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SAP CO NOTES
INDEX
PARTICULARS Page No.
CO Areas and Basic Settings for Controlling 3
Cost Center Accounting 11
Online Reconciliation Leger 23
1. Creation of GL Masters
2. CO Customization
3. FI Customization
25
27
28
Cross Company Code Postings 31
Maintain Overhead structure 34
Statically Key Figures (SKF) 38
Assessment 42
Internal Orders 46
Budgeting and Availability Control 60
Profit Center Accounting 64
Integration 76
1. Transaction Key /Process Key
2. Valuation Class
3. Assignment of accounts
4. MM Customization
5. FI Consultant job in MM
6. Assignment of Accounts for Automatic Postings(MM
to FI)
7. FI Consultant job in SD
8. SD Steps
9.
77
78
89
90
97
100
115
Co-Profitability Analysis (CO-PA)
1. Data flow in CO-PA
2. Customization
3. SD End user area
120
120
122
126
Report Painter 129
Product Costing 132
1. Co Consultant Job (Activity based costing)
2. PP Consultant job
3. CO End User area
4. MM End User area
5. PP End user area
134
144
146
147
149
Actual Costing 153
1. CO Consultant job
2. PP consultant area
3. Asset Accounting area
153
167
174
New General Ledgers (ECC 6 New Features ) 179

2
1. Customization
2. Document Splitting
180
188
Central Excise and Sales Tax
1. Central Excise Customization (Purchase)
2. Central Excise customization (Sales)
3. SD End user area
192
195
211
217
Financial Statement Version 228
Asset Accounting Area 237
Project Report 238
CONTROLLING (CO)
This is used for internal reporting in Co organizational Hierarchy – Highest node is
controlling area. In FI Highest node is company , Company code
CO AREAS :
1. Cost Elements Accounting: To update Co records / sub modules cost elements
are required.
There are two types of cost elements
1. primary cost elements
2. Secondary cost Elements
2. Cost Center Accounting: This is used to view department wise costs.
3. Internal orders: This is used to view costs for specific task.
Eg: Vehicle wise running expenses / Petrol expenses, Repairs to that Vehicle,
Telephone wise expenses production order costs / Exhibition costs.
Create each vehicle as n order and capture the costs
Production order:
Create production order as on internal order and capture the costs.
Exhibition costs: Sales men salaries , Advertisement discounts to customers
conveyance. Create a exhibition order
4. Profit center accounting : This is used to view profitability product wise /
Division wise / Location wise if business area is not used in FI
5 Product Costing :This is used for valuation if inventories

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Eg: Finished goods and work in process.
6. Profitability analysis: This is used to view profitability for number of parameters
at a time.
Eg. Sales order wise / Customer wise / Product wise / Plant wise / Sales
organization wise profitability this is reporting tool
BASIC SETTINGS FOR CONTROLLING:
Maintain controlling area
FI Organization Structure CO. Organization Structure
Company Controlling
| |
Company code |
| |
Business area Cost Center
Scenario – 1
Company
|
Company code = Controlling Area
| |
Business area --- Cost Center
(a)Controlling area at company code level, b)Business area will be assigned in cost
centers.)
Scenario -2
Company = Controlling Area
| |
Company code |
| |
Business area --- Cost Center
(a )Controlling area at company (group) level no. of company codes will have one
controlling area, b) Business area will be assigned in cost centers.

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1) When management wants to view number of company codes cost centers data at a
time – It is not possible in 1st
Scenario – It is possible 2nd
scenario.
In report it will ask only one controlling area and not multiple controlling area.
2) When management wants to view number of cost centers data of company code –
Directly it is possible in 1st
scenario.
Also it is possible in 2nd
Scenario – By creating cost center groups.
It means 2nd
Scenario is more flexible.
MAINTAIN CONTROLLING AREA:
Path : SPRO – Controlling – General controlling – Organization – Maintain
controlling area (Tr.Code is OKKP)
If we go for 1st
scenario – company code should be the controlling area.
If we go for 2nd
scenario we can use any code for controlling area code.
Double click maintain controlling area.
Select new entries button
Controlling area :BIL
Name :controlling area forBIL
Company code to controlling area : Select controlling area same as company code
Currency type : select 10 company code currency.
Once we select 10 company code currency , currency field, Chart of Accounts filed and
Fiscal year variant filed will be updated automatically.
Cost Center standard hierarchy : BILHIER
Save
Select yes button for the message system to create as a standard hierarchy
Select create request button
Short description : Co customization for BIL
Press enter
Press enter once again to save in the request.
COST CENTER STANDARD HIERARCHY:
Cost center standard hierarchy : BILHIER
|
Cost centers Dept. A Dept.B Dept.C

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At the time of cost center creation – It will ask under which hierarchy we are creating the
cost centers.
In the report – when we give cost center Dept.A – It gives only Dept.A date. When we
give cost center Dept.B – It gives only Dept.B date.
When we give cost center hierarchy BILHIER – It gives all the cost centers data.
Double click on assignment of company codes folder
Give the company code : BIL
Select save button or Ctrl+S
Press enter to save in your request
Double click on a activate components / control indicators folder
Fiscal year :2007
Cost center : Select component active
Select active type check box
Order management select component active.
Select profit center accounting check box
Save
Ignore the warning message press enter
MAINTAIN NUMBER RANGES FOR CONTROLLING DOCUMENTS:
1. CO through posting from FI (Business transaction – COIN
CO No rang interval for the business transaction –COIN
FI Document type Co
And no.ranges
SA COIN
| |
01 |

6
|
1-100000 1-00000
Manual posting F-02 Automatic posting
1. Repost Co line items (Business transaction –RKU3)
Option 1
Posting in FI
Wages A/c Dr 100000 Dept.A
Wages A/c Dr 200000 Dept.B
Wages A/ Dr 300000 Dept C
To bank 600000
1 FI Document
1 Co Document – COIN
Note :Automatic posting is a business transaction
Option 2
Posting in FI Posting in CO
Wages A/c Dr 600000 Dept common Dept A 100000
Dept.common Dept B 200000
Dept. Common Dept C 300000
To Bank 600000 Post Co line item
2 Documents
1 FI Document No FI document
1 CO Document –COIN 1 CO Document – RKU3
Transfer document wise/line item wise
Total documents generated
1. FI Document
2. CO Documents
Wages A/c Dr 600000 Dept Common Dept A 300000
Dept Common Dept B 200000
Dept Common Dept C 300000
Rent A/c Dr 50000 Dept A

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To bank 650000 Repot CO line item
Transfer line item wise
Transfer document wise / Line item wise
Report costs ( Business transactions – RKU1)
This is used when we split the cost center into number of cost centers or transfer for
wrong cost center postings.
No FI document will be generated
CO document only will be generated
Transfer cost element wise (GL Account wise) 01/07/2007 split into Dept A and Dept X
Dept A Dept X
30/04/2008 400100 Salaries 200000
30/05/2008 400100 Salaries 250000
30/06/2008 400100 Salaries 275000
----------
400100 total 725000 400100 Salaries 200000
30/04/2008 400101 wages 100000
03/05/2008 400101 wages 150000
30/06/2008 400101 wages 125000
----------
Total 400101 375000 400101 wages 125000
30/04/2008 400300 Rent 500000
31/05/2008 400300 Rent 50000
30/06/2008 400300 Rent 50000
--------
400300 Total 150000 400300 Rent 40000
Planning primary costs ( Business transaction RKP1)
Planning cost center wise or no. range interval for all the types , budgeting cost center
wise for each cost element.
Path: SPRO- Controlling – General controlling – Organization- Maintain number
ranges for controlling document (T.Code is KANK)
Controlling area : BIL

8
Select maintain groups button
From the menu select group – Insert
Text: Co doc no. range interval for BIL
From number : 1
To number :100000
Enter
Double click on business transactions COIN
RKU3
RKU1
RKP1
Select Co.No.range interval for BIL check box
From the menu select Edit – Assignment element group
Save
Ignore the message press enter
Note :Usage of Version locked authorized person only Eg; Cost Accountant
MAINTAIN VERSIONS:
Version are nothing but budgets
Original budgets Version 0
Revised budget version 1
Re revised budget Version 2
We can compare actual with original budget, Revised budget and Re revised budget
Path: SPRO – Controlling –General controlling – Organization – Maintain
versions
Select version 0 (Plant /actual version )
Double click on settings for each fiscal year folder
Give the controlling area : BIL
Enter
Fiscal year :2008
Exchange rate type :select B (Bank selling rate)
Once budgeting is completed at end user are a select version locked – So that no body
can change budget figures.

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Select bank arrow
Planning is made attend user area after planning’s completed we select version locked
check box , no body can change planned figures.
COST ELEMENT ACCOUNTING:
To update CO records / sub modules cost elements are required
There are 2 types of cost elements
1. Primary cost element 2 Secondary cost elements
A)Primary cost elements are our general
ledger accounts
A)Secondary cost elements are other than
general ledger accounts
B) Posting to primary cost elements are
possiable
B) Postings to secondary cost elements are
not possible. They are used to allocations /
Settlements
Dept C Dept A Dept B
(Service Dept) (Production Depts)
Salaries 100000
Wages 200000
Power 5000
In the month end, by using secondary cost
element, we allocate costs from service to
production Depts.
COST ELEMENT CATEGORIES
PRIMARY COST ELEMENT CATEGORIES:
1. Primary cost / costs redacting revenues. This used for expenditure accounts
3. Accrual / Deferral per surcharge :This is used for month end provisions only in
CO
11. Revenues: This is used for income accounts
12. Sales Deduction: This is used for expenditure accounts like sales commission
Trade discount where CO-Profitability analysis module is activated
22. External settlement( Settlement from CO – FI): This is used for allocation of
internal order settlement to GL Accounts / Assets.

