Management accounting in SAP S/4HANA is the support system for management in its decision-making, be it in terms of planning, monitoring, or reporting of the business processes. Subsequently, it assists in the coordination, monitoring, and optimization of the business processes of the organization.
You want to understand the structure and subdivision of controlling in components and how these then represent the production and sales processes of the Bike Company. You are particularly interested in the relation and interoperability of the components with each other. You wonder which transact triggers management accounting in SAP S/4HANA. Where is the interaction between the process organization in the company and the role of Controlling?
In this lesson, you will become familiar with the individual controlling-relevant work areas and their relationships.
The relationship between processes in the company and accounting
The legal structure of an enterprise is fairly rigid, represented by the companies and operating segments. The management structure allows you more flexibility and you can structure according to:
- Functional aspects: production (plants), sales (sales offices), purchasing, marketing, accounting, controlling
- Product-related aspects: business areas, business units, divisions
- Regional aspects: countries, territories
The tasks of accounting are divided in two parts according to the stakeholder requirements: financial accounting (shareholders, customers, suppliers, lender, public) and management accounting (management, employees). The management accounting tasks are:
- Documentation of internal business transactions
- Management support
- Controlling operational efficiency
- Making decisions
- Execution of business transactions, for example, planning
The driver model
To be able to fulfill the task of decision support, a system of functional dependencies is created. This enables you to map the cause-effect business relationships in the system. The logistical business transactions and other business events in the real world are the drivers. The dependent sizes are usually monetary values. The connection between the drivers and the values is determined by coefficients consisting of technical standards, legal agreements, operational general conditions, empirical values, operational planning, and so on.
Single circuit system
From a business point of view, SAP S/4HANA accounting & controlling follows the so-called single-circuit system. The values are maintained using the general ledger accounts. The values are differentiated by account assignments: cost centers for controlling areas of responsibility, cost objects for determining the cost of goods manufactured, and profitability segments for revenue and profitability analysis. The account assignments can be fixed (cost center and cost object) or flexible, such as profitability segments that combine characteristics, such as product, region, distribution channel, and so on. The account assignment can be entered when the business transaction is entered (for example, cost center for the purchase order or invoice receipt) or from assignments in master data (for example, an employee associated with a cost center, a product corresponds to a cost object). All allocations required for management accounting are treated as financial accounting documents.
To perform the management accounting tasks using the driver model, you can categorize costs/revenues differently from expenses and revenues in the profit and loss statement as well as cost and revenue elements in contrast to expense types/revenue types. The overhead costs are assigned to areas of responsibility; these are mapped to cost centers and projects. In product costing, the costs per unit for products and services are calculated; these are represented by cost objects. The overhead costs are determined by transfer pricing in accordance with the routing and are allocated to the cost objects. The costs of raw and semi-finished products are transferred to the cost objects according to the bill of material (BOM) in production. The revenue and contribution margin are differentiated by market segment, referred to as profitability segments. All of this is done on the basis of the actual business transactions (actual data) and planning-related (plan data).