The document discusses SAP's use of internal orders to temporarily accumulate costs for specific projects or tasks over a short period of time. It provides examples of using an internal order to track gift costs for an annual staff dinner until winners are determined via a lucky draw. The key points made are: 1) Internal orders allow costs to be accumulated for a specific project/task over a short time period, unlike cost centers which are for longer-term fixed reporting. 2) An example is provided of using an internal order to track gift costs for a staff lucky draw, which will later be allocated to individual cost centers once winners are known. 3) Steps are outlined for creating an internal order in SAP,

1. SAP FI/CO -
Why SAP uses
Internal
Orders?

2. Internal Order Accounting
1. Why an Internal Order is required?
2. Creation of Internal Order
3. Operational Expenditure Postings
4. Settlement of Internal Orders to
Cost Centers
5. Internal Order Reporting

3. Internal Order Vs. Cost Center
An Internal Order is used to
accumulate cost for a specific project
or task for a specific time period. An
internal order is therefore used for a
short period with a specific deadline.
Whereas
A Cost Center is for fixed reporting for
a long time span as part of your
company structure (cost center usually
= department or work center).

4. Internal Order Concepts
Buy Gifts for Staffs’ Lucky Draw
Annual Dinner Event
John
Gift 1
Mary
Gift 3
Mike
Gift 2
Post the gifts’ cost to an
Internal Order temporarily i.e.
for a short period of time until
the Annual Dinner Event where
the staffs’ names will be known
from the lucky draw.

5. Why an Internal Order is required ?
Buy Gifts for Staffs’ Lucky Draw
Annual Dinner Event
John
Gift 1
Mary
Gift 3
Mike
Gift 2
Once the winning staff’s names are known, it is easier to allocate the gift’s cost to the respective staff’s
Cost Center.
Post the gifts’ cost to an
Internal Order temporarily i.e.
for a short period of time until
the Annual Dinner Event where
the staff’s names will be known
from the lucky draw.

6. Create an Internal Order
All Internal Orders are to
be classified as Order
Type. An Order Type is
the categorization of an
Internal Order

7. Create an Internal Order
Double click on Define
Order Types to branch
out to create Internal
Order.

8. Create an Internal Order
After executing Define
Order Type , You can
double-click on any
Internal Order to check
its details.

9. Create an Internal Order
Since we are creating
Internal Order, we need
to select Order Category
to be Internal Order
Controlling.

10. Create an Internal Order
Now, we have created a
new Order Type ZSUN of
Order Category - Internal
Order (Controlling).

11. Assign Number Range
The system does not
allow the interval for
number range to overlap.
So it proposes the
interval itself .

12. Assign Number Range
Assign number range
from here to Not
Assigned Internal
Order ZSUN and save
it.

13. Create an Internal Order
The most important
parameter is Settlement
Profile which determines to
which feasible object the cost
contained in this Internal
Order can be settled to.

14. Maintain Settlement Profile
While maintaining Settlement
Profile, To be Settled in Full
option means an Internal Order
cannot be deleted or closed if the
balance in that Internal Order is
greater than zero. Can be
Settled means an Internal Order
can be closed/deleted even if the
balance is greater than zero.

15. Create an Internal Order
The Order Type can
be used for more
than one Controlling
Area.It is above the
Controlling Area.

16. Create an Internal Order
The Object Class in our
example is Overhead cost
which is a gift. Give the
description and save it. Enter
the values for Company
Code, Business Area, User
Responsible and Description.

17. Create an Internal Order
System Status is very
important because
until we don’t release
the Internal Order, we
cannot put values into
it.

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