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SECONDARY COST ELEMENT CATEGORIES:
21. Internal settlement (Settlement from CO to CO) This is used for allocation of
internal order settlement cost to cost centers.
31. Order/ Project Results analysis: This is used for work in process calculations is
product costing.
41. Overheads rates :This is used for calculation of raw material overhead rate /
Production overhead rate in product costing .
42. Assessment: This is used for allocation of primary cost element posing and
secondary cost postings from one cost center to other cost centers.
43. Internal Activity Allocation: This is used for calculation of activity types in
production cost.
Eg: Machine hours rate / labour hour rate in product costing.
COST CENTER ACCOUNTING
This is used to view department wise costs we use cost center accounting.
1. Creation of primary cost elements, we can create
A) FI Area |
B)CO Area |- Co Area
C)Automatic creation |
2. Display cost elements created
3. Creation of filed status group by making cost center required entry field
4. Assign new filed status group in GL expenditure accounts
5. Creation of cost centers.
6. Creation of cost center groups.
7. Creation of cost element groups
8. To enter exchange rate for type M for INR to Euro
9. Posting of transaction in FI
10. To view cost center wise report.
11. To view CO documents
1. A) Creation of primary cost element at FI area
Use to FS00 – GL masters creation
Give the GL account number : 400100 Salaries Account
Company code : BIL
Form the menu select GL Account display
Now select edit cost element button
Valid from date :01.04.2008
To date :31.12.9999 comes automatically
Enter
Cost element category : Select 1 (Primary cost / cost reducing revenues)

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1. B) Creation of Primary cost element at CO area:
Use transaction code FS00
Path: Accounting- Controlling- Cost element accounting-Master data-Cost
element –Individual processing-Create primary (Tr.code KA01 )
Cost element : 400300 Rent Account
Valid from :01.04.2008 to 31.12.9999
Enter
Cost element category :1 (primary cost /cost reducing revenue)
Save
1. C) Automatic creation of primary cost elements:
1) Marked default settings (OKB2)
path : SPRO-Controlling-Cost element accounting-Master data – Cost elements –
Automatic creation primary and secondary cost elements-Make default
settings.(Tr.code is OKB2)
Give the chart of Accounts : BIL
Enter
Account from :400301
Account to :499999
Cost element category select 1
Save
Create batch input session (OKB3)
Same path as above
Valid from :01.04.2008
Valid to :31.12.1999
Session name :BIL (This is text field)
Execute
Execute batch input session (Tr code is SM35)
Same path as above
Select session name : BIL
Select process button
Select session :BIL

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Select display errors only radio button
Select process button
We get a message processing of batch input session completed.
Ignore the message & select exit batch input button
Display primary cost elements created (KA03)
Path: Accounting-Controlling-Cost element accounting-Mater data-Cost
element –Individual processing – Display- (Tr code is KA03)
Select drop down button beside cost element
Give the Controlling area : BIL
Enter
Creation of field status group by making cost center required entry field:
(Tr.Code is OBC4)
Select field status variant: BIL
Double click on filed status groups folder
100000 equity share capital G001 We can’t make cost center required for
balance sheet accounts
400100 Salaries Account G001
For G004 we make cost center required and
assign in salaries account (i.e in expenditure
accounts)
Double click on field status group G004 cost accounts
Double click on General data
Text make it required entry field
Select next group button
Cost center select required entry filed
Select next page or page down button two times.
Business area make it option entry filed
Save

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Assign group new field group in GL expenditure accounts (FS00)
Give the GL account 400100 salaries account
Company code :BIL
From the menu select GL account change select create / Bank / Interest tab
Filed status group change to G004
Save
Give the GL Account No.400300 Rent A/c
Company code :BIL
From the menu select GL account change
Change field status group to G004
Save
Creation of cost centers:
Path: Accounting-Controlling-Cost center accounting-Master data-Cost center-
Individual processing-create (Tr.code is KS01)
Cost center : Dept A
Valid from :01.04.2008 to 31.12.9999
Enter
Give the name : Dept A
Give the description : Dept A
Person responsible :Mr.A
Cost center category : Select 1 production
Hierarchy area : select BILHIER
Business area :BILH
Currency :INR
One more cost center : Dept B
Valid from :01.04.2008 to 31.12.9999
Reference cost center : Dept A

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Enter
Change the name to Dept B
Change the description to cost center Dept B
Change the person responsible : Mr B
Other fields are common
Select save button
Cost center : Dept C
Valid from :01.04.2008 to 31.12.9999
Enter
Change the name to : Dept C
Change the description to cost center : Dept C
Change person responsible to Mr.C
Cost center category : Select to 2 (service cost center)
Select save button or Ctrl+s
Creation cost center groups:
Hierarchy : BILHIER
Cost centers Dept A Dept B Dept C Dept X Dept Y Dept Z
Category Production Prod Service Production Production Service
Business Area HYD HYD HYD BGL BGL BGL
If we want to see all cost centers data – BILHIER
If we want to see production cost centers data – Create a cost center group and assign
Dept A . Dept B, Dept X and Dept Y.
If we want to see HYD cost centers data cost – cost center group and assign Dept A, Dept
b and Dept C
If we want so settled production cost centers data – create A cost center group and assign
Dept A and Dept B

15
Path : Accounting – Controlling – Cost center accounting – Master data- Cost center
group – Create (Tr.code is KSH1)
Give the cost center name : BILHYD PROD
Enter
Description Hyderabad production cost centers BIL
Select Edit Cost Center Insert cost center button
Select the cost centers Dept A
Dept B
Save
Creation of cost Element group:
FI : Account groups Personnel cost CO:Dept wise personal cost or
Administration
400100 salaries Create cost element group personnel and
assign 400100 -400199
400101 Wages
400102 Bonus
400103 Staff welfare and Administration Create cost element group administration
and assign 400300-400399
400300 Rent
400301 Telephone exp
400302 Petrol exp In the report center Dept A Dept C
Or
Cost center GRP
Cost element
Or
Cost element GRP personnel
administration
Path: Accounting –Controlling-Cost center accounting-Master data-Cost element
group –Create (Transaction code: KAH1)
Cost element group name : BILADMIN
Enter
Description : Administration expenses for BIL
Select insert cost element button (Shift+F4) (Edit –Cost element –Insert cost element)
From 400300 to 400399

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Save
To enter exchange rate for type M for INR to EURO (Tr.Code is OB08)
Exchange rate type : M (Average rate)
From currency : INR
To : EUR
Direct quotation :0.02
Posting of transaction in FI Transaction code:F-02
Give the document date : Today’s date
Type :SA
Company code :BIL
Posting key :40
Account :400100 salaries account
Enter
Give the amount :500000
Text :Salaries posting
One more expenditure
Post key :40
Account :400300 Rent account
Enter
Amount :100000
Text : Rent posting
Posting key : 50
Account :200105 SBI current account
Enter
Amount :*
Business area :BILH
Text : Expenditure posting
From the menu select Document Simulate

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To view cost center wise report:
Path: Accounting –Controlling-cost center accounting –Information system-Report for
cost center accounting-Line items –Cost centers: Actual line items (Transaction
:KSB1)
Cost center select Dept A (if you want change the posting dates)
Select execute button
Keep the cursor and the first line item
Select document button
Select back arrow
Select change layout button (Ctrl+F8)
Select Document no.under column set
Select value in reporting currency under displayed columns
Select left arrow or show selected filed button
Select reference document no.under column set
Select value in report current under displayed columns
Select left arrow
Select business transition under column set
Select document no. under displayed columns
Select left arrow
Enter
To view co documents:
Path :Up to reports for costs center accounting path is same -Line items – Co
documents :Actual costs (transaction code is KSB5)
Document no. :1 to 100000
Execute
Select folder button for document no.1
Report co line items:
Business transaction RKU3
FI doc.13
001 400100 Salaries 500000 Dept A 150000 Dept B
50000 Dept C

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Report co line item
002 400300 Rent 100000 Dept A
003 200105 SBI 600000
Report co line item
Transfer document wise /line item wise , transfer line item wise
Only document will be generated
Path: Accounting – Controlling-Cost center accounting –Actual postings-Report line
items-Enter (Transaction code is KB61)
Select document no. :13
Company code :BIL
Fiscal year :2008
Execute
Double click on line item no.1
Amount under new account assignment 150000
Cost center :Dept B
Select new item button
Select next button
Amount under new account assignment 50000
Cost center : Dept C
Save
Go and see the cost center report KSB1
Give the cost center Dept A
To view cost element wise to total
Select cost element column
Select sub totals button
(Note:That is dues cost element wise total)
Repot costs (Business transaction RKU1)
This is used when we split a cost center in to number of cost centers or wrong cost center
postings.
Only CO document will be generated
Transfer cost element wise (GL account wise)

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Path : Accounting-Controlling-cost center accounting –Actual postings-manual
reporting of costs – Enter (Transaction code is KB11N)
Cost center (old) : Dept A
Cost element 400100 Salaries
Amount :100000
Cost center new : Dept C
One more cost center (old) : Dept A
Cost element :400300 Rent
Amount :25000
Cost center (new) : Dept C
Enter
Select save button or Ctr+S
Period lock:
FI CO
A) Transaction which effect
FI and CO eg:COIN
To open To open
B) Transaction which effect
only CO Eg.RKU3, RKU1
No check To open
C) Transaction which effect
only FI Eg.Debit balance
sheet and credit balance
sheet
To open No check
Sept .08 March Oct 2008 to March 2009
An expenditure posting in FI for September. We can’t post since periods are not open.
Path: Accounting – Controlling-cost center accounting-Environment –Period lock-
chang (Tr.code is OKP1)
Fiscal year :2008
Select actual button
Select period :01
Select lock period button
Save

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Set controlling area :(OKKS):
Path :up to Environment the path is same Set controlling area
Give the controlling area :BIL
Enter
Real time integration of controlling with FI on line reconciliation ledger
This is used when we get for 2nd
scenario (no.of company codes having one controlling
area ) all the company codes should use same Char of Accounts.
Planning cost center wise
Path :Accounting –Controlling cost center accounting –Planning –Cost and Activity
inputs –Change (KP06)
Version :select 0 (Original budget)
From period :1
To period :12
Fiscal year :2008
Select next page or page down button
Cost center group :BILHIER
Cost element From :400000
Cost element To :499999
Free Form Bsed
If we select radio button If we select from based radio button
We have to select cost element from the
drop down list and plan against the
Climents
The cost element list in a available on
screen plant against cost elements
Select form based radio button
Select overview screen button
For cost element 400100 Plan Fixed cost 1500000
Distribution key 1 Equal distribution
Select cost element 400100
From the menu select Goto –Period screen
Select back arrow
Fro cost element 400300 Plan fixed cost 960000

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Distribution key 1
To plan for Dept B –Select next combination button
To go back to previous dept –select previous combination button
Save
To view variance report cost center wise
Path :Accounting – Controlling-Cost center accounting –Information system –Reports
for cost center accounting –Plan /Actual comparisons –Cost centers: Actual
/Plan/Variance (Tr code is S_ALR_87013611)
Fiscal year :2008
From period :10
To period :10
Plan version :0
Cost center Value :Dept A
Execute
Keep the cursor on Salaries A/c actual costs amount
Select call up report button
Double click on cost centers : Actual line items keep the cursor on the first line item.
Select document button

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ONLINE RECONCILIATION LEDGER
Reconciliation used when
when number of company codes having one controlling area – 2nd
Scenario
It can be at controlling area
All the company codes should use the same Chart of Accounts
due to online reconciliation ledger, it generated in a document in FI
BIL Controlling area
|
------------------------------------------------------------------------
| |
Company code BIL company code BSL
| |
------------------------------------ ------------------------------------
| | | | | |
Dept A Dept B Dept C Dept X Dept Y Dept Z
If salaries paid and posted FI at (F-02)
Salaries A/c
----------------------------------
100000 |
|
Out of 100000 salaries 20000 belongs to company code BIL
If we use the reconciliation account at cost center level and the 20000/- is transfer to
company code BSL (Dept X) it passes the entry in financial automatically
Here Reports at – No FI records
In BIL Books
BSL Dr 20000
To Salaries a/c 20000
In BSL books
Salaries account Dr 20000

