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Controlling

Overhead Cost Controlling (CO-OM)

The interface between Financial Accounting and Controlling is called Cost Center Accounting and Cost Element Accounting. The G/L accounts serve as the basic element of Financial Accounting. G/L accounts are differentiated between balance sheet accounts (as balance sheet accounts) and income statement accounts (as income statement accounts). Each posting is assigned to the general ledger account. The general ledger account flows directly into the income statement or balance sheet. Each account is assigned within a separate chart of accounts. The chart of accounts is used to classify and enter financial transactions within Financial Accounting. It also contains the accounts for postings in Financial Accounting. Cost elements are managed within Controlling in the same way as G/L accounts. Within Cost Element Accounting, all transactions (postings) important for CO are monitored as cost and revenue elements. In some cases, the cost elements (as the first cost elements) are derived from the G/L accounts in Financial Accounting as actual costs/revenues. Cost elements are used as posting accounts in both externally assigned and internal accounting. They show the way in which costs were incurred. Cost centers point to the place where the costs were incurred. They are often based on the organizational structure of a company. They have the task of merging costs incurred. They also represent areas of responsibility within a company. In this way, the costs incurred are distributed among the individual areas of the company, depending on the source of the costs.

Profit Center Accounting (EC-PCA)

Initially, Profit Center Accounting was an autonomous sub-module in Controlling - with its own settings and paths in the navigation. However, Profit Center Accounting became an area of Financial Accounting with the creation of the new general ledger in ERP Release 6.0.

First, you need to make settings in Customizing. Then you can use the profit center. The cost centers and master data have a very similar structure. You can only use the profit centers once you have created the master data.

Finally, you ensure that the entire profit and loss statement is divided up by profit center by always assigning the important account assignment objects to the respective profit center. The profit centers then run autonomously and in the background as statistical account assignment objects. Each posting to an account assignment object that is assigned to a profit center is therefore documented in this profit center.

Product Cost Controlling (CO-PC)

The costs of individual products are analyzed in Product Cost Controlling (CO-PC). The cost analysis makes it clear how a cost estimate for material is used in actual production and how this material cost estimate is made up. What the most important questions of these tasks are:

  • Which cost factors make up a product?
  • What is the financial cost of manufacturing a product?
  • How are actual costs handled in production and how are these costs evaluated?

Profitability Analysis (CO-PA)

Important questions that controllers must ask themselves again and again from the start of the sale:

  • How much of the product is sold?
  • How much does it cost to sell a product - what part of the turnover does that make up?
  • How much turnover is generated with the product?
  • What is the contribution margin if the costs of the project are included?
  • How does the contribution margin change if the sales costs are also included?

The SAP module CO-PA (Profitability Analysis) is particularly suitable for answering these questions and should be used within Controlling to answer them.

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Thus, the latest release not only focuses on new, simplified table structures and the elimination of summary and index tables. Rather, functions and transactions are increasingly being simplified and unified, and old functions are gradually being replaced completely. We expect this development to continue and accelerate in 2016 and the coming years.

We would like to accompany you during the conversion to S/4 HANA.