Sap Co

Controlling (CO)
PRAKASH
Learning SAP CO
Agenda
Overview on SAP Controlling
Business process under Overhead cost accounting
Business process under Product costing
Business process under Profitability analysis
Course Content
Roadmap
& Job Opportunities
Q&A Session
Exclusive Course designed for Basic and Advanced SAP CO Consultants
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Learning SAP CO
Controlling provides you with information for management decision-making.

It facilitates coordination, monitoring and optimization of all processes in an
organization.
This involves recording both the consumption of production factors and the
services provided by an organization.
As well as documenting actual events, the main task of controlling is planning.
You can determine variances by comparing actual data with plan data.
These variance calculations enable you to control business flows.
Income statements such as, contribution margin accounting, are used to control
the cost efficiency of individual areas of an organization, as well as the entire
organization.
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Integration
Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system.
The data flow between the two components takes place on a regular basis.
Therefore, all data relevant to cost flows automatically to Controlling from Financial
Accounting. At the same time, the system assigns the costs and revenues to different CO
account assignment objects, such as cost centers, business processes, projects or orders. The
relevant accounts in Financial Accounting are managed in Controlling as cost elements or
revenue elements. This enables you to compare and reconcile the values from Controlling and
Financial Accounting.
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Features
Cost Element Accounting (CO-OM-CEL)
Cost Center Accounting (CO-OM-CCA)
Internal Orders (CO-OM-OPA)
Product Cost Controlling (CO-PC)
Profitability Analysis (CO-PA)
Profit Center Accounting (EC-PCA)
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Cost Element Accounting is the area of cost accounting where you track and structure the costs incurred during
a settlement period. It is thus not an accounting system as such, but rather a detailed recording of data that
forms the basis for cost accounting.
Integration
In an integrated accounting system such as the SAP system, you do not need to enter cost data separately. This
is because each business transaction that involves costs updates the CO component with detailed information
on the cost element and on the account assignment object itself. Each consumption transaction in Material
Management (MM), each billing in Sales and Distribution (SD) (= revenue), and each external transaction for
invoice verification flows directly through the G/L Account (= cost element) to the corresponding account
assignment object.
Features
You can restrict the entry of cost data to part of the valuation differences and additional costs. While you can
transfer depreciation costs from Asset Accounting for the depreciation of fixed assets, for example, you must
use accrual calculation in cost accounting for management income.
Cost accounting in the system also has the task of identifying the costs incurred in subareas of the company
and tracing the cost flows. The system provides complete information on the costs for all types of account
assignment objects (such as cost centers, orders, and projects).
For cross-company-code or cross-business-area cost accounting, the cost flow in Controlling may require
reconciliation between internal and external accounting. The necessary reconciliation is also one of the tasks of
Cost and Revenue Element Accounting.
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Cost Center Accounting (CO-OM-CCA)
You use Cost Center Accounting for controlling purposes within your organization. The costs incurred by your
organization should be transparent. This enables you to check the profitability of individual functional areas and provide
decision-making data for management. This requires that all costs be assigned according to their source. However,
source-related assignment is especially difficult for overhead costs. Cost Center Accounting lets you analyze the
overhead costs according to where they were incurred within the organization.
Integration
The costs of each cost-accounting-relevant business transaction portrayed in the system through can be assigned
through Cost and Revenue Element Accounting (CO-OM-CEL) 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.
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Internal Orders (CO-OM-OPA)

Internal orders are normally used to plan, collect, and settle the costs of internal jobs and tasks. The SAP system enables
you to monitor your internal orders throughout their entire life-cycle; from initial creation, through the planning and
posting of all the actual costs, to the final settlement and archiving:
Features
You can use master data to assign certain characteristics to your internal orders, which enables you to control which
business transactions can be used with the internal order.
Internal order planning enables you to roughly estimate the costs of a job before the order starts and to make an exact
calculation at a later date. You can choose between various planning approaches to compare the effectiveness of different
methods.
You can assign and manage budgets for internal orders.
You apply the actual costs incurred by a job to your internal orders using actual postings. In Financial Accounting, you
can assign primary cost postings (such as the procurement of external activities and external deliveries) directly to
internal orders.
In period-end closing you can use various different allocation methods (for example, overhead costing) to allocate costs
between different areas of Cost Accounting.
Order settlement enables you to transfer the costs incurred by an order to the appropriate receivers.
The information system for internal orders enables you to track planned and assigned costs on your orders in each stage
of the order life-cycle.
You can archive internal orders that you no longer require. See Archiving.
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Product costing
Product Cost Planning
Cost Object Controlling (CO-PC-OBJ)
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Product Cost Planning