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To BIL a/c 20000
Customization at Finance:
To copy company code BIL customization including accounting to BSL
Path :SPRO-Enterprise structure – Definition –Financial accounting –Edit, copy,
Delete, Check company code(T.Code EC01)
Double click on copy, delete, check company code
From the menu select organization object – copy organization object
From Company code :BIL
To company code : BSL
Enter
Select Yes for the message (for copy the GL accounts)
Select No button allocate a different local currency
Short description :Customization for Birla Steel Limited
Press enter
Enter once again to saving the request
Go on press enter till you got the message company code BIL copied to BSL with out 75
number range object
Select back arrow
Double click on edit company code data
Select position button
Give the company code :BSL
Enter
Select company code : BSL
Select address button
change the company name to : Birla Steel limited
Enter
save and Save in your request button

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Assign company code to company
Path :SPRO-Enterprise structure-Assignment –Financial accounting-Assign
company code to company
Give the company code : BIL
Enter
For the company code :BSL assign BIL(group name)
Document type SA should allow inter company postings: (OBA7)
Select type : SA
Select details button
Select inter company postings check box
Save
Creation of GL Masters FS00
BIL Books BSL Books
1) FI/CO reconciliation account under only
expediter group which should not be a cost
element 400150 –Personnel group
1)FI/CO reconciliation account under any
expenditure group which should not be a
cost element 400150 personnel group
2) Birla Steels limited, current assets,
Loans & Advances 200160 Birla Steel
Limited
2)Birla Industries Limtied current Assets,
Loans & Advances 200161 – Birla
Industries Limited
Same chart of accounts
BIL chart of accounts BIL
BSL chat of accounts BIL
When we use same chart of accounts, account description should be same in all the
company codes.
In BSL books – If we create account No.200160 – It takes Birla Steels Limited- we can
not crate our account in our books.
Creation of GL masters FS00
Give the GL account no. :400150

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Company code :BIL
Select with template button
Give the GL account o. :400100 Salaries
Company code : BIL
Enter
Change short text & GL account long text to FI/CO reconciliation account
Select create / bank /interest tab
Field status group change to ‘ICCF’ CO < -> FI reconciliation posting
Save
Give the GL Account No.200160
Company code : BIL
Give the GL Account No.200100 Cash A/c
Company code :BIL
Enter
Select type/Description /tab
Change short text GL account long text to BIRLA STEEL LIMITED
Select create / Bank/Interest tab
Filed status group change to G067
Deselect relevant to cash flow check box
Save
Give the GL account No.400150
Company code :BSL
Give the GL account 400150
Company code :BIL
Enter & Save
Company code :BSL

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Company BIL
Enter
Select type / Description tab
Change short text +GL long text to Bila Industries limited
Save
Prepare cross company code Transaction (Transaction code is OBYA)
Path :SPRO-Financial accounting-GL accounting –Business transactions-Prepare
cross company code transactions
Company code 1 BIL
Company code2 BSL
Enter
Posted in BIL
cleared against BSL
Debit posting key :40
Account debit :200160 ( Birla Steel Limited)
Credit posting key :50
Account credit :200160
Posted in BSL
Cleared against BIL
Debit posting key :40
Account debit :200161 Bilra Industries Limited
Credit posting key :50
Account credit :200161
Save
CO customization ( tr code is OKKP)
Maintain controlling area
Assign company BSL to controlling area BIL
Select controlling area :BIL
Select details button
Company code to controlling area: Select cross company code cost accounting
Reconciliation ledger document type :SA (GL accounts document)
Double click on activate components / control indicators folder
Select company code validation check box
Double click on assignment of company codes folder

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Select company code :BIL
Select copy as button
Change the company code to BSL
Enter & save
Activate reconciliation ledger (Tr code KALA)
Note: Follow through path
Path:SPRO –Controlling –Cost element accounting-Reconciliation ledger-Activate
deactivate reconciliation ledger
Double click on activate reconciliation ledger
Select Execute button
Define adjustment accounts for reconciliation posting (Tr code is OK17)
Same path
Double click on define accounts for automatic postings
Select change account determination button
Save
Reconciliation account: Give the account no.400150 FI/CO
Save
FI CUSTOMIZATION
Define variant for real time integration:
Path :SPRO-Financial accounting (new) Financial accounting global setting (new) –
Ledger-Real time integration of controlling with financial accounting –Define variants
for real time integration
Variant for real time integration B1
Select real time integration active check box

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Select account determination active check box
Key date active from :01.04.2008
Document type :SA
Ledger group (FI) :0L
Text variant for :BIL
Select cross company code check box
Select cross business area check box
Select cross profit center check box
Save
Assign variants for real time integration to company code:
Same path.
Company code :BIL
Variant :B1
Company code :BSL
Variant :B1
Save
Creation of cost center for company code BIL (KS01)
Give the cost center department X
To date :31.12.9999
Reference cost center :Dept A
Enter
Change the name to :Dept X
Change the description to cost center dept X
Change company code to BSL

29
Select save button or Ctrl+s
Repost costs (F-02)
Cost center old :Dept A
Cost element :400100 Salaries
Amount :20000
Cost center new Dept X
Save
To make text filed optional for field status group G004 cost accounts(Tr.code is
OBC4)
Select field status variant for BIL
Double click on field status groups folder
Double click field status G004
Double click on General data
Text make it optional entry field
Press enter to save in our request
Go and see the FI documents (Tr.code is FB03)
Select document list button
Give the company code :BIL
Enter the date :From date To Date
Execute
Double click on document no.
Select back arrow
Chang the company code to BSL
Execute
Double click on document no.

30
CROSS COMPANY CODE POSTINGS
Company code :BIL BSL
Outstanding expenses of BSL paid by BIL
BSL Dr 25000 Outstanding 25000
To Bank 25000 To BIL25000
Paying company code : BIL
Credit Bank :BIL 25000
Debit outstanding exp :BSL 25000
Use the Transaction code :F-02
Give the document date :Today’s date
Type :SA
Company code :BIL
Posting key :50
Account no. :200105 SBI CA
Enter
Amount :25000
Business area :BILH
Text :outstanding expense payment on behalf of BSL
Posting key :40
Account no :100500 out standing exp.
New company code :BSL
Enter
Amount :*
Business area :BILH
Text :+
From the menu select document Simulate
Double click third line item
Business area :BILH
Text :+
Select next item button
Business area :BILH
Text :+

31
Select save button or Ctr+S
Posting by
Company code :BIL
Cross company code no. :15 08
FI posted by
Company code :BSL
Cross company code no. :2 08
By viewing the cross company code document number – We know which company code
has initiated the posting.
Select continue button
Accrual orders (Imputed cost calculation)
This is used for month end provision only in CO
This is used for irregular expenses like Bonus
Cost element category should be 3
Accrual/ Deferral per surcharge
Define CO.No.range in interval for business
Transaction :KAZ1 – Actual cost center accrual
FI Month end provision
1. Accrual / Deferral document
A. Bonus provision for Nov
30.11.2008 Bonus A/c Dr.10000
To Out standing exp. 10000 Dept A
B. Reverse next month 1st
01.12.2008
01.12.2008 Outstanding Exp. Dr.10000
To Bonus A/c 10000 Dept A
C. Bonus provision for Dec.
31.12.2008 Bonus A/c Dr 20000
To Out standing exp 20000 Dept A
2. Open item management
A). Bonus provision for Nov.
30.11.2008 Bonus A/c Dr10000
To Outstanding exp. 10000 Dept A
B). Bonus provision for Dec.
31.12.2008 Bonus Dr.10000
To Outstanding exp 10000 Dept A

32
Month end provision
Number of companies will not prepare profit & loss and Balance sheet every
month, the will not make provision in the books every month in year end,
companies follow accrual basis of accounting. They make provisions for the
whole year.
Expenditure for all the months Less (other than March)
Expenditure for March More
In SAP when we take production an accounting entry will be generated
automatically – Finished goods valuation will be based on costs for the month.
Stock valuation will be accrual orders Lower in all month other than March
Accrual orders Higher in March
Create overhead structure
Salaries 100000
Bonus -10% on salaries 1000 Debit cost center credit cost center
Dep Dummy (No accounting entry)
In the month end Dept A
Bonus 1000 allocation to Dept A costs will
be allocated to production orders –
There by Dept A will be zero-
production valuation will be correct.
Dept Dummy
Bonus 1000
In the year end – in FI when we make bonus provision for the whole year.
31.03.2009 Bonus A/c Dr 1200000
To Outstanding 1200000 Dept Dummy
Dept dummy values in the year end
31.03.2009 Dept dummy 1200000 April to March 10000*12 = 120000
====== =====
In the year end Dept dummy values will be zero.
Creation of GL master bonus account – personnel cost (FS00) group:-

33
Give the GL Account No. :400105
Company code :BIL
Give the GL account no. :400100 (salaries)
Company code :BIL
Enter
Change short and GL account long text to Bonus account
Save
Select edit cost element button (F8)
Valid from date :01.04.2008 to 31.12.9999
Enter
Cost element category :Select 3 accrual deferral per surcharge
save
Creation of cost center – Dept dummy (KS01)
Give the cost center : Dept dummy
Enter
Change name to Dept dummy
Change description to cost center: Department dummy
Select save button
Maintain overhead structure:
Path:SPRO-Controlling –Cost element accounting-Accrual calculation –percentage
method-maintain overhead structure (Transaction code is KSAZ)
Select create over head structure button (F7)
Over head structure :BIL1
Description :BIL overhead structure
Select save button
Row Base
10 B1
Enter
Give the name salaries
Select create button
Row O/H rate (Over head rate) Description FR To CR
20 B2 Bonus 10 10 B3

34
Enter
Give the name Bonus
Dependency :KRS1(controlling area)
Select create button
Save
Keep the cursor on overhead structure BIL1
Select assignment button (F5)
Select actual accrual radio button
Select continue button
Valid from valid to overhead structure
1 2008 12 2008 BIL1
Save
Double click on overhead structure BIL1
Keep the cursor on B1
From the menu select Goto calculation base
From cost element 400100
Save
Kept the cursor on B2
From the menu select Goto overhead rate
Valid from Valid to Actual overhead
1 2008 12 2008 10%
Save
From 10 To 10 Crdit B3
Keep the cursor on B3
From the menu select go to credit
Company code :BIL
Business area :BILH
Valid to :12 2008
Cost element :400105
Cost center :Dept Dummy
Save

35
Define CO.no range interval for the business transaction KAZ1-Actual cost Center
accrual:(Transaction Code KANK)
Select maintain group button
Double click on KAZ1- Actual cost center accrual
Select CO.No range interval for BIL check box
From the menu select Edit-Assigned element group
Save
1. Posting of salaries for the month of August F-02
Give the document date end posting date :03.08.2008
Date :03.08.2008
Type :SA
Company code :BIL
Posting key :40
Account no. :400100 Salaries A/c
Enter
Amount :100000
Cost center Dept A
Posting key :50
Account no :200105 SBI current Account
Enter
Amount :*
Business area :BILH
Text :+
From the menu select document Simulate and save
Accrual calculation (KSA3)

