Performing Cost Planning of External Activities and Costing Activities

External processes and services always involve a vendor and the purchasing process. During the planning stage, a planned price can be entered directly in the activity, or a reference can be made to a purchasing information record, which stores an agreed price for the purchase. The valuation variant determines if the price is selected from the information record or the activity planned price, based on the valuation strategy.

When procuring external services (outsourcing), you can create services or externally processed activities. For example, you can commission a freelance engineer to design and build a machine.

You can create invoicing plans directly for network activities (external, service, or general costs) or components procured externally.

Invoicing plans enable cost planning to consider the effect of partial payments over an extended period of time. This is the purchasing equivalent to a sales billing plan. Invoicing plans are used if you are purchasing as asset in support of your project, such as tooling for a new production assembly line, checkout terminals, or fixtures for a new retail location.

If the expense for an external activity or purchased component is not paid with a single invoice, you can create a detailed payment schedule using an invoicing plan. You can create invoicing plans directly for network activities (external service or general costs) or externally procured components.

It is possible to plan costs and outgoing payments on the basis of dates entered in the invoicing plan. Costs are not simply distributed over the activity duration, but are calculated precisely at the times specified in the invoicing plan.

You can create an invoicing plan manually or copy a reference invoicing plan. The reference invoicing plan aligns cost and payment dates relative to a start date.

You can also copy billing milestones (as dates) to the activity invoicing plan. If you copy milestones rather than manually creating them, you can adjust the dates in the invoicing plan if the activities are rescheduled.

You cannot create invoicing plans with unit costing (for general cost activities or material components).

The cost activity is a convenient way to plan costs that are not a direct work task. Examples include travel expenses, training expenses, miscellaneous costs for meetings, and project-related events. The actual expense is posted either by a creating a PO, entering a travel and expense report, or entering an accounts payable invoice.

You can use general cost activities to plan all other costs that cannot be mapped through internally processed activities or externally processed/service activities (for example, travel expenses for a meeting or transportation charges for freight). When expenses are later recorded through either travel and expense posting or accounts payable invoices, you can assign the general cost activity as the cost object.

In the general cost activity, you can enter a description, amount and currency, cost element, duration, and distribution key to distribute the costs.

Costs are distributed using the scheduled duration for general cost activity. Distribution is controlled using the distribution key for the activity. If a distribution key is not maintained, the system uses the SAP020 distribution key and costs are distributed evenly over the earliest dates in the activity.

You can create a unit cost plan for the general costs activity. Detailed costing is possible even at an early stage of the project, such as during the sales pricing phase.