Product Cost Planning(CO-PC-PCP) is an area withinProduct Cost Controlling(CO-PC) where you
can plan costs for materials without reference to orders, and set prices for materials and other
cost accounting objects.
You can useProduct Cost Planningto analyze your product costs, such as for:
Manufactured
materials
Services
Analyzing product costs helps provide answers to questions such as:

What
is the value added of a particular step in the production process?
What
proportion of the value added can be attributed to a particular organizational unit?
What
are the material, production, and overhead costs?
How
Can
can production efficiency be improved?

the product be sold at a competitive price?
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Cost Object Controlling (CO-PC-OBJ)
Cost Object Controllingis an area in cost accounting that assigns the

costs incurred in the production of company activities (such as materials
manufactured in-house) to those activities. It supports you in:
Reaching make-or-buy decisions
Determining price floors
Performing complex cost analysis (such as target/actual analysis)
Determining inventory values
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Structure
Cost Object Controllingis divided into the following components:
Product
Cost by Period
This component is used for recurring periodic cost control of products that are manufactured in
the same way over an extended period of time.
Product
Cost by Order
This component is mainly used to analyze the costs of individual production lots.
Product
Cost by Sales Order
This component lets you collect and analyze costs in complex make-to-order production or for
customer-specific services.
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Profitability Analysis (CO-PA)

Profitability Analysis (CO-PA) enables you to evaluate market segments, which can be
classified according to products, customers, orders or any combination of these, or strategic
business units, such as sales organizations or business areas, with respect to your companys
profit or contribution margin.
The aim of the system is to provide your sales, marketing, product management and corporate
planning departments with information to support internal accounting and decision-making.
Two forms of Profitability Analysis are supported: costing-based and account-based.
Costing-based
Profitability Analysis is the form of profitability analysis that groups costs and
revenues according to value fields and costing-based valuation approaches, both of which you
can define yourself. It guarantees you access at all times to a complete, short-term profitability
report.
Account-based
Profitability Analysis is a form of profitability analysis organized in accounts

and using an account-based valuation approach. The distinguishing characteristic of this form
is its use of cost and revenue elements. It provides you with a profitability report that is
permanently reconciled with financial accounting.
You can also use both of these types of COPA simultaneously.
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Profit Center Accounting (EC-PCA)

The application EC-PCA lets you analyze internal profit and loss for profit centers. This makes it possible for you to
evaluate different areas or units within your company. You can structure profit centers according to region (branch
offices, plants), function (production, sales), or product (product ranges, divisions). Profit Center Accounting is a
component of the module Enterprise Controlling.
EC-PCA can be used by companies in any branch of industry (mechanical engineering, chemical, service industries
and so on) and with any form of production (repetitive manufacturing, make-to-order manufacturing, process
manufacturing). The profit-relevant data is displayed by period.
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Course Content
PRAKASH
Roadmap
&
Job Opportunities
Q & A Session
PRAKASH
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Controlling (CO)

& Job Opportunities

Controlling provides you with information for management decision-making.

Overview on SAP Controlling

Overview on SAP Controlling

Internal Orders (CO-OM-OPA)

Product Cost Controlling (CO-PC)

Profitability Analysis (CO-PA)

Profit Center Accounting (EC-PCA)

Overview on SAP Controlling

Overview on SAP Controlling

Cost Center Accounting (CO-OM-CCA)

Overview on SAP Controlling

Internal Orders (CO-OM-OPA)

Overview on SAP Controlling

Overview on SAP Controlling

Product Cost Planning

Analyzing product costs helps provide answers to questions such as:

is the value added of a particular step in the production process?

proportion of the value added can be attributed to a particular organizational unit?

are the material, production, and overhead costs?

can production efficiency be improved?

Overview on SAP Controlling

Cost Object Controlling (CO-PC-OBJ)

Cost Object Controllingis an area in cost accounting that assigns the

Determining price floors

Performing complex cost analysis (such as target/actual analysis)

Determining inventory values

Overview on SAP Controlling

Cost by Sales Order

Overview on SAP Controlling

Profitability Analysis (CO-PA)

Profitability Analysis is a form of profitability analysis organized in accounts

Overview on SAP Controlling

Overview on SAP Controlling

Profit Center Accounting (EC-PCA)

Overview on SAP Controlling

Overview on SAP Controlling

Overview on SAP Controlling

Overview on SAP Controlling

Overview on SAP Controlling

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