36
Accounting – Controlling –Cost element accounting-Actual postings –Accrual
calculation
select cost center radio button
give the cost center : Dept A
period :5
fiscal year :2008
deselect test run check box
select details list check box
Execute
Select next list level button
Give the cost center :Dept A
Posting date :01.08.2008 to 31.08.2008
Execute
Select back arrow
Give the cost center : Dept dummy
Execute
Bonus provision in the year end in FI Transaction F-02
Give the document date & Posting :31.03.2009
Type :SA
Company code :BIL
Posting key :40
Account no. :400105 bonus account
Enter
Amount :10000
Cost center :Dept dummy
Text :Bonus provision for the year 2008-09
Posting key :50
Account :100500 outstanding exp.
Enter
Amount :*
Business area :BILH
Text :+
Document – Simulate and save
Give the cost center :Dept dummy
Posting date :01.04.2008 to 31.03.2009

37
Execute
STATICALLY KEY FIGURES (SKF)
This is used as a basis for allocation of costs from one cost center to other cost
centers.
Eg. Employee / Area/ Telephone calls
(service Dept) (Production departments)
Salaries 500000 No.of employee of A and B
Rent 100000 Sq.meter are of A & B
Telephone Exp25000 No.of telephone calls of A & B
Enter CO. No range interval for the business transaction.
RKS (Enter statistical key figures)
SKF category Fixed Total
Fixed Total
If we choose fixed, values If we choose total
To SKF are common for all months in the
year, if we don’t make changes in between
Eg: Employee / Area
We have to enter values for SKF, for each
and every month
Eg: Telephone calls
No.of Employees No.of Telephone calls
April 2008 100 100 Aprl 2008 1000
May 2008 | | May 1500
June | | June 2000
July | | July
Aug | | Aug
Sep | | Sep
Oct | 150 Oct
Dec | | Dec
Jan.’09 | | Jan 2009
Feb | | Feb
March | | March

38
Define co.no range interval for the business transaction RKS-Enter Statistical key
figures Transaction Code is (KANK )
Double click on RKS
From the menu select Edit Assignment element group.
Save
Ignore the warning message press enter.
Create Statistical key figures
Path :Accounting – Controlling –cost center accounting master Data-Statistical key
figures – Individual processing – Create (Tr.Code is KK01)
Give the statistical key figure :EMP
Enter
Give the Name :Employee
Statistical key figure unit of measurement : Select EA each
Key figure category :Select fixed values under radio button
Save
Path : Accounting –Controlling – Cost Center accounting –actual postings-statistical
key figures-Enter (Tr.code is KB31N)
Received cost center : Dept A
Statistical KF : EMP
Total quantity :500
Received cost center : Dept B
Statistical KF :EMP
Total quantity :250
Save
Period end closing
In the month end, we allocate costs from one cost center to other cost centers

39
(Service department) (Production departments)
Salaries 500000 no.of employee of A and B
Wages 300000 No.of employee of A and B
Rent 50000 Percentage basis
Basis of allocation can be percentage method statistical key figures method /activity type
(machine hour / labour rate)
Allocation methods:
1. Assessment :
A) Transfer primary cost postings and secondary cost postings.
Dpt X Dept C Dept A Dept B
Wages 100000 Salaries 500000 Salaries 400000 Salaries 300000
Wages 300000
Rent 50000 Add all 85500 Add all from C 95000 10%
All from Dept X 100000
---------- ----------- -----------
Less 950000 1255000 395000
===== ======= =======
Allocation
Primary cost postings
Secondary cost postings
B) Receiving cost centers can’t track original cost element Dept A and B will
not show the transfer value –how much salaries wages and rent.
C) Define Co.No.range interval for business transaction RKIU actual
overhead assessment.
2. Distribution
A) Transfer only primary cost postings
B) Receiving cost center can track original cost elements.
C) Sender should be only cost center
D) Define Co.No.range interval for the business transaction RKIV actual
overhead distribution.
3. Periodic reposting:
A) Transfer only primary cost postings
C) Sender can be a cost center or interval order.
D) Define Co.No.range interval for the business truncation.
RKIB periodic reposting.

40
4. Indirect activity allocation.
A)Transfer only primary cost postings.
C) Sender should be only cost center.
D) Transfer quantities as well as values.
E) Define Co.No.range interval for the business truncation.
RKIL Indirect activity allocation .
Which over method we follow, we have to create cycles.
When the allocation basic is different for the cost elements in the cost center, we have to
create number of cycles for number of segments for a cycle.
(Service Department) (Production departments)
Salaries 500000 No.of employees of A and B
Wages 300000 No.of employees of A and B
Option 1:
Cycle 1 Cycle 2
(Salaries and wages allocation) (Rent allocations)
| |
Segment 1 Segment 1
Option 2
Cycle 1
|
----------------------------------------------
| |
Segment1 Segment2
(Salaries and wages allocation) (Rent allocation)

41
ASSESSEMENT
1. Creation secondary cost element : i.e (that is) assessment cost element :
Path: Accounting –Controlling –Cost element accounting-Mater data-Cost
element –Individual processing –Create secondary (KA06)
Enter
Valid from :01.04.2008 to 31.12.9999
Enter
Name and description :Assessment cost element.
Cost element category :42 (Assessment )
Save
2. Define Co.No.range interval for the business truncation- RKIU-Actual overhead
assessment
Use the Truncation code :KANK
Double click on RKIU
From the menu select Edit –Assignment element group.
Creation of assessment cycle:
Accounting –Controlling –Cost center accounting-Period and closing –Current
settings–Define assessment (Tr.code S_ALR_87005742)

42
Give the cycle :BIL1
Start date :01.04.2008
Enter
Text : Assessment cycle
Select iterative check box.
Select iterative check box
Dept C Dept A 60% 300000 54000
Salaries 500000 Dept B 30% 150000 27000
Less :Allocation 500000 Dept Z 10% 50000 9000
--------
0
Add: Allocation 90000
Less :Allocation 90000
-------
0
Add: Allocation 1800
Dept Z
Wages 400000 Dept X 50% 225000 4500
Add: Allocation 50000 Dept Y 30% 135000 2700
--------
450000 Dept C 20% 90000 1800
Less : Allocation 450000
-------
0
====
We have to run number of items to make both cost center values zero. If we select
interactive check box, system will run number of items automatically till both cost center
values become zero.
Select attaché segment button.
Segment name : Segment 1
Description : Salaries allocation
Assessment cost element :select 1000000
Sender rule :select posted amounts
Share in % :100
Select actual value origin radio button
Receiver rule :Select variable portions
Variable portion type :Select actual statistical key figures

43
Select sender / receivers tab
Sender cost center :Dept C
Under Cost element :400100 (Salaries a/c)
Under Receiver cost center group :BILHYDPROD
Select receiver tracing factor tab
Statistical key figure :EMP
Select receiver weight factors tab
Select save button or Crl+S
Select attaché segment button
Segment name segment2
Description :Rent allocation
Assessment cost element :1000000
Sender rules :Posted amount
Sharing in % :100%
Select actual value origin radio button
Select receive rule :Fixed percentages
Select senders/ receivers tab
sender cost center :Dept C
Cost element :400300 (Rent )
Receiver cost center group : BILHYDPROD
Select receiver tracing factor tab
Dept A 70
Dept B 30
Save
Go and see the cost center Report (Tr code is KSB1)
Give the cost center :Dept C
Posting date :01.10.2008 to 31.10.2008
Execute
Select cost element column
Select sub totals button

44
Dept C A B
Salaries 1500000 No.of employees
500 250
100000 50000
70 30
17500 7500
Execution of assessment cycle:
Path :Accounting –Controlling –Cost center accounting –Period end closing-Single
functions-Allocations –Assessment (KSU5)
Give the period :7 (October)
Fiscal year :2008
Deselect text run check box
Select details list check box
Cycle select :BIL1
Execute
Select receiver button

45
INTERNAL ORDERS
This is used to view costs for a specific task.
Eg. A) Vehicle wise running expenses
Management has to task decision whether to sell the (or) keep the vehicle in company
A) petrol expenses for the vehicle B) Repairs to the vehicle
It we take GL accounts in FI –we will not create each vehicle wise petrol expenses and
repairs account.
In cost center accounting –vehicles will be under administration cost center and the petrol
expenses repairs and administration expenses will be posted to administration cost center.
By creating vehicle as an internal order we can get the costs.
B) Telephone expenses:
If we want to know telephone wise expenses in FI –we will have one account for all
telephones.
If we take cost center –It will be entered in administration cost center - We can not
get telephone wise expenses directly.
By creating telephone as an order we can get telephone wise expenses.
C) Production order costs
In a month no. of production orders will be executed. Some production orders
consume more raw material and same production orders consume less raw material.
If FI we have only GL account raw material consumption – We don’t know order
wise consumption.
By crating production order, we can get order wise costs.
D) Exhibition costs
Company is conducting an exhibition
Salesmen salaries One account
Conveyance Different account
Advertisement Different account
Discounts Different account

46
We don't know the exhibition costs by creating an order we can get exhibition costs
Orders will be of 2 types
1)Real orders 2)Statistical orders
Settlement is possible settlement not possible
We can settle order statistical orders are used for
decision making
To Cost Center
(Internal settlement)
From Co to Co
GL Accounts
Assets
(External settlement )
(From CO to FI)
When we transfer from cost center –To cost centers allocation by assessment /
Distribution periodic reposting / Indirect activity allocation.
When we transfer from Internal order settlement.
Eg. Telephone expenses Dr 50000 Cost center Dept
Order Tel no.66110883
To Bank 50000
The cost will be allocation to production
orders from CO
In the production order valuation we can’t take.(50000+50000)
We have to take only one time 50000
When we are posting to no. of cost objects are will be real and others will be statistical.
At the time of order creation there is a statistical order check box.
A) When we select statistical order is statistical order check box.
Order is statistical (Automatically cost center will be real)
B) If we don’t select statistical order check box
Order is real (Automatically cost center will be statistical )
Statistical order :
Telephonewise expenses order we create as statistical order.
Telephone expense Dr 50000 Cost center Dept A
Order Telephone no.66611983 Statistical
To Bank 50000
Cost Center Dept A
Telephone expenses 50000 Allocation to paid order 50000

47
Cost center Dept A – Zero
In the month end we allocation costs from Dept A to production orders there by cost
center Dept A will be zero.
Order telephone no.66611983
Telephone expenses 50000
Management can see telephone wise expense at any point of time afterwards.
Suppose we create order as real order
Telephone expenses Dr 50000 Cost center Dept A
To Bank 50000 order telephone no.66611983 Real
Cost center c data
Telephone Expenses 50000 Order Telephone no.6661987
Telephone expenses 50000 Allocation to production 50000
Order will be zero
In the month end we allocate cost from order telephone no.66611983 to production order
there by order will be zero.
Afterwards management can’t see telephone wise expense.
Creation of order types:
Path : SPR O –Controlling –Internal orders – order master data-Define order types
(KOT2_OPA)
Order category :Select 01 Internal order (Controlling)
Enter
Order type :BILT
Description :Telephone orders for BIL
Planning profile :select 000001 (General budget /plant profile)
Object class :Select Over head cost
Select release immediately check box
Save
We get message no.range not processed
Select assign /change interval button beside no.reage interval

