Controlling Finance Projects

Objectives

After completing this lesson, you will be able to:

  • Discuss how Project Control helps control Finance Projects

How to control a Finance Project

Introduction: Controlling Finance Projects

For many purposes, companies run projects to plan and coordinate the work, staff employees, and track project progress and costs. In this scenario, a Work Breakdown Structure (WBS) as an accounting structure is created. Planned project costs can be captured. After releasing all or part of the project, the project is executed. Time can be recorded, and project-related purchasing can be performed.

Task 1: Create a Project

In this first task, Shubham, our Project Financial Controller, creates an Overhead Project. This project type is used to support the planning and monitoring of project-related costs, in this case hierarchical projects accounting structures, such as R&D projects.

Shubham is able to plan and post costs for the project, monitor the project, and finally close the project.

Overhead projects allow the settlement of costs to different G/L accounts and costs centers based on the settlement rule created.

Task 2: Capture Cost plan and Budget

In the second task, Shubham would like to add planned cost information to WBS elements.

Therefore he downloads a template to his local PC, fills in the relevant data, and uploads them back to WBS elements.

Task 3: Project Execution

Shubham, our Project Financial Controller releases the project and does a direct activity allocation.

Stefan, our General Ledger Accountant, post general journal entries. Inside data he enters the necessary WBS element.

Task 4: Monitor Projects

Shubham wants to monitor project progress. He pays special attention to project costs and budget values.

Finally he sets the project status to complete and closes the project.

Now you should have an impression of "How to maintain a Financial Project".

Control a Finance Project (1NT)

For many purposes, companies run projects to plan and coordinate the work, staff employees, and track project progress and costs.

In this scenario, a Work Breakdown Structure (WBS) as an accounting structure is created. After releasing all or part of the project, the project is executed. Time can be recorded, and project-related purchasing can be performed. In finance, allocations or general journal entries can be done with regard to project WBS elements. The project financial controller monitors the project costs through overview pages and detailed project reporting. At period end, depending on the type of project, differentperiod-end closing activities such as overhead application or settlement can be executed for a project. Afterwards, the financial controller completes and closes project parts and then closes the complete project.

Task 1: Prerequisite: Assign Business Roles to your user

Steps

  1. Log on to the SAP S/4HANA Public Cloud training system with your user credentials and assign the relevant business roles to your user.

    Assign:

    Role IDDescription
    BR_PROJ_FIN_CONTROLLERProject Financial Controller
    BR_BPC_EXPERT Configuration Expert - Business Process Configuration
    BR_BUSINESS_PROCESS_SPECBusiness Process Specialist 
    BR_OVERHEAD_ACCOUNTANT Cost Accountant - Overhead
    BR_GL_ACCOUNTANTGeneral Ledger Accountant
    BR_ANALYTICS_SPECIALISTAnalytic Specialist
    1. Log on to the SAP S/4HANA Public Cloud training system with your user credentials.

    2. Navigate to the Maintain Business Users application.

    3. Scroll through the list of users to locate your business user.

    4. Select your business user.

    5. Choose Add and search for the required business roles.

    6. Choose Apply, then OK to close the dialog box.

      Result

      You now see the business roles assigned.
    7. Choose Save.

    8. Refresh your screen.

Task 2: Create Overhead Project

In this exercise you create a new project with the project builder.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Create a new overhead project. Use the app Project Control-Enterprise Projects with the following data:

    Project Details

    FieldValue
    Project Name:Overhead Project - ###
    Project ID:OVH_###
    Project Profile:Overhead Project
    Planned Start:Today
    Planned Finish:Today + 3 months
    Responsible Cost Center:10101501
    Profit Center:YB600 (Shared Services)
    Project Manager:9980000123

    Click on Create to save your project.

    1. Navigate through the displayed tiles or use the enterprise search to open the Project Control-Enterprise Projects app.

    2. Choose the button Create.

    3. In the Identification and view selection section, enter the Project ID and the Project Description in the fields corresponding to Project def.

    4. On the Control tab, use the dropdown help to enter Overhead Project in the Project Profile field.

    5. Choose the Basic Data tab.

    6. In the Dates section, enter the Start Date and Finish Date.

    7. In the Organization section, enter the Responsible Cost Center and Profit Center.

    8. In the Responsibilities section, to enter the Project Manager, open the value help.

    9. Choose Create. When the project definition is created, the Project Summary Task WBS Element will be created.

  2. Add the following values inside "General Information" area:

    General Information Section

    FieldValue
    Plant:1010
    Functional Area:YB50 (Research & Development) .

    Open the "Control" tab page and enter:

    FieldValue
    Costing Sheet:1010PI

    Save it.

    1. Switch to Edit mode.

    2. Choose the General Information area.

    3. In the Organization section, enter the Plant and the Functional Area.

    4. Navigate to the Control tab and enter the Costing Sheet.

    5. Choose Save.

Task 3: Create WBS Elements Under Project

Create new WBS elements under your new created project.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Once the project is created, from the header section, choose Related Apps and the entry Project Planning.

