Executing Period-End Closing Activities

At the beginning of the next month, Linda and James discuss the project activities required for period-end closing of the previous month.

You perform period-based business transactions as a part of the period-end closing procedure. This enables you to ensure that all the data belonging to a period is determined and made available to enterprise controlling.

The various period-end closing activities are the following:

• Overhead costing:

  Overhead costing is used to allocate the overhead costs (in terms of percentage or quantity-based overheads) for supplied materials, machines, and labor.

• Template allocation:

  Template allocation is another method for allocating overheads. This method does not allocate costs, but determines the quantities used by the receiver object. The costs are then calculated by valuating the quantities with a price that enables costs to be determined according to cause.

• Project calculation:

  Interest calculation plays an important role in long-running and cost-intensive projects. In the SAP Project System (SAP PS), planned and actual interest calculation can be used to calculate and update interest.

• Cost forecast:

  With cost forecasts, you can adjust cost planning to changing circumstances during the execution phase of a project. In a cost forecast, the system determines and valuates the remaining activities on the basis of the planned, forecast, and actual values in the network.

• Progress analysis:

  You use progress analysis to compare the planned and actual progress of a project based on actual results.

• Results analysis:

  Results analysis carries out a periodic valuation of projects. Data such as stock values, cost of sales, and reserves are calculated.

• Incoming orders:

  Using the project-related incoming orders function, the system determines key figures for incoming orders and open orders from sales orders assigned to projects. This enables you to draw conclusions at an early stage regarding the anticipated results of a customer project.

• Settlement:

  You use project settlement to allocate the costs and revenues in projects or allocate the results analysis data to one or more receivers.

Settlement rules are required to settle a project. These rules determine which portions of the sender’s costs are transferred to which cost receivers. Settlement rules are stored in the sender objects and contain distribution rules and settlement parameters. They are required to settle the project.

A typical scenario for an investment project is the settlement of the costs to an Asset Under Construction (AuC) or to an asset after completion.

You can create settlement rules manually in the Project Builder. For WBS elements, you can also use an app to determine the settlement rules automatically. Depending on predefined strategies, these transactions create settlement rules for cost centers or profitability segments, or they inherit predefined settlement rules.

When you settle your project, costs and revenues are transferred to Financial Accounting (G/L account), Asset Accounting (fixed asset), management accounting, or profitability analysis (order, cost center, and profitability segment), or the SAP Project System (WBS elements, networks, and activities).

For investment projects, WBS elements are normally settled to Assets under Construction (AuC). The Assets under Construction (AuC) are created automatically when WBS elements are released. This is controlled by the investment profile. Settlement rules prescribing settlement to Assets under Construction (AuC) can be generated automatically when the WBS elements are settled for the first time. When the project is technically closed, the WBS elements are settled to an asset master record, and the values are transferred from the Assets under Construction (AuC) to the asset itself.