Using Internal Orders as Cost Collectors


After completing this lesson, you will be able to:

  • Effectively utilize internal orders as cost collectors to assign costs to specific events

Internal Orders as Cost Collectors

In the first case, you post costs, for example for two trade fairs, directly to the cost center responsible for supporting these events. Because external costs and internal activities are treated with the same cost relevant G/L accounts on the same cost center, you cannot easily determine which event created which costs. Therefore, you can make no further comparison analysis of the two trade fair events.

In order to be able to report the costs for each trade fair comprehensively, it is better to assign the costs of each individual trade fair to an explicit internal order. The costs can be settled to the sales cost centers or directly to a profitability segment in profitability analysis. One single trade fair might be a sub-project of a large project, which is an image campaign for the company. If the internal order is used as cost collector, it will be settled to the corresponding WBS element.

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