Controlling

FI Basic Settings

Step 1: Define Company (OX15)

And save

Step 2: Define Company Code (OX02)

And save
Following screen will appear. Update the required information

Enter and save

Step 3: Assign Company Code to Company (OX16)

And save

Step 4: Define Business Area (OX03)

And save

Step 5: Define Segments

Path: SPRO  Enterprise Structure  Definition  Financial Accounting  Define Segment

And save
Step 6: Define Fiscal Year Variant (OB29)

For the company code TSL we are using V3 Fiscal year variant

Step 7: Assign Fiscal Year variant to company code (OB37)

And save

Step 8: Define Posting Period Variant (OBBO)

And save

Step 9: Define Open and Close Posting Period Variants (OB52)

And save

Step 10: Assign Posting Period Variant to Company Code (OBBP)

And save
Step 11: Define Field Status Variant (OBC4)

And save

Step 12: Assign Field Status Variant to Company Code (OBC5)

And save

Step 13: Define Chart of Accounts (OB13)

And save
Step 14: Assign Chart of Accounts to Company Code (OB62)

And save

Step 15: Define Account Groups (OBD4)

And save

Step 16: Define Retained Earnings (OB53)

And save
Step 17: Define Document Types (OBA7)

And save

Step 18: Define Tolerance Range for GL Accounts (OBA0)

And save

Step 19: Define Tolerance Range for Customer or Vendors (OBA3)

Step 20: Define Tolerance Range for Users (OBA4)

And save

Step 21: Create GL Accounts (FS00)

Step 22: Post GL Invoice (F-02)

 CONTROLLING

Organizational Structure:

Operating Concern

Controlling Area

Company Code

Profit center -------Cost center 1 Cost center 2 ------Profit center

Profit Centers are at controlling area level but Cost centers are at company code level

Operating Concern: It is the highest node of organizational unit in SAP. It is required in CO-PA
module.

Controlling Area: It is the highest level of organizational unit in Controlling. At this stage we can track
overhead management, product costing, profit controlling.

Company code: It is one of the organizational units in FI. It is the place where we prepare financial
statements.

Scenarios: In controlling area we have two scenarios:

(i) Controlling area at company code level – Each company code have different controlling area
(ii) Controlling area at country level – No. of company codes having one controlling area

Prerequisites for 1st scenario: Chart of Accounts and fiscal year variant should be same for all the
company codes
Cost Element: It carries costs from FI module to CO Module. There are two types of cost elements:
Primary cost element and Secondary cost element.

Cost element codification finalizes at business blue print stage only. FI Consultant finalizes primary
cost element codification and CO Consultant finalizes secondary cost elements

Primary Cost Elements:

01 primary cost element category values will not flow to CO-PA. Only 11 and 12 cost elements
categories flow to CO – PA.

Secondary Cost Elements:

Business Transactions: It is similar to document types in FI. In CO number ranges are year
independent.

Version: All CO values stored under versions

Version 0: The actual and planned values stored under zero versions. In addition to zero versions we
can maintain few more plan versions also but it is not possible to maintain actual values in other
than zero versions.
Basic Configuration Settings for Controlling:

Step 1: Maintain Controlling area (OKKP)

Path: SPRO  Controlling  General Controlling  Organization  Maintain Controlling

Area

CoCd-> CO Area:
Controlling area same as company code: If a company code uses one controlling area
Cross company code cost accounting: If multiple company codes use one controlling area

Currency type:
Group currency (30): For material Ledger, we have to select this currency
Controlling currency (20): It is nothing but our company code currency

Curr/Val. Profile:
We use this field, if we have transfer price concept either in profit center accounting (or) in material
ledger.
 Double click on assignment of company code

Double click on activate components/control indicators button

Profitability Analysis: This field is automatically activated here, if we activate the same in CO-PA

Profit Center Accounting: If we select this check box, then the system treats it as a classic profit
center accounting. For ECC 6.0 Version, no need to select this check box

Projects: When we implement PS module, we select this check box

W. Commit. Mgt: When we implement FSCM module, we select this check box

Variance and CoCd validation: If more than one company code using same controlling area then we
haves to select the check boxes of variance and CoCd validation
Step 2: Maintain Number Ranges (KANK)

Path: Same Path

Select maintain group button

Menu  Group  Insert and give the description & number range interval

Double click on all the business transactions

And then select check box of co doc no range interval for TSL

And then click on Assign element icon and save

Step 3: Maintain Versions

Path: Same Path

Enter

Select on FY 2013 and click on details button

Planning Tab:

Version locked: If we select this check box, we cannot post to any transaction for that particular FY

Integrated Planning with cost centers/bus. Process: In cost center master data (KS01), we specify
profit center. If we select this check box, whatever planning we do for cost center – the same will
update in profit center also and vice versa. But for ECC 6.0 Version, no need to select this check box
Price Calculation Tab:

And save

Plan Price: Plan price controls system calculated price:

System calculated price is the combination of both input planning (KP06) and output planning (KP26)

In KP06, we will make planning by the combination of cost center and cost element
In KP26, we will make planning by the combination of cost center and activity type.

