Performing Settlement with a Source Structure

Objectives

After completing this lesson, you will be able to:

  • Maintain a source structure in the configuration, including defining the assignments and sources
  • Apply a source structure to the Settlement Profile or Settlement rule

Settlement with a Source Structure

It often happens that project managers have specific requests as they want to settle the various costs, primary and secondary, and revenues differently. An additional feature is necessary, such as the source structure, to be able to address this need. Therefore, you will learn more about the source structure that can be linked to the settlement profile of your project.

General Purpose

Utilizing a Source Structure allows you to accurately allocate costs and revenues depending on their origin. It controls the settlement to different receivers according to the original cost elements posted to the WBS element.

The source structure is complementary to the allocation structure that focuses on the way the WBS element postings will be settled (through an original G/L account or dedicated secondary settlement account).

The source structure is an optional feature. Inside, you can gather the primary and secondary cost elements used for debit postings to your project into source assignments. Then, it offers the possibility to create G/L account groups that will be handled differently in the distribution rules of the WBS element’s settlement rule.

Therefore, you need to create source assignments in the Manage Your Solution app in three main steps:

  1. Create a source structure.
  2. Define the assignments (subdivisions in which homogeneous accounts will be later gathered).
  3. Define the source for each assignment (range of accounts to be included in it).

In the previous figure, you can see how a source structure is configured. Here, the postings to be settled are differentiated into three subdivisions (assignments). Each of them is mapped according to its belonging to a group. For example, a posting on one of the G/L Account Personnel costs (Source) for a specific project will be submitted to Assignment 15 Personnel Costs. Later this specific assignment will determine which distribution rule will be applied.

Create a Source Structure

In the previous figure, you can see how a source structure is configured in the Manage your solution tile, Application area Finance, Sub Application area Overhead Cost Management, Period-End Closing item, configuration step 4-Create Source Structure.

Here are the steps to create a source structure:

Steps

  1. Select Configure for configuration step 4 Create Source Structure.

  2. In the source structure page, select New Entries.

  3. Enter a Structure Code and Description for the Source Structure.

  4. Select the Source Structure and double-click on the Assignments section in the dialog and double-click on the Source structure. Create Assignments using the New Entries button. Complete the Assignment code and text.

  5. Select the created Assignment in the assignments list section in the dialog structure.

  6. Insert new cost elements (range or group).

  7. Save the source structure.

  8. It is possible to add new Assignments. Therefore, double-click on the Assignments folder in the Dialog Structure and repeat from step 4.

    Note
    Copy As… after having selected the template is an alternative to Create a source structure.

Impact of a Source Structure on a Settlement Rule

In the following figure, you can analyze the impact of a source structure on the settlement rule. You can now use the source assignments to distinguish and allocate the different types of costs or revenues to different receivers with different methods.

An additional column (Source Assignment) is displayed in the settlement rule, as a trigger condition. On this basis, this allows you to enter a source assignment for each distribution rule and establish a different receiver for each source assignment, as well as a distinct distribution method (for example, different percentages).

The previous figure shows up the extra column in the settlement rule and its further allocation possibilities, once the source structure has been assigned.

Here, all postings to the project will be settled to cost centers. But Other Costs (including marketing expenses) will be split up and settled to two receiver cost centers (Sales and Marketing departments, respectively 25% and 75%) whereas Personnel Costs will be settled 100% to the HR department.

Without any source structure activated to the settlement rule, any type of costs and revenues would be settled the same way to one or several receivers with the same method. You do not need a source structure if you want to settle all your cost elements according to the same rules.

Source Structure Assignment

To use the source structure that you defined in the configuration, enter the source structure code in the settlement parameters of the project/WBS element master record or in the settlement profile for next projects.

In the previous figure, you can see how a source structure is configured in the Manage your solution tile, Application area Finance, Sub Application area Overhead Cost Management,Period-End Closing item, configuration step 4-Create Source Structure.

Assign Source Structure to Settlement Profile

Here are the steps to assign the source structure to a Settlement Profile:

Steps

  1. Select Configure for configuration step 1 Create Settlement Profile.

  2. In the Settlement Profile’s list, select the profile to which you want to apply the source structure.

  3. Select Details.

  4. In the Default Values section, complete the Source Structure field with your code.

  5. Save.

Assign Source Structure to Settlement Rule

Here are the steps to assign the Source Structure to a Settlement rule:

Steps

  1. Open your master data, for example, using the Project Control – Enterprise Project tile.

  2. Select the Settlement rule button (top-right corner).

  3. In the menu, go to Settlement Parameters (F8): Settlement profile applied is mentioned as well as some of the subsequent Source Structure that can be modified.

  4. Save.

Perform a Settlement using a Source Structure

Log in to track your progress & complete quizzes