Cost Objects Settlement
You can settle the following Cost-Objects with different values:
| Cost Objects | Values to be Settled |
|---|---|
| Internal Order, Project, Network, Sales Order | Cost, Revenue, Accrued Values |
| Production Order, Product Cost Collector | Cost Variances |
The use of internal orders and their relevance to Profitability Analysis (CO-PA) is as follows:
Internal orders and projects can be used to control the costs of an internal activity, such as the costs of an advertising campaign. The costs of the activity are posted to the order and collected there. At the end of the project, the activity costs are settled to the appropriate profitability segments, such as the product range and the sales area.
You can also use Management Accounting orders to calculate the anticipated values. This enables you to evaluate the accuracy of your accrual method. You can credit the accrual costs that are calculated in CO-PA to a special cost order for accruals. Currently, this can only be done manually. When the costs are actually incurred, they are posted to that order as well. Therefore, the difference between the anticipated costs and the actual costs are displayed at the order level.
Internal orders or projects can be used in make-to-order (MTO) manufacturing for services. If you are handling sales orders, a customer project, or a Management Accounting order to which revenue posting is allowed, you can post costs to the order or project. These include production costs and supply costs. You can also post revenue and sales deductions.
When the product is complete, the costs and revenues are settled to CO-PA. You can also transfer the accrued values that are particularly important for progress billing. However, an internal order and a project does not use bill of materials and routing, which might be necessary in manufacturing goods. For such a scenario, you must use a production order or process order.
Settling Orders: Customizing
When you create an order, specify an order type. The system uses this order type to determine which settlement profile and, as a result, which allocation structure and profitability analysis (PA) transfer structure to use.
In Margin Analysis, costs are settled to the settlement cost element specified in the settlement structure.
In costing-based CO-PA, costs are settled from the original cost elements to the value fields to which they are assigned in the PA transfer structure.
Settling Orders: Customizing and Structures
The PA transfer structure contains the assignment of costs and revenues to the value fields in costing-based CO-PA. PA transfer structures are used in order settlement, direct posting from Financial Accounting (FI), and internal activity allocations in Management Accounting.
A PA transfer structure consists of a number of different assignment lines. Each assignment line contains the assignment of one interval, a group of cost or revenue elements to the required value field.
Within the settlement to costing-based CO-PA, the fixed and variable costs are assigned to different value fields. Although such an assignment is not possible for the settlement to Margin Analysis, the settlement cost element contains separate values for fixed and variable costs. Use this in the definition of the report for the total value characteristic and the fixed value characteristic. To report the variable value, define a form that subtracts the fixed value from the total value.
For the successful settlement of orders, a PA transfer structure must meet the following criteria:
The assignment must be completely defined:
All cost and revenue elements that can receive costs or revenues must be assigned to a value field in the PA transfer structure.
The assignment must be unique:
Each cost or revenue element can occur only once within a PA transfer structure.
During settlement, the costs incurred under the primary and secondary cost elements by a sender are allocated to one or more receivers. When you settle by cost element, you settle using the original cost element.
An allocation structure consists of one or several settlement assignments. An assignment defines which costs are to be settled to which receiver type (for example, cost center or order). The origin of cost element groups is from debit cost elements.
The following options are the alternatives in allocation structure:
You can assign the debit cost element groups to a settlement cost element.
You can settle by cost element, which means that the debit cost element is the settlement cost element.