Explaining Period-End Closing Maintenance Orders (BF7)

Period End Closing - Maintenance Orders

Period End closing is the activity in which the cost incurred on the maintenance orders is settled to the actual receivers for Financial reporting.

Settlement of Maintenance Order Costs

The actual costs that arise from performing maintenance work (for example, costs for material, personnel, or external services) are initially collected in the maintenance order. However, the maintenance order cannot be a permanent cost object for accounting purposes. Instead, the incurred costs must be transferred to the relevant target cost objects.

Context

During order settlement, costs resulting from goods issues of stock components, goods receipts of non-stock components, time confirmation postings, accepted service entry sheets, as well as captured overhead costs are transferred from the maintenance order to the relevant settlement receivers on a regular basis during the execution and/or after the completion of the maintenance work. Thereby the costs collected on the maintenance order are transferred to the target accounting objects and the balance on the order becomes zero.

Different cost objects are available as settlement receivers for the maintenance order. Commonly, the cost center of the reference object serves as settlement receiver, but costs can also be settled to a WBS element or to a fixed asset.

Depending on the order type, a maintenance order may need to be fully settled to allow the business completion and closing of the order. In the case of parallel accounting where costs are recorded in different ledgers, the settlement must be executed for each ledger individually to fully settle the order.

Settlement Profile

The parameters for order settlement are determined in the settlement profile for the respective order type. For example, the settlement profile defines which settlement receivers can be used for settling a maintenance order. You can view and maintain the settlement profiles for maintenance orders in your configuration environment.

Settlement Rule

Within a maintenance order, a settlement rule must be created to settle the maintenance order financially and thereby define how the costs incurred by the execution of maintenance work are cleared on a pro rata basis.

Execution of the Order Settlement

Once actual costs have been collected on the maintenance order, the costs can be settled to the relevant receivers. Once the order is fully settled, the balance on the order becomes zero. If you use parallel accounting, the balance on the order only becomes zero when the costs have been fully settled for all relevant ledgers.

The status of the order settlement can have an impact on the business completion of the order. This is determined by the settlement profile of the relevant order type:

• The settlement profile determines that actual costs must be settled in full

  This is the default configuration for all order types that are processed according to phases. In this case, an order must be fully settled for all relevant ledgers before the business completion can be performed and the order can be closed. If settlement has not been completed for all ledgers, an error message is raised when you try to close the order.

• The settlement profile determines that actual costs can be settledThis is the default configuration for all order types that are not processed according to phases. In this case, business completion can be performed even if an order has not been fully settled. As a consequence, it is possible that actual costs remain on the maintenance order. It is not possible to settle further costs on the maintenance order after it has been completed for business

Key Process Flow

• Settle Maintenance Orders
• Close completed orders
• Orders Actual data reporting

Business Benefits

• Processes Period-End Closing quickly
• Reports Efficiently