Performing 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.

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.

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.