    Switch to "Edit" mode, highlight your created project and select the entry "Create".

    Enter inside new line:

    WBS Element 1

    FieldValue
    Name:Project Planning - ###
    ID (WBS Element):OVH_###1
    Planned Start:Today
    Planned Finish:Today + 3 months
    Resp. Cost Cntr:10101501 (R&D) (This data is pre-populated from the main WBS level).
    Profit Center:YB600
    Note
    Some fields are filled in automatically.

    WBS Element 2

    FieldValue
    Description:Project Execution - ###
    WBS Element:OVH_###2
    Basic Start Date:Today
    Basic Finish Date:Today + 3 months
    Resp. Cost Cntr:10101501 (R&D) (This data is pre-populated from the main WBS level).
    Profit Center:YB600

    If you would like, rearrange your WBS elements.Execution should be underPlanning.

    Finally save it.

    1. Select the button "Related AppsProject Planning" which can be found inside header area.

    2. In the Project Structure view (top left column), select the WBS Element OVH_###.

    3. Choose entry Create.

    4. Enter as a name Project Planning - ###.

    5. Enter Responsible Cost Center and Profit Center. It's the same as for the initial element.

    6. Repeat sub-steps c to f to create the second WBS element Project Execution - ###.

    7. Finally save it.

    8. Stay inside your app.

Task 4: Release Projects and Project Parts

In this activity, you release the project to assign and post the actual cost for time confirmations, expenses, and so on. In this activity, you post planned budget to WBS elements.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Click on the button "Related Apps" and select the entry "Project Control- Enterprise Projects".

    1. Perform the exercise.

  2. Release the project.

    1. In the header, choose Processing statusRelease.

  3. To Maintain the actual start date in the WBS Elements use the related Project Planning app which again can be found inside area "Related Apps". Finally save your project.

    Note
    When you switch to Edit mode, the actual start date is not visible. Therefore change the layout.

    Select the last button inside header area. It's named "Settings". Activate the display of "Actual Start". Expand the structure view and enter the current date for all WBS elements.

    1. Choose Related AppsProject Planning.

    2. Choose Edit to switch to the Edit mode.

    3. Change the layout of the structure view. Select the right button on the right hand side.

    4. Add the "Actual Start" information.

    5. Add for every object the current date as a start date.

    6. Choose Save.

    7. Open start page of Fiori launchpad.

Task 5: Direct Activity Allocation

In this activity, you confirm actual activities that occurred in relation to a WBS element.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Open the Manage Direct Activity Allocation- Old Version app.

  2. Create the following activity allocation for your WBS element OVH_###1:

    Header Information

    FieldValue
    Document Header Text:your choice
    Journal Entry Date:Today
    Posting Date:Today
    Note
    For entering the Journal and Posting date always use the F4 help, if it's not predefined. First select the right "Time period -Date" and then enter today's date.

    Allocation Items Data

    FieldValue
    Sender Cost Center:10101321
    Sender Activity Type:8
    Quantity:10 h
    Receiver WBS Element:OVH_###
    Note
    Please open the detail view ( button: show more per row) and enter the quantity. If all information is entered, warning/ error messages disappear. Ignore the warning message concerning "Sender Activity Type". if everything was added correctly, message disappears.
    1. In the Activity Allocations tab, choose Create.

    2. In the Header Information area, enter the data from the 'Header Information' table.

    3. In the Allocation Items area, enter the data from the 'Allocation Items Data' table.

    4. Select the button "Show more per Row"

    5. Enter now the right quantity information.

  3. Create your activity allocation.

    1. Choose Create to save the data.

Task 6: Post General Journal Entry

In this activity, you post actual primary costs to WBS elements.

Note
To complete this exercise, you must have the General Ledger Accountant (BR_GL_ACCOUNTANT) business role assigned to your user.

Steps

  1. Open the Post General Journal Entries app.

  2. Enter General Journal Entries.

    1. On the Post General Journal Entries screen, make the following entries:

      FieldValue
      Journal Entry Date:Today
      Posting Date:Today
      Journal Entry Type:SA
      Company Code:1010
      Transaction Currency:EUR
    2. In the Line Items area, make the following entries and choose Enter:

      Line Item

      FieldValue
      G/L Account:61003000
      Debit:1000
      Credit:0
    3. Choose the Expand All button of your newly created line item and then enter the following:

      FieldValue
      Tax Code:V0
      WBS Element:OVH_###
    4. Enter the Line Item 2 with the following details.

      Line Item 2

      FieldValue
      G/L Account:10010000
      Debit:0
      Credit:1000
    5. Check that the Total Balance is 0.00.

      Total Balance can be found in right, upper corner.
    6. Choose Post.

