Evaluating the Scope of Planning in Cost Center Accounting

In this lesson, we will discuss the reasons for maintaining plan data and about the scope of cost center planning.

In SAP S/4HANA, there are two main methods of maintaining plan data:

• Planning in SAP Analytics Cloud
• Planning via file upload

The simplest method, and the one used currently in the Bike Company is planning via file upload. You use the special templates SAP S/4HANA provides for planning and maintain the relevant planning data using Microsoft Excel.

Planning is used to set organizational goals. Comparing actual operating results against planned values helps you identify variances that serve as signals to take corrective measures in your business operations.

Cost center planning has several objectives:

• You plan the structure of your future operational activities.
• You use benchmarks to analyze the business transactions within a posting period.
• You monitor effectiveness by plan/actual and target/actual comparisons after the financial period close.
• It provides a foundation for evaluating business activities.

Operating expense planning involves entering plan figures for costs for a specific cost center or project and plan period.

With the help of the Activity output planning, you define which cost centers provide which activity types in which quantity in the plan periods.

Activity input planning means to plan the quantities the cost centers or simple projects need from other cost centers.

Activity cost rate planning means that the cost center which offers activity types either manually sets the price for one unit of an activity or the activity cost rate is calculated in an optimization run. In both cases the cost rate should only cover the costs for the production of the activity.

You plan statistical key figures that are used during plan allocations as tracing factors.

Planning is always done in reference to specific planning categories. These categories help to store separate planned figures for different scenarios. For example, you could use one category for optimistic planning with a decrease by 5% of advertising costs, another one for pessimistic planning taking into account an increase of 10% for the same.