Configuring the Integration with Controlling in SAP S/4HANA

Settings for the integration with Controlling are relevant for any service transaction for which costs need to be collected. Examples are service orders, in-house repair orders, confirmations, and service contracts.

A first important setting concerns the so-called Controlling Type. This determines where costs and revenues are going to be posted in Controlling.

The controlling type (and also the controlling level: business transaction level or item level) are defined in Customizing for combinations consisting of a transaction type, a service organization, and a responsible service organization for a certain validity period.

There are three distinct controlling types available representing different scenarios in the Service-CO integration:

• Scenario S (Single-Object Controlling): An internal order is always created. This order can then be further settled to other CO objects (for example CO-PA).
• Scenario M (Mass-Object Controlling): A result object is always created and directly posted to this object (no settlement required).
• Scenario T (Controlling for Account Assignment Object): An already existing CO object is directly assigned within the service document. This object must already exist (e.g. a sales order, cost center, WBS element, internal order). Depending on the situation, it may or may not require further settlement.

Each scenario has its advantages and disadvantages, tailored to individual customers' requirements. Thus, SAP does not issue specific recommendations; instead, each customer must decide which scenario best suits their needs. Important considerations include whether to initially collect costs and revenues, whether additional distinctions are necessary, and whether the characteristic derivation in CO-PA is sufficient in scenario M (Mass-Object Controlling). One must also consider if a CO object already exists (for instance a sales order) from which a subsequent (installation) service order may need to be created, etc.

If the costs and revenues from a business transaction need to be assigned directly to a profitability segment, and then analyzed immediately in Controlling-Profitability Analysis (CO-PA), Mass-Object Controlling needs to be used.

A profitability segment is an object within Controlling-Profitability Analysis (CO-PA) to which costs and revenues are assigned. It corresponds to a market segment. It is possible to calculate the profitability of a profitability segment by comparing its sales revenues with its costs.

Characteristics of Mass-Object Controlling include:

• Costs and revenues are assigned directly to a profitability segment.

• Analysis of goods sold and revenues can be done immediately in Controlling-Profitability Analysis (CO-PA) with original SAP S/4HANA Service attributes, for example, service organization and/or product category.

For Single-Object Controlling, the planned and actual costs and revenues of business transactions can be reported and analyzed in SAP S/4HANA Service. In contrast to mass-object controlling, with single-object controlling, it is possible to analyze the data of each individual transaction and its follow-up documents.

Characteristics for Single-Object Controlling include:

• Controlling is done by service order or by service contract.

• Cost and revenues are assigned to an internal order, using the document type CRM Service (SAPS).

  Note

  The text for this bullet point is relevant for releases of SAP S/4HANA older than release 2023. And also for SAP S/4HANA systems of other releases (like 2023) where item-based accounting has NOT been switched on.

• Overheads and process costs can be applied.

• Results analysis is available.

• Settlement of costs and revenues to Controlling-Profitability Analysis (CO-PA) or other recipients is supported.

• If settlement of costs and revenues to Controlling-Profitability Analysis (CO-PA) is used, an aggregated analysis on SAP S/4HANA Service attributes is possible.

• Original SAP S/4HANA Service attributes are available on the internal order.

  When Single-Object Controlling is used, whenever a service transaction is created in SAP S/4HANA Service, an internal order with order type CRM Service (SAPS) is generated automatically. The profit center is selected based on the following sequence:

  • Through a customer enhancement that includes SAP S/4HANA Service characteristics.

  • Through profit center substitution. See Customizing under SAP Customizing Implementation Guide→Integration with Other SAP Components→Customer Relationship Management→General Settings→Settings for Profit Center Accounting→Define Substitution Rules for CRM Processes.

  For testing purposes, as a last step in the determination sequence for a profit center, a dummy profit center can be used. In a live system, using a dummy profit center should be avoided.

  Note

  The text for this bullet point is relevant for releases of SAP S/4HANA older than release 2023. And also for SAP S/4HANA systems of other releases (like 2023) where item-based accounting has NOT been switched on.