Task 7: Monitor Projects

In this activity, you can analyze the status, timelines and costs of your project. Note: You will be able to access the reports such as Project Cost, Plan vs Actual and Monitor Projects directly from Project Financial Overview.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Open the Project Financial Controller Overview app.

  2. Search for your project and check its financials. Use the following data:

    FieldValue
    Project:OVH_###
    Planning Category:Plan

    Check financials and the overall status of the project using various cards.

    1. In the Standard section, enter the data provided in the table and choose Go.

    2. Check financials and the overall status of the project using various cards.

Task 8: Monitor Projects via P&L Plan/Actual

In this activity, you analyze the cost structure of your project and compare actual versus planned.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Open the P&L Plan/Actual app.

  2. Search for your project and check its financials. Use the following data:

    FieldValue
    Ledger:0L
    Fiscal Year of Ledger:Current year
    Plan Category:PLN
    Project:OVH_###
    1. In the Standard section, enter the data provided in the table and choose Go.

    2. Check financials using drilldown and filter possibilities.

Task 9: Monitor Projects via Project Cost Report

In this activity, you analyze the cost structure of your project and check planned cost.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Open the Project Cost Report Plan/Actual app. Search for your project and analyze its project cost report, using the Details information.

    Search with:

    FieldValue
    Project:OVH_###
    Planning Category 1:Plan
    Planning Category 2:CPM Baseline

    Click on Go.

    On Project Costs - line items screen, check financials using drilldown and filter possibilities.

    1. To open the app Project Cost Report Plan/Actual.

    2. In the Standard section, in the Project field, enter OVH_### and choose Go.

    3. Select the project in the table, and choose View Details.

    4. On Project Costs - line items screen, check financials using drilldown and filter possibilities.

Task 10: Check / update settlement rules for overhead projects

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user

Steps

  1. Open the Project Control- Enterprise Projects app.

  2. Open the project OVH_###.

    1. Select the line and open the view.

  3. Maintain the following settlement rule for the WBS in your project: OVH_###.

    Distribution Rules

    Account Assignment CategorySettlement ReceiverPercentSettlement TypeDistribution Rule Number
    CTR1010150150PER1
    CTR1010160150PER2
    1. Choose the button Settlement Rule inside header area.

    2. Maintain the distribution rule as provided in the table and then choose Back

    3. Choose Save.

Task 11: Complete Project Parts and Project

In this activity, you technically complete the project. For investment projects the final settlement then transfers the costs from the AuC asset to the completed asset and to the cost center as specified in the settlement rules (as specified in BNA Period-End Closing - Projects test script).

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Start the app Project Control- Enterprise Projects and open your project OVH_###.

    1. Open the app Project Control- Enterprise Projects.

    2. In the search criteria, enter OVH_### in the Project field.

    3. Choose GO.

    4. Choose your project from the search results to open its details.

  2. Set the Processing status to "Complete" for your project OVH_###

    1. In the header, choose Processing statusComplete.

Task 12: Close Project Parts and Project

In this activity, you close your project.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Start the app Project Control- Enterprise Projects and open your project OVH_###.

    1. Open the app Project Control.

    2. In the search criteria, enter OVH_### in the Project field.

    3. Choose GO.

    4. Choose your project from the search results to open its details.

  2. Close your project OVH_###.

    1. In the header, choose Processing statusClose.

Finance Project Control

For many purposes, companies run projects to plan and coordinate the work, staff employees, and track project progress and costs.

In this scenario, a Work Breakdown Structure (WBS) as an accounting structure is created. Planned project costs (uploaded by the project financial controller) can be captured in SAP Analytics Cloud. After releasing all or part of the project, the project is executed. Time can be recorded, and project-related purchasing can be performed. In finance, allocations or general journal entries can be done with regard to project WBS elements.

The project financial controller monitors the project costs through overview pages and detailed project reporting.

At period end, depending on the type of project, different period-end closing activities such as overhead application or settlement can be executed for a project.

Afterwards, the financial controller completes and closes project parts and then closes the complete project.

Watch the following video to understand how a possible process could look like. You learn which users and which roles are necessary to control finance projects.

Applicable Process Steps

To sum up the steps you saw in that video, here are the general process steps listed:

  • Project Financial Controller: Creates and releases project
  • Controller: Performs direct activity allocation
  • Employee: Does a time recording
  • Project Procurement Controller: Perform a project based procurement
  • General Ledger Accountant: Posts general journal entries

Benefits

The benefits of Controlling Finance Projects are:

  • Create and maintain simple project up to highly complex hierarchical projects
  • Select different project profiles
  • Capture planned project costs and allocate budget
  • Assign accounts of documents in financials and procurement or external applications to capture actual costs
  • Monitor project-related purchase requisitions and purchase orders
  • Receive live insight into project costs by comparing plan and actual costs as well as commitments
  • Settle project costs to cost centers, G/L accounts, or asset accounting
Note

This process flow is covered in scope Item 1NT - Project Control for Finance.

Log in to track your progress & complete quizzes