The purpose of this WIKI page is to understand what is the scope of Accounting and Controlling in ERP Sales.
The scope of Accounting is:
- Legal/ external: for example, what will be our tax liability for the current period?
- Management: for example, how profitable is our company?
- Market analysis: for example, which was the most profitable product?
- Money flow
- Risk& liquidity
Types of Accounting
In a company, there are two types of Accounting:
1. Financial Accounting (external accounting): for law purposes, legal requirements…External people interested in the accounting of our company are: auditors, shareholders, insurers, tax authorities, bankers…This external accounting generates reports like the Balance Sheet, the Profit& Loss Statement, the General Ledger…
This Financial Accounting is covered by FI.
2. Management Accounting (internal accounting, contabilidad de gestión): it´s for internal purposes. Internal people interested in the accounting are: managers, controllers, administrative staff…This internal accounting generates reports like Product Cost reports, Profit Center reports, Cost Center reports…
This internal accounting is covered by CO.
Controlling (CO) and Financial Accounting (FI) are independent components in the SAP system. The data flow between the two components takes place on a regular basis. All data relevant to cost flows automatically to Controlling from Financial Accounting. A document line item (accounting document) is relevant to cost accounting if the G/L account has been created as a cost element (KA03). In this case, the document line item must contain exactly one actual account assignment object. The relevant accounts in Financial Accounting are managed in Controlling as cost elements or revenue elements (Accounting/ Controlling/ Cost element accounting/ master data/ cost element/ individual processing/ create cost element (KA01).
For example, G/L account 800000 has been created as a cost element in KA02. This enables you to compare and reconcile the values from Controlling and Financial Accounting.
Purpose of CO are
- Cost planning corresponding to the responsibility areas.
- Cost estimating for existing or planned products.
- Planning and controlling of expected profits.
CO-PA = PROFITABILTY ANALYSIS
EC-PCA = PROFIT CENTER ACCOUNTING
CO-PC = PRODUCT COST CONTROLLING (costing in the sales order (menu extras/ costing= kalkulation), condition types EK1 and EK2
CO-OM = OVERHEAD COST CONTROLLING (related to the sales order: planned revenues, settlement rule, account assignment…)
Represents a part of an organizational unit for which the sales market is structured in a uniform manner. In order to find the Operating Concern of a sales order, you have to go to IMG once you know the controlling area: go to IMG -> Enterprise Structure/ Assignment/ Controlling/ Assign controlling area to operating concern.
Organizational unit within a company used to represent a closed system for cost accounting purposes. The controlling area represents the highest organizational element in CO since it comprises the company code, the sales organization and the plant. For example, the revenue accounts are in one country (where the product is sold) and the cost accounts are in another country (where the product is produced). The controlling area comprises both of them. The Controlling Area of a sales order can only be found out in debugging mode: VBAK-KOKRS.
The smallest organizational unit within a company for which a self-contained set of accounts can be drawn up for purposes of external reporting. It´s the lowest independent accounting unit (the sales organization is bigger than the company code because the sales organization can be for example, Europe and it contains several company codes: Germany, Spain…Balance Sheets and Payment& Loss Statements required by law are created at company code level. The company code of a sales order can be found by following the menu Go to/ Header/ Accounting: VBAK-BUKRS
Organizational unit in external accounting which corresponds to a separate operational or responsability area (it is determined in SD). The business area is defined in IMG-> Enterprise Structure/ Definition/ Financial Accounting/ Define Business Area.
The business area is ready for input and it represents a mandatory field in the sales order if the "Business area financial statements" flag is set in transaction OB65. There are two different options for determining the business area. Either the business area is determined through the cost center, wherein the cost center is assigned to a certain combination of sales area and order reason (OVF3). Or the business area is determined through one of the following combinations, wherein it is defined in OVF2 which variant is employed:
- plant/ division (OVF0)
- sales area (OVF1)
- sales organization/ distribution channel/ item division (OVF1).
The business area determination is performed in FV45PF0V_VBAP-GSBER_ERMITTELN.
- Related Documents
- Related SAP Notes/KBA