Note
The Manage Allocations app can't be used for Internal Orders. So you will either have to use the SAP Easy Access transactions for Distribution (orders as receivers) and Assessment (orders as receivers) as well as for Periodic Reposting (Orders as senders and/or receivers) or the SAP Fiori HTML transaction apps Execute Actual Distribution Cycle - KSV5 or Execute Actual Assessment - KSU5.
The Manage Allocations app can't be used for Internal Orders. So you will either have to use the SAP Easy Access transactions for Distribution (orders as receivers) and Assessment (orders as receivers) as well as for Periodic Reposting (Orders as senders and/or receivers) or the SAP Fiori HTML transaction apps Execute Actual Distribution Cycle - KSV5 or Execute Actual Assessment - KSU5.
Internal orders are usually used as an interim collector of costs and an aid to the planning, monitoring, and reporting processes. When the task is complete, the costs are passed on to their final destination (cost center, WBS element, profitability segment, and so on). This process is called settlement.
In settlement, some or all of the costs posted to an order are allocated to one or more receivers. The offset postings, which credit the order, are generated automatically. You can process settlement for individual orders or collectively for a group of orders.
The costs gathered on an order can be settled on a variety of account assignment objects, as illustrated previously. Settlement to an asset or General Ledger account is an external settlement, because Financial Accounting is updated by the settlement. Settlement to one of the remaining objects is an internal settlement within Management Accounting.
You can settle statistically to a cost center, statistical order, or statistical WBS element in addition to the actual receivers.
Order settlement is not mandatory.
Before you can settle an order, you must specify where you want the costs to be posted to. There are two procedures for defining your settlement: basic settlement and extended settlement.
Basic settlement allows you to settle 100% of the costs to one cost center or to one G/L account under one cost element. You enter the data in Period End Closing on the order master record.
Extended settlement allows you to create your own settlement rules in the order master record. These settlement rules can be used to:
Settle costs to one or more receivers and allow a wide range of receivers (WBS element, profitability segment, and so on).
Specify how the costs are to be split (distribution rules).
In extended settlement, the settlement process is controlled using assignments in the settlement parameters on the order master record. These parameters include the settlement profile, settlement structure, PA transfer structure, and so on. The settlement profile, which specifies the default values for the other parameters, is derived from the order type. The default settlement parameters can be changed in the order master record.
A settlement profile must be specified in the master record even if you are using basic settlement. You must specify which receiver object types are to be permitted.
The central settlement control parameter is the settlement profile. The settlement profile is entered in the order type, ensuring that the order master record contains the correct default values. The settlement profile performs the following:
Determines whether settlement is required
Specifies valid settlement receivers and proposes these in the order master record (such as cost center) for the receiver
Sets settlement indicators, including the valid methods for apportioning costs
Defines document management parameters
Identifies the default values for the other settlement parameters on the order master record: the settlement structure, Profitability Analysis transfer structure, and the source structure.
The allocation structure controls how original cost elements are assigned to settlement cost elements. You also have the option of settling using the original cost element also exists.
The profitability analysis (PA) transfer structure controls how cost elements are assigned to value fields in costing-based profitability analysis. It is used only if you settle internal orders directly to Profitability Analysis.
The source structure controls settlement to different receivers depending on the original cost elements that were posted to the order.
You can enter the distribution rules in the Settlement Rule Overview screen. The distribution rule specifies which portion of the order costs should be settled to which receiver. Each line in the distribution table defines the allocation to a particular receiver. Costs can be allocated to the receivers based on the following:
% Settlement
Equivalence Numbers
Amount Settlement.
The SAP System ensures that you cannot create a rule containing both an amount as well as an equivalence number or a percentage. You can change the distribution rules within a settlement rule only if you assign different validity periods to them.
The following settlement types are defined in the system for overhead orders:
Settlement type Periodic Settlement settles only the costs for the period you specify.
Settlement type Full Settlement settles all costs on a sender object that have been incurred right up until the settlement period.
You can settle costs to receivers using the same cost elements you originally used to post your order. This allows you to identify precisely the types of costs that were allocated to your receivers, such as material, supplies, and personnel costs.
Alternatively, you can use a settlement cost element to allocate costs. With this approach, you can easily determine what costs have been allocated to the receivers in the order settlement process.
There are two categories of settlement cost elements:
An internal settlement cost element (cost element type 21) is used when you settle to a Management Accounting object such as a cost center, order, WBS element, and so on.
An external settlement cost element (cost element type 22) is used when you settle to an asset or a General Ledger account.
After settlement, the costs incurred on the order are still visible, regardless of which approach you select. This allows you to analyze and report on your order costs at any time.
Each time an object is settled, a settlement document is created. You define the number range for settlement documents during system configuration. To manage data volumes, you can define (in the settlement profile) the retention period after which the settlement document can be archived. To manage data volumes, you also define the retention period after which the settlement document can be archived in the settlement profile.
In addition to the settlement document, the system also creates:
A document in Financial Accounting containing all accounting-related data (external settlement only).
A document in Management Accounting containing purely cost accounting-related data.
The allocation structure allows you to define which cost elements should be settled using a settlement cost element or the original cost element. The setting you choose depends on the settlement receiver object.
This is a purely technical setting. It does not influence whether or how much of a cost element should be settled. This is defined by the source structure.
To use the allocation structure, you need to create cost element groups that contain the primary and secondary cost elements used for debit postings to your orders. In Customizing, you link the cost element group to the settlement structure with a settlement assignment. For each settlement assignment, you stipulate by receiver type whether the settlement will use the original posted cost elements or a designated settlement cost element.
You might use settlement cost elements:
To reduce data volumes by combining several debit cost elements under one settlement cost element.
To differentiate costs allocated from orders to the receiver and to describe their purpose, such as repairs or maintenance.
The source structure (also set in Customizing) enables you to settle cost element (groups) to receivers using different settlement rules, that is, the total debit for the order can be split up and settled within the relevant groups.
The debits in the internal order are structured in the source structure according to cost element.
To use the source structure, insert it into the settlement profile or activate it in the master data for internal orders.
You can settle every single line item in capital investment orders individually. If you do not want to settle each item individually, we recommended that you use a source structure.
In the source structure, you can combine the primary and secondary cost elements used for debit postings to your order into source assignments. You can then use the source assignments to allocate different types of costs to different receivers.
In our example, all material costs have been settled to one receiver order, but personnel costs have been split up and settled to two receiver cost centers.
You do not need a source structure if you want to settle all your cost elements according to the same rules. To use the source structure you defined in Customizing, enter the source structure in the settlement parameters of the order master record. Once you have made your selection, an additional column ("Origin Settlement") is displayed in the settlement rule. This allows you to enter a source assignment for each distribution rule and establish a different receiver for each source assignment.
The concept of the PA transfer structure is similar to the concept of the allocation structure.
The input side again consists of cost element intervals. All cost elements should be included in any interval to make settlement to a profitability segment possible.
The settlement side connects the cost element (intervals) with value fields in CO-PA. This is particularly important if you have orders with revenues and want to settle them to CO-PA using costing-based Profitability Analysis.
