Processing Period-End Closing Activities

Objectives

After completing this lesson, you will be able to:

  • Process period-end closing activities

Period-End Closing Activities

Template Allocation
While a distributed flat rate is used overhead, the template allocation distributes overhead from business processes or cost center or activity types.
Overhead Rates
Use overhead costing to allocate overhead through percentage-based or quantity-based overhead rates. The basis for the allocation is the primary cost elements that you post as overhead costs.
Project Interest Calculation
Valuates fund commitments, using costs, revenues, or payments to achieve the best possible project payment flow.
Cost Forecast
Used to adapt cost planning for changing circumstances. For the cost to complete, the system determines and values the remaining activities on the basis of the plan, forecast, and actual values in the network. The resulting figure is arrived at by adding the actual and commitment costs already incurred in the project to the updated cost to complete
Progress Analysis
Used to determine planned and actual project progress values, and to compare the two sets of data. The system uses the overall planned costs to evaluate the work done, therefore the evaluation is not dependent on the costs planned or posted by period. You can determine the relevant values at any time or as part of the period end closing. Use progress analysis to obtain information on the status of your project and how it is developing, which enables you to take corrective action if the project is differing from its plan.
Results Analysis
A periodic valuation of the project is performed. You can analyze the results of WBS element costs, which are capitalized and used to set up provisions. Results analysis is usually performed in the billing element.
Incoming Orders
The system uses this function to determine the costs and revenues expected to arise from orders closed or changed in the current period. You can evaluate the values for incoming orders, open orders in the project information system and settle them using profitability analysis.
Settlement
Project settlement is used to allocate the costs and revenues in projects or allocate the results analysis data to one or more receivers.

Settlement of a Project

Settlement rules are required to settle the project. These rules determine which portions of sender’s costs are transferred to which cost receiver(s). Settlement rules are stored in the sender objects and contain distribution rules and settlement parameters. They are required to settle the project. The figure Settlement Scenarios shows the typical scenarios for settling the projects.

You can create settlement rules manually in the Project Builder. For WBS elements, you can also use the Create Settlement Rule transaction/fiori app. Depending on predefined strategies, these transactions create settlement rules for cost centers or profitability segments, or they inherit predefined settlement rules.

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