Cost Planning and Cost Integration

As a project manager, John has been busy defining the structure of the project, performing the scheduling of the project and he has now almost finished looking for resources for his project. Bettina (who is the controller) would like to know the estimated costs of the project, now that most of the resources have been assigned. She asks John to provide her a detailed cost planning of the project. After this, John can receive the approval to execute the project.

John and Bettina already agreed to use an SAP Project System (PS) project with a Work-Breakdown-Structure (WBS) as the cost collector. Now John has to integrate his project with SAP Project System to be able to calculate the costs.

The following information is now required:

• An understanding of costing
• An understanding of how to check cost/revenue rates
• An understanding of the planning of costs in Project Management

SAP Project Management supports the integration of cost planning with Controlling in SAP S/4HANA. This integration usually takes place using multilevel controlling in SAP Project System (PS) to match the project structure. Single-object controlling using internal orders is also possible.

In the first case, all the costs for a project are collected in an SAP Project System project with a work breakdown structure (WBS), that matches the structure of the project or the project roles. The WBS elements are used as cost collectors. They are used to capture the planned and the actual costs of a project from SAP Project Management.

The automatic generation of the cost collectors is called the Transfer. The above figure shows the most important methods of integrating SAP Project Management with Controlling.

You can also manually assign a cost collector. To do this, you must first create a cost collector in SAP S/4HANA. The integration with Controlling can be started by setting the corresponding system status to transfer or through the assignment in the project definition.

If you use the integration with Controlling, you can start costing from SAP Project Management directly. You can save the costing in Controlling or in SAP Project System. You can display the cost planning in SAP Project Management.

Costing is based on the required capacity that is planned in SAP Project Management. You can calculate the required capacity based on the tasks or based on the project roles. You can use manual costing items such as material items to provide details about the costing. If you want to confirm activities using CATS, the actual effort is updated in the cost collector in SAP S/4HANA and the tasks or project roles of SAP Project Management.

What integration scenario is used, is determined via the project profile.

Cost/revenue rates are maintained in the costing view in resource planning. The cost and revenue rates were previously determined in Customizing for SAP Project Management. If the project roles are not yet staffed, the cost and revenue rates of the project roles themselves are used for the costing. If a project role is partially staffed by a resource, the partial cost and revenue rates are used for the costing.

The costing structure shows the results of costing in SAP Project Management. The data is saved in SAP Project Management. However, when the cost collector is generated by a transfer or is account-assigned to a project element or project role manually, the costing data is saved in the SAP accounting system. In this case, the system displays a Calculate button that you can choose to calculate the cost collector using Easy Cost Planning (ECP). ECP is a planning method in SAP that can also be used without SAP Project Management. However, it is the preferred method for Project Management to be able to calculate the costs resulting from the work in the project.

The term 'transfer' refers to the automatic creation of a cost collector. The cost collector may be a project with Work Breakdown Structure (WBS) elements or a single CO order. An alternative to the automatic creation of a cost collector is to use an already existing created cost collector before and assign it to the project for calculation. The transfer of a project with WBS is described here (multilevel controlling). However, this information also applies for single-level controlling.

The time of the transfer and the type of the generated cost collector depend on the project type. During the first transfer, the SAP system generates an internal order or WBS elements. The figure, Generated and Assigned Cost Collector in SAP Project Management - Detail Screen, shows the detail data of an automatically generated internal order as it is displayed in SAP Project Management.

The figure shows the project ID, which is determined depending on the system settings in SAP S/4HANA CO (Controlling). The project and the WBS are created with reference to organizational units in Controlling, such as controlling area, company code and business area. This data is required to create the project structure.

Occasionally, there can be errors when you transfer projects to the controlling system. These errors are documented in messages that you can analyze using the controlling cockpit. You can access the controlling cockpit in Project Management from the Accounting tab page.

A project with a work breakdown structure (WBS) in SAP S/4HANA is automatically generated during the transfer from SAP Project Management. If you change the corresponding data in SAP Project Management, the project and WBS are also changed during the next transfer. If the organizational assignment of the project definition is changed in SAP Project Management, the master data of the project and the WBS is also adjusted during the next transfer.

When performing multilevel controlling using a transfer, a project is created in SAP Project System (PS) depending on the status of the project in SAP Project Management. The number of objects in SAP Project System (PS) is based on the number of objects in SAP Project Management.

WBS elements that are created automatically during the transfer receive the status Master data locked (MDLK). This ensures that no inconsistencies arise between the project in SAP Project Management and the project in SAP Project System (PS).

You can also switch from automatic assignment to manual assignment. In this case however, the SAP Project System (PS) project and its work breakdown structure (WBS) is no longer updated automatically. It is not possible to switch back from manual assignment to automatic assignment.