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Table of contents
1.Accounting in SAP, the modules. 2.The different results 3.Product costing 4.Reconciliation 5.Additional information
We focus in this paper on the accounting world. We consider again three major parts:
Financial Accounting (FI) Controlling (CO) Enterprise Controlling (EC)
Finance (FI)
In FI we post on balance sheet accounts and on profit and loss accounts. The organisational entity in which we work is the juridical company, called a company code. This module delivers legal, local information. We distinguish 4 major sub-modules:
General ledger (GL) Accounts receivable (AR) Accounts payable (AP) Asset accounting (AA)
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Controlling (CO)
The information that comes out of FI cannot serve as management information, the reporting level is too high. In CO we will focus on management reporting.
Each P&L posting in FI can come into CO. An account in FI will be a primary cost element in CO. In CO there is additional information needed on each cost element in order to gather management information. That additional information is a cost object. We post the cost element on the cost object. In CO we can further allocate between cost objects. This is done with secondary cost elements which are invisible in FI.
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Dependent of the nature of the cost/profit and the responsibility of the cost/profit the correct cost object will be triggered.
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Cost centres
Posting on a cost centre is done in order to:
Collect costs for further allocations within CO Collecting costs on a responsibility area
A cost centre is a stable organisational entity. It has no life cycle but remains in the system.
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Cost centres
Example of postings on a cost centre:
Report plan actual variance on cost centre
Machine in Mayen 103101303 in feb
Internal orders
An internal order is a cost object with a life cycle:
it is created, released, post, completed and deleted.
Internal orders
Reports on internal orders
Quite similar to the cost centre reports
Actual plan variance on group 0410 Budget actual commitments on 0350invest
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Internal Orders
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Cost Center
Overhead order
FI
That means that each cost object must have a link to one profit centre.
As this link is ascertained the posting sis PCA come in
Automatically On line In parallel
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The production costs will be visible at the debit side of all orders.
Material consumption via FI Labour costs via the routing: labour allocated from the machine CC to the PO (credit CC, debit PO via secondary cost element) Overhead via a costing sheet: credit the PRG cc , debit the PO via secondary cost element.
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All the POs and some production CC will be linked to the production profit centre. The production result will be fully visible there.
In CO it will be the combination of production cc and the POs that generates the production result.
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Relevancy of costs
Why the split between commercial, production and purchase result?
This is primarily a matter of relevancy of costs. A purchase price variance may not influence the sales performance, nor the production result. The production result may only be influenced by efficiency, because there is no price power. The production efficiency , on the other hand , is not at all relevant for sales performance. If we would integrate all results in one result we would see the same as in FI: no management information, no relevant information. We would only see data and figures, without being able to take correct decisions.
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Further results
There are other costs that are not relevant for sales, production or purchase.
So we leave them out of these results and make an own result for each of them. Non operational result: post on specific cost centres that are linked with the non operational profit centre. Group result: again specific group relevant costs are collected on specific cost centres that are linked with the group result profit centre. Other operational result: specific operational result but not production, sales or purchase relevant: specific cost centres linked to one profit centre.
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Further results
Revaluation result: when the standard price of a material is changed, the stock is re-valued. The P&L effect comes on specific cost centres linked to one profit centre. In that way it doesnt influence the other results. Result of idle capacity: The cost of overcapacity is left outside the production result.
When we invest 100 euro in a machine to make 1000 ton, but we make only 200 ton, then only 20 euro may be absorbed in the standard price. The remaining 80 euro is not the production responsibility and is reported separately as the result of overinvestment.
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Production result
PCP500, account group 500000
Others
Total company result in 0500
To be reconciled with FI
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3. Product costing
Product costing is a separate module in CO where the standard prices and other cost prices are calculated:
PPC1: standard cost estimate GPC1: group standard cost estimate ZFIF: FIFO based cost for balance valuation Other local tax based cost estimates
The module is not part of the CO closing and reporting flow but stands alone. The Ontex way of working in product costing is conceptually quite heavy.
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Product costing
The key for standard price calculation is the procurement type from the MRP view: E: EIGEN, meaning the plant produces the material. F: FREMD, meaning the plant purchases the material or transfers it from another plant. For EIGEN materials the system will explode BOM and ROUTING to obtain the standard production cost. For FREMD materials the material will take the current moving average (which is in fact the purchase price) as the standard. The standard PPC1 is calculated on material level per plant.
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6. Reconciliation FI CO - PCA
The FI result in statement ONGR, chart off accounts ONTX should equal the total PCA result.
The FI result gives an overview on cost nature base The PCA result gives the same result but on a responsibility base. Example Spain in feb
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7. Further documentation
The detailed work instructions for each transaction can be found on the intranet (document browser)
http://homer:8000/sapdoc/
Questions via helpdesk tickets Always mention the company code and / or plant you are working in, as well as the transaction or the report concerned.
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