEL proposes to capture plan and budget figures at individual cost center and profit center
levels as well as at individual cost element level for planning. They would like to use Excel to
simulate and finalize the plan and budget figures and then upload the same into SAP. They
would also like to directly do planning and budgeting in SAP by using previous year figures,
whenever necessary.
Planning for each of these items is entered using input screens. These input screens are
controlled by the planner profile. There is a generic profile SAPALL that can be used to plan for
all these items. BEL intends to use the standard input screens as provided by the SAP system.
The plan can be inputted into the SAP system manually, copied from historical data and re-
valued or prepared in an external spreadsheet and uploaded to the system.
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Step Ref Procedures T.Code Input Output
1 CO-14-01 PREPARE INITIAL KP04 Plan and Set planner
To PLAN: budget profile
CO-14-05 assumptions
Set planner profile
2 Change statistical key KP46/7KE5/ Statistical key Allocation of
figures planning in CCA. KP46 figures, Plan Overheads to
Version, Cost cost centers
centers, Profit
centers
3 Change cost element / KP06 Plan Version, Changes in
activity input planning Cost centers, activity input
Profit centers, plan
Cost Elements.
4 Change activity type / KP26 Plan Version, Using Activity
activity price planning Cost centers, types
Profit centers,
Cost Elements,
Activity types
5 Change cost element / KP06 Plan Version, Changing cost
activity input planning Cost centers, elements/
Profit centers, activity types
Cost Elements,
Activity types
6 Change overall planning KO12 Plan version, Over all plan
Internal orders Changed
7 Change cost/revenue KPF6 Plan Version,
element planning Cost centers,
Profit centers,
Cost Elements,
Activity types
9 Copy planning KO14 Historical Plan Copying plan
Data
12 Create plan revaluation KPU1 Historical Plan Plan
Data revaluation
13 Plan revaluation KSPU SKF, Activity Initial plan
types prepared
Gap Analysis
-- NIL --
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The draft plan reports printed from work steps (1) and (2) are reviewed to identify error and
adjustments.
If no errors are detected and no adjustments are required, then the cost allocations of these
planned cost center costs and internal order costs can commence.
If errors are found, then the original plan entry needs to be changed.
If there are many errors/changes, then the changes can be prepared in a spreadsheet and
uploaded to the SAP system using the plan uploads programs provided. If there are only few
changes, then the changes can be entered directly into the system
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Gap Analysis
-- NIL --
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The re-posting of costs, distribution and assessment of costs and revenue are similar except
that cost (revenue) assessment uses an assessment cost element to record the allocation of
costs (revenue) whereas cost re-posting and cost (revenue) distribution uses the original cost
elements to record the allocation of costs (revenue). The difference between cost re-posting and
cost distribution is that the partner object is not captured in cost re-posting.
The activity independent cost center costs for activity type producing cost centers also need to
be allocated to the activity types of the cost center. This is supported by the cost center costs
splitting function of SAP.
It is recommended that:
a) Periodic re-posting be used as an aid to data entry
b) Assessment be used for allocation of cost center and profit center costs
c) Settlement with settlement cost element be used for internal order costs
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Step Ref Procedures T-code Input Output
1 Change cycle for planned periodic re- KSW8 Planned Changed
posting overhead periodic
details reporting
2 Execute planned distribution cycle for cost KSVB Cost centers Distribution to
center cost centers
3 Execute planned distribution cycle for 4KEB Profit center Distribution to
profit center profit centers
4 Change cycle for planned distribution for KSW8 Overheads Overheads
cost center details distributed to
cost centers
Change cycle for planned distribution for 4KE8 Overheads Overheads
profit center details distributed to
profit centers
5 Maintaining Costing sheet KZS2 Base value, Cost sheet
Surcharge
rate, Credit
objects,
Surcharge
cost elements.
6 Planned overhead calculation: cost KSP4 Cost center Cost center
centers wise overhead wise
details overheads
calculated
7 Plan overhead calculation: internal orders KGP2 Internal order Internal order
wise overhead wise overhead
details calculated
8 Cost settlement of planned internal order KO9E Planned Plan
costs (Individual processing) internal order settlement
costs
9 Create planned assessment cycle for cost KSU7 Assessment Planned
center cycle name, assessment
Validity period. cycle to cost
centers.
10 Create planned assessment cycle for 3KE7 Segment
profit center identifier,
Assessment
cost element,
Sender and
receiver
information,
statistical key
figures, activity
quantity and
costs.
11 Execute planned assessment cycle for KSUB Cycle Data Cycle Run
cost center
12 Execute planned assessment cycle for 3KEB Execution Cycle
profit center Processing
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13 Change cycle for planned assessment for KSU8 Cycle Data Cycle Run
cost center
14 Change cycle for planned assessment 3KE8 Cycle Data Cycle
cycle for profit center Processing
15 Splitting of cost center costs to activity Splitting rules, Splitting
types OKES structure
Cost
assignment to
splitting rules
Gap Analysis
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However there may be circumstances where this sequence is not followed. In all cases, (e) and
(f) should be the last two cost allocations.
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Gap Analysis
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Gap Analysis
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This is an iterative process and may be re-processed until senior management is in full
agreement with the proposed plan. Multiple versions of the plan may be kept so as to keep track
of the changes made to the plan.