For Single-Object Controlling, a so-called Controlling Scenario needs to be defined, containing various parameters required. The following are examples of these parameters:

• Costing sheet

• Overhead key

• Results analysis key

• Settlement profile

• Object class

• Functional area

Actual costs are posted (for example to the internal order if item-based accounting has NOT been switched on) when service confirmations are entered, or in the case of sales items, when the goods issue is entered for the delivery. Revenues are posted through Billing in SAP S/4HANA.

The following is an overview of the required configuration steps to set up the integration between SAP S/4HANA Service and Controlling (based on Single-Object Controlling and with item-based accounting NOT switched on):

1. For the purpose of collecting the costs that are incurred when a service process is executed, an internal order is automatically created. As stated before, the document type CRM Service (SAPS) is always used for this internal order.

   The configuration of the document type for the internal order can be found using SAP Customizing Implementation Guide→Controlling→Internal Orders→Order Master Data→Define Order Types.

2. The characteristics of the service processes (contracts, orders, and confirmations) that are being used need to be replicated to Controlling. This step needs to be repeated whenever new service objects (transaction types, item categories, organizational units, service types, valuation types, or product categories) have been created in the system.

   In Customizing, navigate to SAP Customizing Implementation Guide→Service→Transactions→Settings for Service Transactions→Integration→Replicate Service Characteristics Relevant to Controlling.

3. For Single-Object Controlling, a Controlling Scenario needs to be defined. This is a summary of all the parameters used for single-object controlling (for example, a Settlement Profile). A default scenario that is available is scenario SAPCRM (CRM-CO Integration).

   In Customizing, navigate to SAP Customizing Implementation Guide→Integration with Other SAP Components→Customer Relationship Management→Settings for Service Processing→Controlling Integration→Settings for Single-Object Controlling→Create and Change Controlling Scenario.

   Note

   More Controlling-specific configuration is required here; an example setting is the maintenance of a settlement profile in Customizing: SAP Customizing Implementation Guide→Controlling→Internal Orders→Actual Postings→Settlement→Maintain Settlement Profiles.

4. Next, the controlling type, level, and controlling scenario (if required) need to be established. This is done for a combination of a transaction type, a service organization, and the responsible service organizational unit, for a certain validity period.

   In Customizing, navigate to SAP Customizing Implementation Guide→Integration with Other SAP Components→Customer Relationship Management→Settings for Service Processing→Controlling Integration→Establish Controlling Type, Controlling Level, and Controlling Scenarios.

5. For profit center accounting, substitution rules for CRM processes need to be defined. Substitution rules are used to determine how a certain profit center is derived for a service document item.

   Navigate to SAP Customizing Implementation Guide→Integration with Other SAP Components→Customer Relationship Management→General Settings→Settings for Profit Center Accounting→Define Substitution Rules for CRM Processes.

6. For profit center accounting, the defined substitution rules for CRM processes need to be assigned to the respective controlling areas used.

   Navigate to SAP Customizing Implementation Guide→Integration with Other SAP Components→Customer Relationship Management→General Settings→Settings for Profit Center Accounting→Assign Substitution Rules for CRM Processes.

The following settings are required to post costs and revenue for service items (service product items):

• Replicate the required activity types in Customizing. Navigate to SAP Customizing Implementation Guide→Service→Transactions→Settings for Service Transactions→Integration→Replicate Service Characteristics Relevant to Controlling.

• Navigate to SAP Customizing Implementation Guide→Integration with Other SAP Components→Customer Relationship Management→Settings for Service Processing→Time Sheet Integration.

  Assign an activity type to the item categories that are used for service confirmation items, and to the service types and/or the valuation types. The activity type is used to post the confirmed labor to the time sheet of the executing service employee and to the universal journal. You do this using the option Define Derivation of Attendance Type, Activity Type and Cost Element.