48
Double click order type :BILT
Select motor pool A-ZZZZZZZZZZZZ(External)
From the menu select Edit Assign element group
Save
Creation of filed status group by making cost center and internal order required
entry fields (OBC4)
Select field status variant :BIL
Double click on field status group folder
Select field status group G004 cost accounts
Change the filed status group to G002
Change the text to cost accounts (CC & IO required) IO =Internal order
Enter
Save CC=Cost Center
Double click on G002
Double click on additional account assignment
CO /PP order make it required entry field.
Save
Creation of GL master telephone expense (FS00)
Give the GL account no.400305
Company code :BIL
GL account 400300 Rent account
Company code :BIL
Enter
Change short text and GL a/c long text to Telephone expenses
Select crate / Bank/Interest tab

49
Change the filed status group to G002
Save
Select edit cost element button
Enter
Cost element category :Select 1
Save
Creation of Internal orders:
Path :Accounting –Controlling-Internal orders-Master data-Special functions –Order
–Create (Tr code is KO01)
Order type :Select BILT
Enter
Order no. :BIL 66611983 (Telephone no.)
Description :Telephone order no.66611983
Company code :BIL
Business area :BILH
Select control data tab
Select statistical order check box
Save
One more order
Order type :BILT
Enter
Order :BIL66611984
Description :Telephone order no.66611984
Company code :BIL
Business area :BILH
Select statistical order check box
Save

50
Creation order group
Up to master data the path is same Order group Create (Tr code is KOH1)
Give the order group name :BILHYDTEL
Enter
Description :Hyderabad order group (GRP)for BIL
Select insert order button(Select menu bar Edit Order Insert Order)
Select to orders :BIL66611983
:66611984
Save
Posting of transaction in FI (F-02)
Document date :Today’s date
Type :SA
Company code :BIL
Posting key :40
Account no. :400305 Telephone exp
Enter
Cost center :Dept A
Order :BIL66611983
Text :Telephone expenses
Posting key :50
Account no. :200105 (SBI current account )
Enter
Amount :*
Business area :BILH
Text :+
From the menu select –Document –Simulate and save
To view internal order wise report
Path :Accounting –Controlling-Internal order-Information system-Reports for Interval
orders -Line items –Order -Actual line items-(Tr. Code is KOBI
Give the order no.BIL66611983
Remove the order group

51
Execute
Keep the cursor and telephone expense line item select document button
Planning order wise
Path :Accounting –Controlling –Internal orders –Planning –Cost and activity inputs –
Change (KPF6)
Version :0
From period :8 (November)
To period :8
Fiscal year :2008
Give the order no. :BIL66611983
Cost element :400305 Telephone expense
Select from based radio button
Select view screen button
Total plan cost :75000
To view variant report order wise
Path :Accounting Controlling-Internal order –Information system-Reports for internal
order-Plant /Actual comparisons-Order :Actual / plan / Variance (S_ALR_87012993)
Fiscal year :2008
From period :8 (Current month)
To period :8
Pant version :0
Order values :BIL66611983
Execute
Real orders:
They are used for vehiclewise expenses
Petrol expenses Dr 50000 Order no.AP9Z1234

52
To Bank 50000
In the month end:
Cost center Dept A
Order no.AP9Z1234 Settle to Cost center Dept B
Cost center Dept C
Settlement can be percentage basis / ratio basis /Amount basis
Order No AP9A1234
Petrol expenses 50000 Allocation Dept A 25000
Dept B 15000
Dept C 10000
------- ------
50000 50000
==== ====
Order will be zero
Petrol expense Dr 50000 Cost center:Common
Order No.AP9Z1234 Statistical
To Bank 50000
In the month end from cost center common allocate to Dept A, Dept B and Dept C by
assessment / Distribution / Periodic posting /Direct activity allocation.
Cost center common
Petrol Expenses 50000 Allocation to Dept A 25000
Dept B 15000
Dept C 10000
--------- -------
50000 50000
==== =====
Cost center will be zero
Order no.AP9Z1234
Petrol expense 50000
=====
Management can see vehicle wise expenses at any point of item afterwards.
Creation of filed status group by making only internal order required entry filed
(OBC4)

53
Select filed status variant :BIL
Double click on filed status group folder
Select field status group G002
Change field status group to G010
Change the text to cost accounts (IO required )
Enter and save
Double click on G010
Double cock additional account assignments
Cost center make it optional entry field
Save
Creation of GL master petrol expense under administration group (FS00)
Give the GL Account no. :400310
Company code :BIL
Give the GL account no.400300 Rent account
Company code :BIL
Enter
Change short text and long text to petrol expenses
Select create/bank /interest tab
Field status group :G010
Save
Enter
Cost element category :01
Save
Creation of secondary cost element i.e. Statement cost element (KA06):

54
Give the cost element :1000001
Enter
Name and description settlement cost element
Cost element category :Select 21 internal settlement
Save
Maintain allocation structure:
Path :SPRO-Controlling –Internal orders-Actual posting- Settlement-Maintain
allocation structures
Allocation structure :B1
Text :BIL allocation structure
Save
Select :B1
Double click assignments folders
Assignment :01
Text :Vehicle expenses settlement
Save
Select :01
Double click on source folder
From cost element :400310 Petrol expenses
Save
Double click on settlement cost elements folder
Receiver category :Select CTR cost center
Settlement cost element :1000001
Save

55
Petrol expenses will be settled to cost center by using secondary cost element settlement
cost element.
Through orders.
Maintain settlement profiles:
Same path
Double click on maintain settlement profiles
Settlement profiles :BIL1
Description :BIL settlement profile
Allocation structure :B1
Select to be settled in full radio button
Double click on CTR cost center
Select % settlement check box
Select equivalence number check box
Select amount settlement check box
Under valid receivers
For cost center :Select settlement required
Max.no. distribution rules :999
Residence time :12 months
Save
Rule 1:
Order no.AP9Z1234 settle cost center Dept A 30000
Petrol expenses 50000 settle cost center Dept B 15000
Dept C 5000
Rule 2
Order No.AP9Z1234 Settle to cost center Dept A 85%
Petrol expenses 50000 Settle to cost center Dept B 10%
5%
Order no.AP9Z1234 settle to cost center Dept 4:
Petrol exp 50000 Dept 3:
Dept 1:

56
Maintain number range for settlement documents:
Go through Same path (Tr.code is SNUM)
Double click on controlling area BIL
Select Standard accounting document check box
From the menu select Edit Assign element group
Save
Creation of order type (KOT2_OPA)
Order category :Select 01 Internal order (controlling)
Enter
Give the order type :BILV Vehicle order type BIL
Settlement profile :BIL1
Budget profile :0000001 (General budget profile)
Object class select :Overhead costs
Select release immediately check box
Save
Ignore the message press enter save in your request
Select assign /Change intervals button beside no.range interval
Double click on BILV
Select motor pool A-ZZZZZZZZZZZZZZ external check box
From the menu select Edit –Assign element group.
Save
Define co.no.range interval for the business truncation K0A0-Actual settlement. Use
the transactions code (KANK)

57
Double click on KOAO actual settlement
Select co.no.range interval for BIL check box
Form the menu select Edit –Assign element group.
Save
END USER AREA:
Creation of internal order (KO01)
Give the order type :BILV
Enter
Give the order :AP9Z1234
Description :Vehicle no.AP9Z1234
Company code :BIL
Business area :BILH
Deselect statistical order check box
Select settlement rule button
Category :CTR cost center
Settlement receiver :Dept A
Give the percentage :70
One more
Category :CTR
Settlement receiver :Dept B
Percentage :30
Save
Posting of petrol exp F-02
Type :SA
Company cod :BIL
Posting key :40

58
Account no. :400310 petrol exp.
Enter
Give the order no. :AP9Z1234
Text :Petrol exp.
Posting key :50
Account no. :200105 SBI current account
Enter
Amount :*
Business area :BILH
Text :+
From the menu select menu document –Simulate and save
Actual settlement :
Path :Accounting –Controlling-Internal order-Period end closing-Single functions-
Settlement –Individual processing (K088)
Give the order :AP9Z1234
Settlement period :8 (current month)
Fiscal year :2008
Deselect test run check box
Select check transaction date check box
Select details list button
Note : Order means overall expenses Eg: Vehicle Expenses
Cost Element means each item wise :Eg.Vehicle expenses for Petrol, Repairs,
Driver salary etc

59
BUDGETING AND AVAILABILITY CONTROL
For budgeting SAP has given availability
control
Order no.AP9Z1234
Budget amount 500000
Option 1 Option2 Option 3
Give Give warning Give
Warning To the user Error1
To the user And inform to
Budget manager
If actual amount exceeds 85% of budget 425000
Or
If the variance is above 20000 i.e actual 5200000
Or
Both Whichever activity comes first
Or
If a actual amount exceeds 70% of budget go for option1
If actual amount exceeds 85% of budget go for option 2
If actual amount exceed 100% of budget go for option 3
When we do budgeting it generate a document –We have to give budgeting –No. range
interval only for 04 (Hard coded by SAP)
This is given at client level and not at controlling area level –it is not year specify.
Note : Order Eg.Vehicle Expenses
Cost element :Eg.Vehicle for petrol, repairs,Driver salary etc.,
Maintain no.range for budgeting:
Planning Budgeting
1. We can plant cost element wise in the
order
1.Budgeting will be done order wise
2. We can do planning period wise in a
year (Month wise)
2. Budgeting should be done year wise
3.Micro level (Lower level) 3. Marco level (High level)

60
Path :SPRO-Controlling-Internal orders-Budgeting / availability control-Maintain
no.ranges for budgeting (Tr code is OK11)
Select change intervals button
Define tolerance limits for availability control
Same path
Profile :select 000001 General budget profile
Tr.group :++ all activity groups
Action :select 2 waring with mail to person response
Usage :85
Save
Specify exempt cost elements from availability control
Same path
Petrol expenses
Repairs
Drivers salary is Fixed cost
We can specify when we post to driver’s salary all with order AP9Z1234 –Even if, it
exceeds 85% of budget no. message need to be given.
It is known expenditure
Cost element :400100 Salaries account
Save
Maintain budget manager
Same path
Order :BILV

61
Object class :OCost (Overhead cost)
User name :SAP user (budget manager)
Save
Budgeting order wise (END USER AREA)
Path :Accounting-Controlling –Internal order-Budgeting-Original budget –Change
(Tr code is K022)
Order :AP9Z1234
Enter
For the period :500000 (Budget amount)
Over / budget also 500000
From the menu select Extras –Availability: Control –Activate
Save
Posting of petrol expenses (F-02)
Type :SA
Company code :BIL
Posting key :40
Account no. :400310 Petrol expenses
Enter
Order :AP9Z1234
Text :Petrol expense
Posting key :50
Enter
Give the amount :*
Business area :BILH

62
Text :+
From the menu select –Document –Simulate and save
To view in box of the budget manager
Path :SAP Menu Office –Work place (Tr code is SBWP)
Select inbox folder
We get a message accounting document no.