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Gap Analysis
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Copy planning: - In SAP, plan version ‘0’ is the active plan version. Hence the final cost center
plan has to be copied to plan version ‘0’.
The entry parameters are:
Source plan (version, plan period, and cost centers)
Target plan (version ‘0’, plan period and cost centers)
Budget planning: - Once the final cost center plan has been copied to version ‘0’, the allotted
budget can be entered against each cost center.
Copy plan version – Internal orders: - In SAP, plan version ‘0’ is the active plan version. Hence
the final internal order plan has to be copied to plan version ‘0’.
The entry parameters are:
Internal orders or internal order groups
Source plan (version and plan period)
Target plan (version ‘0’ and plan period)
Original budget: - Once the final internal order plan has been copied to version ‘0’, the allotted
budget can be entered against each internal order.
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Gap Analysis
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In most cases the cost allocation methods used for the cost objects are the same for the
planned and actual costs. Indeed the same cost allocation template may be used on both the
planned and actual costs. However there is no restriction in the SAP system to enforce the
same cost allocation method for the planned and actual costs in the cost objects. Nevertheless,
using different cost allocation methods on the planned and actual costs will make cost
comparison between planned and actual difficult and inconsistent.
Cost allocations are the transfer of costs among cost centers and internal orders. SAP provides
the following functions to assist in the cost allocations of cost center and internal order costs
Periodic re-posting of cost center and internal order costs
Distribution of cost center costs
Overhead surcharging of cost center and internal order costs
Settlement of internal order costs
Assessment of cost center costs
The activity independent cost center costs for activity type maintenance cost centers also need
to be allocated to the activity types of the cost center. This is supported by the cost center cost
splitting function of SAP.
Sender cost centers and their corresponding receiver cost centers have to be identified
and allocation rules need to be defined and frozen.
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It is recommended that:
Periodic re-posting be used as an aid to data entry
Assessment be used for allocation of cost center costs
Settlement with settlement cost element be used for internal order costs
This function is typically used for entry of utility charges, telephone and insurance.
Periodic re-posting can only be used to re-post primary costs.
The entry parameters are:
Periodic re-posting cycle name
Validity period
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Step Ref Procedures T. Code Input Output
1 Create cycle for actual periodic re- KSW1 Periodic re-posting Allocation
posting cycle name, Cycle
Validity period
2 Execute actual periodic re-posting KSW5 Posting Data Periodic Re-
Posting
3 Change cycle for actual periodic re- KSW2 Cycle Data All errors &
posting Adjustments
Update to
Step 2
4 Cost distribution of actual cost center KSV1 Distribution cycle Creation of
costs name, actual
Validity period distribution
cycle
5 Execute actual distribution cycle KSV5 Test run for Step 4 Ensuring no
Errors
6 Change cycle for actual distribution KSV2 Error details Clearing the
errors found
in Step 5
(If any)
7 Overhead surcharging for cost centers KS02 Updating Changing
and internal orders costs Overhead rate in cost center
cost center
8 Change internal orders KO02 Updating the ‘Costing
sheet’ field in the
. internal order master.
9 Actual overhead calculation: cost KSI4 Test run for errors Error
centers in cost centers detection
10 Actual overhead calculation: internal KGI2 Test run for errors Error
orders in Profit centers detection
11 Maintain costing sheet KZS2 Over head details Cost Sheet
12 Cost settlement of actual internal KO02 Actual settlement, Changing
order costs Settlement, receivers, internal order
Tracing factor,
Validity period
Settlement type
13 Actual settlement (Individual KO8 Settlement rules Updating
processing) Settlement
rules
14 Change internal order KO02 Internal Order Re-tested
Information after
Updating
Settlement
rules
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Gap Analysis
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However there may be circumstances where this sequence is not followed. In all cases, (e) and
(f) should be the last allocation cycles.
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You can use Product Cost Planning to break down the costs of your company’s products, such
As
Manufactured materials.
Services
Other intangible goods
Cost Estimate with Quantity Structure Costing materials that have access to a
quantity structure in PP
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Easy Cost Planning and Execution Services Rapid cost planning without master data within
an ad hoc cost estimate
In order to carry out costing, Product Cost Planning accesses master data in other components,
such as BOMs, routings, and work centers from Production Planning, and cost centers, activity
types, and business processes from Overhead Cost Controlling. Conversely, you can make the
costing results available for other applications. For example, you can use the costing results to
update the standard price in the material master and carry out material valuation using this
price.
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You can use the costing run to process mass data. It enables you to cost, mark, and release
more than one material at the same time.
Every processing step involved in costing with quantity structure is performed by the costing
run, from the same screen.
The cost of the material can be created for a number of reasons including margin analysis,
make-buy decisions, and profitability analysis are among the most common. The costing view
identifies values by material, activities and cost elements. The cost estimate with quantity
structure enables you to calculate the non-order-related cost of goods manufactured and the
costs of goods sold for products, based on the BOMs and routing in the Production Planning
module. The system creates a quantity structure, which is the BOM and routing combination,
using data from the PP master data. You determine what data is selected for costing by means
of the costing variant in Customizing for Product Cost Planning. The system valuates the
quantity structure based on the valuation variant contained in the costing variant in Customizing.
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Gap Analysis
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