  You also need to enter the data entry profile that is used to transfer data from service confirmation items to the cross-application time sheet (CATS). You do this using the option Assign Data Entry Profile.

• Maintain the cost rates for the activity types that are used to post actual costs that have been incurred by the executing service employee. You do this using the option Change Activity Type/Price Planning - Change (transaction code KP26).
• Activate the derivation of profitability characteristics for postings with account assignment to service orders and service contracts. Navigate to SAP Customizing Implementation Guide→Controlling→Profitability Analysis→Master Data→Activate Derivation for Items without Profitability Segment.
  Note

  This setting is mandatory if you have implemented Service with Advanced Execution.

The following standard item categories for service orders are supported for EBRR:

• Service items:

  • SRVP for service items

  • SBOS for service items with ad-hoc billing

  • SFOS for fixed price service items

• Service part items:

  • SRVM for service part items

  • SBOM for service part items with ad-hoc billing

  • SFOM for fixed price service part items

• Expense items:

  • SRVE for expense items

  • SBOE for expense items with ad-hoc billing

  • SFOE for fixed price expense items

Before you can start working with the functions of EBBR, you need to configure it. As an example, the following is a list of configuration steps that are needed for EBRR for service orders:

• Define revenue recognition keys:

  SAP Customizing Implementation Guide→Controlling→Product Cost Controlling→Cost Object Controlling→Product Cost by Sales Order→Period-End Closing→Event-Based Revenue Recognition→Maintain Settings for Event-Based Revenue Recognition→folder Recognition Keys

• Revenue recognition key determination (using service order item categories, company codes, and materials):

  SAP Customizing Implementation Guide→Controlling→Product Cost Controlling→Cost Object Controlling→Product Cost by Sales Order→Period-End Closing→Event-Based Revenue Recognition→Derivation of Recognition Key for Service Documents

• Define the revenue recognition method to be used:

  SAP Customizing Implementation Guide→Controlling→Product Cost Controlling→Cost Object Controlling→Product Cost by Sales Order→Period-End Closing→Event-Based Revenue Recognition→Maintain Settings for Event-Based Revenue Recognition→folder Recognition Keys→sub-folder Company Code and Accounting Principle Settings

• Select the source for the plan values (for method 3 (cost-based POC)):

  SAP Customizing Implementation Guide→Controlling→Product Cost Controlling→Cost Object Controlling→Product Cost by Sales Order→Period-End Closing→Event-Based Revenue Recognition→Maintain Settings for Event-Based Revenue Recognition→folder Recognition Keys→sub-folder Company Code and Accounting Principle Settings

• Set the billable determination method (for example, No IFRS15 processing):

  SAP Customizing Implementation Guide→Controlling→Product Cost Controlling→Cost Object Controlling→Product Cost by Sales Order→Period-End Closing→Event-Based Revenue Recognition→Maintain Settings for Event-Based Revenue Recognition→folder Recognition Keys→sub-folder Company Code and Accounting Principle Settings

• Manual maintenance of the application jobs (only needed if using EBRR without the SAP pre-delivered content):

  Transaction SM30, table APJ_C_SCOPE with the revenue recognition application jobs SAP_FIN_PECRUN_SVD and SAP_FIN_PECRUN_REV_OP

• Settings for the integration with Controlling are relevant for any service transaction for which costs need to be collected.
• The controlling type determines where costs and revenues are going to be posted in Controlling: S (Single-Object Controlling), which uses an internal order, M (Mass-Object Controlling), which uses a result object and does not require settlement, and T (Controlling for Account Assignment Object), where an already existing CO object is directly assigned within the service document, and further settlement may be required.
• You can use item-based accounting to record costs and revenue (that have been incurred by service transaction items) directly on/for these items without using an internal order. Item-based accounting needs to be switched on in Customizing.
• Revenue recognition is supported for service transactions associated with service documents: service contracts, service orders, and service orders with advanced execution. This is known in SAP S/4HANA Service as Event-Based Revenue Recognition (EBRR). You need to configure EBRR before it can be used.