63
PROFIT CENTER ACCOUNTING
This is used to view profitability division wise /product wise /location wise if business
area is not use in FI
Idea scenario
Company FI
|
Company code FI
|
Business area FI
(Location)
|
----------------------------------------------------------------------------------------
| | | |
Steel Cement Pharma Co-profit center
Division Division Division Accounting
| |
Product wise Co profitability
Analysis
Option 1 Option 2
Hyderabad location HYD BGL MOM
| | | |
Steel Cement Pharma Steel cement Pharma
Profitability Profitability Balance sheet
The advantage of profit center accounting is it derives profit center automatically though
derivation rules.
A) In case of expenditure Tough cost centers
B) IN case revenues Automatic account assignment
C) In case of balance Though business area
Sheet it items (Applicable for option 2)
Eg:a) At the time of creation of cost center assign profit center
Dept A-Assign profit center steel

64
b) At the time of posting
wages a/c Dr 500000 Dept A
To Bank 500000
It updates cost center Dept A as well as profit center steel.
We have to create dunning profit center. At the time of posting, when there is no
derivation rules, system updates dummy profit center. Transfer form dummy profit center
to respective center. Create derivation rule so that future transactions will not go to
dummy profit center. They will go to respective profit centers.
Set controlling area (OKKS)
Path :SPRO-Controlling –Profit center accounting-Basic settings-Set controlling area
Enter
Maintain controlling area settings: (OKE5)
(Follow through path )
Path :Up to base settings the path is same- Controlling area settings-Maintain
controlling area settings
Standard hierarchy :BIL
Select elimination of business volume check box
Profit center local currency type :Select 20 Controlling area currency
Select confirm button
Select store truncation currency check box
Save
Elimination of internal business volume
Purchase Material no. 1 Profit center steel
Order Vendor no. 1234
| Plant HYD
| Profit center Steel
| Qty 1 Kg
| Rate 100
Goods
Receipt
It should no take in steel profit center 100+100
It should take only one time

65
Create dummy profit center
Path :SPRO-Controlling-Profit center accounting-Master data-Profit center-Create
dummy profit center(Tr code is KE59)
Double click on dummy profit center
Give the dummy profit center :BIL dummy
Select basic data button
Name :BIL dummy
Description :Dummy profit center for BIL
Profit center group :BIL
Save
Set control parameters for actual date
Path : Up to basis settings the path is same Controlling area settings -Activate direct
postings-Set control parameters for actual data (Tr code is 1KEF)
From year :2008
Select Line items check box
Select online transfer check box
Save
Maintain plan versions
Up to activate the path is same
Plan version Maintain plan version
Select version :0 Plan /Actual Version
Double click on settings for profit center accounting folder
Year :2008
Select online transfer check box
Select line items check box
Exchange rate type :B (bank selling rate)
Save

66
Define no. ranges for local documents
A) At the time of creation of cost center –Assign profit center
Dept A-Assign profit center
B) At the time of posting
Wages A/c 500000 Dept A
To Bank 500000
When there is no derivation rule –It updates dummy profit center
Transfer from dummy profit center
To Profit center steel
No co document will be generated once profit center document will be generated
(local)
Path :SPRO-Controlling-Profit center Accounting-Actual postings-Basic
settings: Actual –Define number ranges for local documents (Tr code is GB02)
Select actual document from direct posting with GB01 check box
From the menu select interval Maintain
Enter
Select interval button
Year :2008
From no :1
To :100000
Enter and save
Select back arrow
Select planned doc.with direct posting with GB01 check box
Form the menu select interval maintain
Enter
Select interval button

67
Year :2008
From no. :100001
To no. :200000
Enter and save
Creation of profit center:
Path :Accounting-Controlling-Profit center accounting-Master data-Profit
center-Individual processing-Create (Tr code is KE51)
Give the profit center :Steel
Select master data button
Analysis period to :01.04.2008 to 31.12.9999
Name :Steel
Long text :Profit center steel
Person responsible :Mr A
Profit center group :BIL
select activate button (Shift+F1)
One more profit center
profit center cement
select master data button
name :Cement
long text :Profit center cement
person responsible :Mr B
profit center group :BIL
select activate button
Create account groups
up to master data the path is same Account group create (Tr code is KDH1)
Give the account group name :PLITEMS ( Profit & Loss)
Enter
Description :P & L accounts for BIL
Select insert account button
From :300000

68
To :499999
Save
Select Back Arrow
Account groups :BSITEMS
Enter
Description :Balance sheet accounts for BIL
Select insert account button
Form A/c :100000
To A/c :299999
Save
Assign profit center in cost center
Path :Accounting-Controlling-Cost center accounting-Master data-Cost center-
Individual processing-Change (KS02)
Give the cost center :Dept A
Select master data button
Give the profit center :Steel
Cost center :Dept B
Enter
Profit center :Cement
Save
Creation of sales account as revenue element (FS00)
Give the GL account no. :300000 Sales A/c
Company code :BIL
Enter
Cost element category :Select 11 Revenues

69
Save
Maintain automatic account assignment of revenue elements
Path :SPRO-Controlling –Profit center accounting –Actual postings-Maintain
automatic account assignment of revenue elements (Tr code is OKB9)
Company code :BIL
Cost element :300000 Sales A/c
Account assignment details :Select 2 Business area is mandatory
Save
Select :BIL with cost element 300000
Double click on detail per business area /valuation area folder
Option 1 Option 2
HYD location
|
Steel cement Pharma HYD BGL MUM
300000 | | |
HYD Steel Steel Cement Pharma
300001 Sales cement 300000 Sales account
HYD Cement
300002 Sales pharma HYD Steel
HYD Pharma BGL Cement
Mum Pharma
Business area : BILH
Profit center : Steel
Business area : BILB
Profit center : Cement
Save
Choose addition balance sheet and p & L accounts
Applicable for second scenario: Application for second option

70
Same path Select choose accounts (Tr code is 3KEH)
select new entries button
Account from :100000
Account to :299999
Default profit center :Steel
Save
Select profit center determination button
Select crate step button
Step description :Profit center derivation though business area for balance sheet
items.
Select drop down button under name column
Select GSBER businesses area
Save
Select maintain rule values button
Select source field intervals on /off button
Account no.100000
To account no.299999
Business area :BILH
Profit center :Steel
Account no :100000
To account no. :299999
Business area :BILB
profit center :Cement
Save
END USER AREA
1) Planning profit center wise for p & L items
Path :Accounting –Controlling –Profit center accounting –Planning –cost
/Revenues-Change (Tr code is 7KE1)

71
Version select :0
From period :8
To period :8
Fiscal year :2008
Company code :BIL
Account group :PLITES
Select from based radio button
Per account no.300000 Sales account
Profit center reporting currency :600000 (Minus report currency)
For account no.400100 salaries A/c without any sign
Save
Planning profit center wise for balance sheet items (Only for second scenario)
Up to planning the path is same Balance sheet accounts change (Tr code is
7KE3)
Version :0
From period :8
To period :8
Fiscal year :2008
Company code :BIL
select next page or page down button
Profit center steel
Account group :BSITEMS
Select form based radio button
For account :100300 SBI rupee term loan
Profit center reposting currency 20000- with minus sign

72
For 200105 SBI current account profit centers reporting currency 200000 without any
sign
Save
Posting of cash sales (F-02)
Type :SA
Company code :BIL
Posting key :40
Account no. :200105 (SBI current account)
Enter
Amount :550000
Business area :BILH
Text :sales posting
Posting key :50
Account no. :300000 (Sales a/c)
Enter
Amount :*
Business area :BILH
Text :+
Form the menu select Document –Simulate and save
Posting of salaries (F-02)
Document date :Today’s date
Type :SA
Company code :BIL
Posting key :40
Account no. :400100 Salaries a/c
Enter

73
Cost center :Dept A
Posting key :50
Enter
Amount :*
Business area :BILH
Text :+
Document –simulate and save
To View variance report profit center wise for P & L items
Path :Accounting –Controlling –Profit center accounting-Information system-
Repost for profit center accounting-Interactive reporting –Profit center group:Plan
/actual /variance (Tr code is S_ALR_87013326)
From period :8 (Current /Running month)
To period :8
Fiscal year :2008
Plan version :0
Profit center values :steel
Profit center accounts groups :PLITEMS
To view variance report profit center wise for balance sheet items:
Up to interactive reporting the path is same Profit center group: Balance sheet
accounts plant / Actual /Variance (Tr code S_ALR_87013336)
From period :8 (Running month)
To period :8
Fiscal year :2008
Plan version :0
Profit center values :Steel
Balance sheet account group :BSITEMS

74
Execute
Transfer of values from one profit center to another profit center
One cost center works for no.of profit centers we an assign only one profit center is
cost center.
In dept A Profit center steel
From profit center steel transfer to cement
Manual transfer through cycles
No.FI document will be generated
No.CO document will be generated
Only profit center document will be generated.
Path :Accounting –Controlling-Profit center accounting-Actual postings-Profit
center document –Enter (Tr code is 9KE0)
Layout select 8A-001 document :Profit center /account
Company code :BIL
Select Enter screen button
Account no. :400100 Salaries
In profit center local currency 500000 –(with minus sign)
Profit center :Cement
Account no. :400100 Salaries
Amount :500000 (without minus sign)
Save

75
INTEGRATION
Organization structure :
FI: Business area
Company
|
Company code
MM:- Structure SD: Structure
Business area | Factory / Sales organization Company code level /
| Plants Branch/Port | Regional location
| | |
Storage locations Raw material / Finished goods Distribution-> Direct sales through
/Packing material Channel Agents
| |
Division Product groups/
products
Why we create port as a plant:
Keep the material on ship
HYD Chennai Customer
Factory Port
Export sale – Terms of delivery-FOB (Free on Board) ownership will be transferred once
we kept the martial on ship.
Business area will be assigned to plants, plants will be assigned to sales organization
business area will be assigned to sales organizations.
In SD module, combination of sales organization, distribution channel and division –One
sales area.
Sales Area 1 Sales Area 2
Hyd sales Org. Hyd Sales org
| |

76
Direct sales Through agents
| |
Steel Steel
Movement types: Similar to posting keys in FI
101 Material receipt against purchase order /production order
102/122 Reversal of 101
201 Issue to cost centers
202 Reversal of 201
261 Issue to orders
262 Reversal of 261
521 Production receipt without production orders.
522 Reversal of 521
561 Opening stocks taking
562 Reversal of 561
601 Delivery (sales)
602 Reversal of 601
Difference between 201 and 261
Cost centers Dept A Dept B Dept C
Issue material Production order 1
(Movement type 261)
Stores items to issue Production order 2
(Mov.type 201)
(cost center 201) Production order 3
Material issue is identifiable to production orders use movement type 261
Material issue is not identifiable to production orders use movement type 201
Transaction key /process key
a) BSX Inventory postings
b) WRX Goods receipt /Invoice receipt (GR/IR)
c) PRD Price difference /Production order differences
d) GBB Offsetting entry for inventory postings
(i) VBR consumption
(ii) VNG Scrapping
(iii) BSA Opening stocks
(iv) ZOF Production receipt without production order
(v) AUF Production receipt with production order
(vi) VAY Delivery where sales account is created as revenue
element (CO implemented)
(vii) VAX Delivery where sales account is not created as revenue
element (Co not implemented)

77
(viii) AUA production order differences
Eg: 400000 Raw material consumption
200121 Inventory raw material
For consumption
Raw material consumption Dr
To Inventory raw material
For GBB VBR Assign account no.400000
For BSX Assign account no.200121
Valuation class:
Valuation class determines the GL accounts to be posted automatically.
A) Raw materials Local
Imported
Inter unit purchases
Inter company purchases 4
Valuation class
B) Stores :Local 2 valuation class
C) Finished goods own manufacturing 1 valuation class
Valuation grouping code / valuation modifier /Valuation modification key:
Company codes BIL BCL BSL
Chart of accounts BIL
Plants HYD-BGL BGL-MUM HYD-MUM
Local raw materials RM1 RM2 RM3-RM1 RM2-RM3
Incase of purchases, 200121 –Inventory raw material local
When we follow same chart of accounts for numbers of company codes, Instead of
assigning accounts number of times, assign only one time by using valuation grouping
code.
Valuation Chat of accounts Company code Valuation
Areas Plants Grouping
HYD BIL BIL X
BGL BIL BIL X
BGL BIL BCL X
MUM BIL BCL X
HYD BIL BSL X
MUM BIL BSL X

78
For X in case of RM local purchases assign account number 200121, inventory Raw
material local.
This is similar to posting periods in FI
A) Define posting period variant X
B) Assign posting period variant to company codes X to BIL
X to BCL
X to BSL
c) Define posting periods for variant X
for X—1, 2008 –12,2008
Material types Price controls
Raw materials ROH V-Moving average price purchase price
Stores & spares ERSA V-Moving average price purchase price
Packing & material VERP V-Moving average price purchase price
Finishing goods FERT S-Standard price Raw materials +
Semi finished goods HALB Overheads
Purchased V-Moving average price Purchase price
Produced S-Standard price Raw material+Overheads
Trading goods HAWA V-Moving average price Purchase price
Services DIEN
Semi finished goods purchased
Dept A Dept B Dept C Dept D
15 days FG
Sales order –To be delivered with in 2 days
Purchase an item where with
In 2 days purchase an item
Where processing of A,B and
C is completed
D processing of D
Semi finished goods produced
Dept A Dept B Dept C Dept D
Issue RM 15 days time
Sales Dept –got an order for sale where the processing of A and B is
completed
Take production
After completion
Of B and sell
Trading goods: Purchase FG and sell FG without doing any processing.
Services: Plant is having operating capacity
No sales orders
Job work for others

79
We get job work changes –Material
Does not belong to us
- Material types are similar to account groups in FI
- There we create GL masters here we create material masters.
- GL master are created under account group where as material masters are
created under material type.
- Material master is created at plant level-when number of plants are using
the same material it will be extended(copied) to other plants.
- For materials we can open 2 periods at a time.
Oct Nov.
When we open Dec.-Automatically Oct will be closed.
Where we crate material master –We will have number of tabs (Views)
Basic data
Purchase view
Sales view
MRP view
Quality
Ware house management
Accounting
Costing
MM Flow
A) Material requisition By production Dept to Stores
B) Purchases requisition By stores to purchases
C) Call for enquiries, Get quotations and do price comparisons By purchase Dept.
D) Create purchase order Vendor number, Material
Quality, Rate, Plant, Company code
Delivery terms, payment terms,
Purchase organization
E) Release It is optional
It will work through work flow
If P.O value is less than Rs.10000 To be released by manager purchases
If P.O value is Rs.10000 and above To be released by GM(Purchases)
And less than 100000 if P.O value is
10000 and above To be released by Director
Once we save the purchase order, based on the value it goes to the inbox of the command
authorized person, till is releases we can’t take goods receipt.
F) Goods receipt –With reference to P.O
Inventory RM local DR 100
To GR/IR clearing RM local 100
Balance sheet current asset BSX
Balance sheet current liability WRX

80
(Qty in GR*Rate as per P.O)
G) Invoice verification-Against PO/GR
GR/IR clearing RM local DR 100 Balance sheet CL WRX
To party 100 Balance sheet CL From PO,
Party no. will be taken
i) Raw material consumption
RM Consumption Local DR 100 P & L Debit GBB VBR
To inventory RM local 100 BS C/A(Current Asset) BSX
J) Wages payment
Wages A/c DR 20 P & L Debit
To Bank 20 BS CA
K) Production Receipt At product cost
Inventory FG DR 120 BS C/A BSX
(FG =Finished goods)
To INC/DEC in stocks FG 120 P & L Credit GBB
ZOF – In case of on production order /CPP module not implement GBB
AUF –in case of production order (PP module implemented)
SD steps
L) Delivery –At product cost
INC /DEC in stocks FG DR 120 P & L Credit
GBB VAX –If sales account is not created as revenue element (Co not implemented
/GBB VAY –If sales account is created as revenue element (Co Implemented)
To Inventory FG 120 BS C/A
M) Sales billing
Customer A/c DR 150 BS C/A From sales order, customer number will be
taken
To Sales 150 P & L credit ERL
LCL=Local
Inventory FG=Raw material consumption local +wages
GR=Goods receipt
INC/DEC STK FG=Increase /Decrease stock finished goods
P & L account
H) RM can local 100 L)Sales 150
Wages 20 J)INC/DEC STKFG 120
Net profit 30 K)INC DEC STK FG -120 0
------- -----
150 150
=== ===

81
Balance Sheet
Surplus in P & L Account 30 F) INV RM LCL 100
F) GR/IR CLG RM LCL 100 H) INV RM LCL -100
E) GR/IR CLRG RM LCL -100 0 ---------
0
a) Sundry creditors RM 100 I) Bank -20
j) INV FG 120
K)INV FG -120 0
L)Sundry debtors 150
---- --------
130 130
=== ===
Integration rules
A) In material master we specify valuation class
B) For valuation class we assign GL accounts based on the nature of transaction
C) At the time of material receipt/Issue stores person enters movement type, material
number and quantity. Our accounts will be up dated automatically based on
accounts assignment to valuation class which is specified in material master
Eg: Material no. Valuation Inventory postings GR/IR Consumption
BSX Clearing (GBB VBR)
(WRX)
RM1 (local) 3000 RM local 200121-INV-RM 100520-GR/IR 40000-RM
Local CLRG RM LOCAL Consumption-
IMP
Local Raw Material
1. Purchase order Material –RM1
Vendor -1234
Qty-100 Kgs
Rate 5 Rs Save P.O.No.1
2. Goods receipt with reference to P.O-P.O No.1
Movement Type:101 Debit BSX 200121
Credit WRX
Material RM1
Qty 60 kgs
Save
Material Doc no.200001
200121 –Inventory RM local DR 300
100520 GR/IR CLR RM Local 300
(Qty IN GR *Rate as per P.O)
60*5

82
Raw material consumption
Movement type 201 Debit GBB VBR Debit A/c No. 400000
Credit BSX 200121
Material RM1 3000
Qty 10 Kgs
400000 RM Consumption LCL DR 50
200121 Inventory RM Local 50
(Qty issued * Moving average rate)
Imported raw material
1. Purchase order Material -RM2
Vendor -4567
Qty-1Kg
Rate -100 PO No.2
2. Goods receipt- with reference to PO-PO No.2
Movement type:101 Debit BSX 200122
Credit WRX 100521
Martial RM2 3001
Qty 1 Kg
Save Material Doc No.200003
200122- Inventory RM IMP DR 100
100521 GR/IR CLRG RM IMP 100
(Qty IN GR* Bate as per P.O)
1*100
Raw material returns
Material doc no.200003
Movement Type 102 Debit WRX 100521
Credit BSX 100122
Material RM2 3001
Qty 1 Kg
Save Material doc no.200004
100521 GR/IR CLR RM IMP DR 100
200122 Inventory RM IMP 100
Why SAP does not support purchase accounting why it supports inventory
accounting:
RM –Local raw material 1 2 3
Not included in purchase Bill received Less stock reported
Provision statement by stores
RM consumption=Qty Value
Opening stock 0 0 0 0

83
Add purchase 0 516.50 516.50
_____________________________
516.50 516.50
Less :Closing stock 300 300 200
------------------------------------------
Raw material consumption X X X
========================
Wrong wrong wrong
1. Purchase order material no. RM1
Vendor 1234
Qty 100 Kgs
Rate 5 Rs
Excise 10%
CST 2%
Other change 1%
Material receipt:
We get excise invoice to claim cenvat –Final invoice many come or may not come.
Only excise invoice received
Basic price 500
Excise 50
Stores person updates his records with the above data.
Issue: Not included in purchase provision statement:
Account Dep gets a statement from stores in the month end material received bills not
received to make purchase provision.
Stores person –By mistake he has not included the above item in the purchase provision
statement.
Account Dept.gets closing stock statement from stores-in the statement he is showing 60
kgs stock at 5Rs.300
Issue2 –Closing stock valuation wrong
We have received invoice after words in invoice
wrong
Basic 500 500
Excise 50 50
CST2% 11 11
Other 1% 5.5 5.5
------- -------- ---
Bill amount 566.50 516.50 50
Purchase a/c cenvat receivable
In the month end stores person sends closing stock statement
60 kgs at Rs.5
Should be value 516.5/100*60=309

84
*Issue less stock reported by stores
If this month production is more, profitability will be more.
If this month production is less, profitability will be less.
Physical stock available -60 Kgs
Reporting to accounts only 40 kgs
40*5=200
Inventory accounting
1. Purchase order Material no.RM1
Vendor 1234
Qty 100
Rate 5
Tax code A1 (10% Excise +2% CST) other charges 1%
PO no.1
2. Goods receipt with reference to PO no.1
Movement type 101
Material RM1
Qty 100
Save
Entry will be passed automatically
Inventory RM local DR 516.50
To GR/IR CLR RM Local 516.50 Qty in
GR*Rate as per PO
Store records : Material RM1
Qty :Value
Receipt :100 Kgs 516.50
Account records 200121 Inventory RM local
516.50 DR
3. Raw material consumption
Movement type 201
Material RM1
Qty 40 Kgs
Save
Accounting entry will be generated automatically RM consumption local DR
206.5 (516.5) 100*40
To Inventory RM local 206.6
Qty issued moving .AVG price
Stores records: Material RM1
Qty Value
Receipt 100 Kgs 516.50
Issue 40 Kgs 206.6

85
------ ------
60 Kgs 309.9
Accounts records 200121 Inventory RM local
516.50 DR 206.60 DR
CL stock value 309.9
Price differences are two types
1)Batch method 2)Moving average method
|
-------------------------------------------------------
| | |
Stock fully available Stock partly available Stock no available
1st
method –Batch method:
RM1 PO PR 10 RS BILL for 12Rs
1.Material Receipt
Batch Qty Rate Amount Inv RM local DR 1000 BSX
1 100 10 1000 To GR/IR CLR RM LCL/100 WRX
2 50 40 2000 2. Raw Material consumption
----- ----- RM consumption local DR 100 GBB VBR
150 3000 To INV RM local 100 BSX
10 10 100
--- ----
140 2900 3. Invoice verification
180 GR/IR CLRG RM LCR DR 100 WRX
----- ----- INV RM LOCAL DR 180 BSX 90*2
140 3080 Price diff RM LCL 20 PRD 100*2
To Vendor 1200 form PO vendor no. is
taken
Break up
1 90 12 1080
2 50 40 2000
Preparation in P & L account :
Raw material consumption :
Raw material consumption +/ price difference RM
Eg: RMC 100
PD RM 20
----
120
===
For the truncation key PRD –We can assign raw material consumption account or price
difference RM A/c

86
Moving average method: stock fully available
RM1 PO Price :10 Final Bill for Rs.12
Qty rate amount 1. Goods receipt
Bill qty 100 10 1000 Inv.RM local DR 1000 BSX
50 40 2000 To GR/IR CLRG RM LCL 1000
---- ------ 2. Raw material consumption
150 3000 RM consumption local DR 400 GBB VBR
20 20 400 To INV RM local 400 BSX
---- -----
Average bill 130 2600 3.Invoice verification
GR/IR CLRG RM LCL DR 1000 WRX
200 GR/IR CLRG RM LCL DR 1000 WRX
---- -----
130 2800 INV RM Local DR 200 BSX 100*2
To Vendor 1200 form PO Vendor no.is
taken
Consumption rate:
Value / Qty 3000/150=20
Next consumption rate
Value / Qty 2800/130=21.54
3rd
method moving average method: Stocks partly available
RM1 PO Price 10Rs Bill for 12Rs
1.Material receipt
Qty Rate Amount 1. Goods receipt
Bill qty 100 10 1000 INV RM local DR 1000 BSX
50 40 2000 To GR/IR CLRG RM 1000 WRX
--- -----
150 3000
130 20 2600 2. Raw material consumption
----- ------ RM comp local DR 2600 GBB VBR

87
AVBL QTY 20 400
40 TO inv RM local 2600 BSX
---- ----
20 440
3.Invoice verification
GR/IR CLR RM LCL DR 1000 WRX
INV RM Local Dr 40 BSX 20 *2
Price diff RM DR 160 PDR
To Vendor 1200 from PO
vendor no.is taken
Consumption rate
Value / Qty 30000/150=20
Next consumption rate:
Value qty 440/20=22.00
Incase of batch method –It has checked batch wise for the material.
In case of moving average method –if has checked material wise.
4th
Method-moving average method: Stocks not available safety socks
RM1 PO Price 10 Rs Bill for Rs12
1. Material receipt
Qty Rate Amount Inv RM local DR 1000 BSX
Bill Qty 100 10 1000 To GR/IR CLRG RM LCL 1000WRX
50 40 2000 2. Raw material consumption
---- ---- ------ RM Consume local DR 3000 GBB VBR
150 3000
150 20 3000 To INV RM Local
---- ----- 3. Invoice verification
AVBL Qty 0 0 GR/IR CLRG RM LCL DR 1000 WRX
Price Diff RM DR 200
To Vendor 1200 form PO vendor no.is taken
Sales and Distribution Flow:
1. Inquiry and quotation:
2. Sales order : Product, Plant, Sales organization, customer no., quantity, rate
delivery
terms, payment terms.
3. Delivery :With reference to sales order
A) Delivery without post goods issue (Delivery without PGI) ownership is
not transferred.
Eg. Export sales –Terms of delivery –FOB (Free on board)
Hyderabad Factory Chennai Port Customer
Delivery without PGI Delivery with PGI

88
No FI document only FI document material
material document document
FI document :At product cost
Increase /Decrease in stocks FG DR GBB VAY-If sales account is created as
revenue element (Co implemented)1
GBB VAX if sales account is not created as revenue element (Co not
implemented)
To inventory FG BSX
B) Delivery with Post Goods Issue (Delivery with PGI)
Eg. Local sales terms of delivery –Ex works
Hyderabad factory Customer
Delivery with PGI
Sales Billing: With reference to delivery
Customer account DR From sales order
To Sales :ERL
SD-Pricing procedure
Eg: 1 2 3 4
From R egion Andhra Andhra Andhra Andhra
To Region Andhra Tamilnadu Andhra Tamilnadu
Customer Taxable Taxable Non-taxable Non-taxable
Material Taxable Taxable Non-taxable Non-taxable
Basic price
Excise % on basic
VAT % on Basic+Excise CST % on basic+ Excise
From H sales
Condition type: KOFI (Account assignment-FI)
KOFK (Account Assignment –CO)
Assignment of accounts
1 2 3 4 5 6 7 8
Application
area
Conditi
on type
Chat
of
Sales
originatio
Account
assignment
Account
assignment
Accou
nt keys

89
accoun
ts
n group for
customers
group for
materials
V-Sales &
Distribution
KOFI BIL HYD 01 03 ERL 300001 –
Sales Local
own goods
V-Sales &
Distribution
KOFI BIL HYD 02 03 ERL 300002-
Sales
exports own
goods
V-Sales &
Distribution
KOFI BIL HYD 01 01 ERF 300003
Sales local
trading
goods
V-Sales &
Distribution
KOFI BIL HYD 01 03 ERL
Sales
revenu
e
400350 –
Freight
Local own
goods
01-
Domestic
revenues
01 Traded
goods
ERF
Freight
Reven
ues
02-Foreign
revenues
02 Services ERB-
Rebate
s
/Tradi
ng
Discou
nts
03-
Afflicated
company
revenues
03
Finished
goods
ERS
Sales
Deduct
ions
Note :ERS :Sales commission
Bank 5000 From customer 5000
Reimbursement of expenses
MM CUSTOMIZATION
MM consultant job
1. Define Plants

90
Path: SPRO-Enterprise structure- Definition –Logistic general-Define copy,
delete check plant.
Double click on define plant
Plant :BILP
Name :BIL HYD Factory plant
Factory calendar :Select B2 or 01 (B2=BIL HYD Factory Calendar)
Save (01=Standard calendar)
Give the name :BIL Hyderabad factory plant
Country :IN
Enter
Short description :MM customization for BIL
Press enter
Enter once again to save in the request
Define division:
Path :Up to logistic –General the path is same-Define copy, Delete, check
division.
Double click on define division
Division :BS (It is a text filed)
Name :Steel Division
Save
Maintain storage location
Path :SPRO-Enterprise structure –Definition- materials management –
Maintain storage location (OX09)
Give the plant :BILP
Enter

91
Give the storage location :HYD
Description :Hyderabad storage location
Save
Maintain purchasing organization
Same path
Purchase organization :BIR
Description :BIL Purchase organization
Save
Assign plant to company code:
Path : SPRO-Enterprise structure –Assignment- logistics General –Assign
plant to company code ( Tr code is OX18)
Company code :BIL
Plant :BILP
Save
Assign business area to plant/valuation area and division
Path :Same path -Select plant /valuation area –Division button
Plant :BILP
Division :BS
Business area :BILH
Save

92
Assign purchasing organization to company code
Path :Up to assignment the path is same –Materials management –Assign
purchasing organization to company code
Select position button :Give the purchase org:BILR
Enter
For BILR for assign company code BIL
Save
Assign purchasing organization to plant:
Same path
Purchasing org :BILR
Plant :BILP
Save
Create purchasing groups
Path :SPRO-Materials management –Purchasing –Create purchasing groups.
Purchasing group :BIL
Description :BIL RM purchasing group
Save
Press entr to save in your request
Define material groups:( OMSF)
Path :SPRO-Logistic general –Material master-Settings for key fields –Define
Material groups.
Material group :BILC
Material groups description :Chemicals

93
Maintain company code for material management:
Path :SPRO-Logistic General –Material master-Basic settings-Maintain
company code for materials management
Give the comp code :BIL
Enter
Year :2008
Period :7 (October)
Note : This period enter carefully, if you once enter not modified
Select ABP check box (ABP stands for Allow Back Period Posting)
Note: September entries allowed
Save
Define attributes of material types:
Path:up to the material master the path is same – Basic settings –Material type-
Define attributes of material types.
Select material type :ROH (Raw materials)
Enter
Select ROH
Double click on quantity / Value updating folder
Valuation area :BILP ( Nothing but plant)
Enter
For BILP select quantity updating, value update check box
Save

94
Select back arrow
Select material FERT for finished product
Double click quantity / value updating folder
Valuation area :BILP
Enter
For BILP select quantity updating check box value updating check box
Save
Set tolerance limits for price variance for purchase order
Path: SPRO-Material management –Purchasing –Purchase order –set
tolerance limits for price variance
Select TIKY :PE & SE for company code 1000
Enter the company code to BIL
For tolerance key :PE
Enter
Change the company code to :BIL
For tolerance key :SE
Enter and save
Plant parameters:
Path :SPRO-Materials management –Inventories management –Physical
inventory –Plant parameters
Select plant :1000
Change the plant to BILP
Enter and save

95
Set tolerance limits for goods receipt
Path :Up to inventory management and physical inventory the path is same -
Goods receipt-Set tolerance limits
Select tolerance key B1,B2,VP for company code 1000
Change the company code to BIL for B1
Enter
Change the company code BIL for B2
Enter
Change the company code to BIL for VP
Enter and save
Maintain default values for tax codes
Path: SPRO- Materials management –Logistics invoice verification-Incoming
invoice maintain default values for tax codes
Company code :BIL
Save
Set tolerance units for invoice verification
Path:Up to logistics invoice verification the path is same – Invoice block-Set
tolerance limits
select tolerance key BD, ST for company code 1000
select copy as button
change the company code to BIL for BD
enter
change the company code to BIL for ST
save
Define automatic status change

96
Path :Up to the logistic invoice verification the path is same – Invoice
verification in back ground –Define automatic status change
Company code :BIL
Group together valuation areas:
Path :SPRO-Material management –Valuation and account assignment-
Account determination-Account determination without wizard-Group
togather valuation areas.
Valuation :BILP
Enter
Give the valuation grouping code :X
Save
Define valuation classes:
Path :Same path – Select valuation class button
Select valuation class 3000 Raw materials local
Select valuation class 7920 Finished products
Change valuation class 3000 to BIL1
Change the description to Raw materials local
Change valuation class 7920 to BIL2 – Finished product
Enter and save

97
FI consultants job:
1. Creation of GL masters FS00
A) Inventory RM local Current assets loans & advances
B) Inventory finished goods -do-
C) GR/IR clearing RM local Current liabilities & Provisions
D) RM consumption local RM Consumption
E) INC/DEC in stocks FG Increase /Dec in stocks
Give the GL account no. 200121
Company code BIL
Give the GL account no.200120 Inventory RM
Company code :BIL
Enter
Change the short text to Inventory RM local
Change the GL a/c long text also inventory RM local
Tax category :select * (All tax allowed)
Select posting without tax allowed check box
Select create/Bank/Interest tab
Field status group change to G006 Material accounts
Save
Note :Before post select automatically only check box 200121
GL account no. :200122
Company code :BIL
Give the GL a/c no.200121
Company code :BIL
Enter
Select type/description tab
Change short text and GL a/c long text to inventory FG
Save

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