Periodic price formula: Current period input planning / current period output planning
Average price formula: Total periods of input planning / total periods of output planning
 Cost Element Accounting

Creation of Primary Cost Element:

We can create cost elements in 3 ways:

A) In FI area – FS00
B) In CO area – KA01
C) Automatically we can create cost elements

In FI Area – FS00

Select edit cost element button

Enter
And save

Note: We are not supposed to give cost centers or orders under default assignment tab. Please find
the below screenshot for further reference
In CO area – KA01:

Enter

And save
Automatically we can create cost elements:

Creation of Automatic Cost Elements (OKB2)

Path: SPRO  Controlling  Cost Element Accounting  Master Data Cost Elements 
Automatic creation of primary and secondary cost elements  Make Default Settings

And save

Create Batch Input Session (OKB3)

Execute

Execute Batch input session in same path

Note: In the above steps, we gave the primary cost element categories for revenues and expenses

Once the execution is completed, these primary cost element categories will update in available GL
Accounts.

If we select “Automatic cost element (2 nd option)” in COA (OB13), then for all the revenues and
expenses GL accounts which we are going to create in future also will be updated with these primary
cost element categories only.

To View the Cost Elements (KA23)

To create cost element group (KAH1)

Creation of Secondary Cost Elements (KA06):

Cost Element Name Category

931000 Technical 31
931001 WIP raw material 31
931002 WIP activity cost 31
931003 WIP indirect OH 31
941000 Material OH 41
941001 Activity OH 41
942000 Assessment 42
943000 Labour 43
943001 Machine 43
943002 Power 43
921000 Internal Settlement 21

Creation of secondary cost element group (KAH1)

To view the cost elements (KA23)

 Cost Center Accounting

We can create cost center in two ways: either in OKEON or KS01

1st Method: Define Standard Hierarchy (OKEON)

Give group name as Tata Steel Limited

Keep the cursor on TSL and right click and select Create cost center

And save
2nd Method: Creation of Cost center (KS01)

Enter

Save

To view the cost center (KS03)

 Activity Types

Creation of Activity Types (KL01)

Path: SPRO  Controlling  Cost center accounting  Master Data  Activity Types 
Create Activity Types

Note: To create activity types 43 cost element is required.

Enter

Save

In the same way, create activity types for Machine and Power also.
All the fields are remains same except below fields.

Machine: Activity unit – HR and Allocation Cost element – 943001

Power: Activity unit – KWH and Allocation cost element – 943002
 Splitting Structure

Step 1: Maintain Splitting Structure (OKES)

Select new entries button

Select 01 – splitting structure and double click on splitting rules button and select new entries button

Select rule -01 splitting rule and double click on assignment folder

And enter
Select new entries button and give the below details

And save

Select Assignment 1 – Labour Cost Split and double click on selection for assignment folder

Select new entries button

Enter cost element - 400000 (salaries) and activity type – Labour and save

Assignment 2:

Save

Assignment 3:

Save
Step 2: Assign Splitting Structure to Cost Center (OKEW)

Select change button

Select the check boxes of Production 1 and Production 2

And keep the cursor on splitting structure and assign

 Activity Independent Planning (With splitting structure)

1st case: Cost Element Assigned to Activity Type

Step 1: Maintain Input Planning (KP06)

Select overview button

And save
Step 2: Maintain Output Planning (KP26)

Select overview button

Save
Step 3: Run Plan Activity Price Calculation (KSS4)

Select test run check box and execute

Select back arrow

Remove test run check box and execute

Step 4: Create Production Cost Center Group (KSH1)

Enter

And save

Step 5: Price Calculation (KSPI)

Select settings button

Select not optimised check box and save

Select back arrow and remove test run check box and execute

To view the system calculated price (KP27):

2nd Case: Unassigned Cost Elements

Step 1: Maintain Input Planning (KP06)

Select overview button

And save
Step 2: Maintain Output Planning (KP26)

Select overview button

And save
Step 3: Run Plan Activity Price Calculation (KSS4)

Execute

Here, we can see clearly that planned rent amount (1500) distributed to all the three activity types
equally.

Select back arrow and remove test run check box and execute
 Step 4: Execute Price Calculation (KSPI)

Execute

Back arrow and remove test run and execute

To view the document (KP27):

3rd Case: Number of Activity types to Single Cost Element

Step 1: Creation of Secondary Cost Element (KA06)

And enter

Save
Step 2: Create Activity type (KL01)

Path: SPRO  Controlling  Cost center accounting  Master Data  Activity Types 
Create Activity Types

Enter

Save
Step 3: Create Production Cost Center (KS01)

Enter

Save
Step 4: Creation of cleaning GL Master (FS00)

Make sure to give cost element as “1” and save

Step 5: Define Splitting Structure (OKES)

Select 1 and double click on assignments folder

Select 1 and double click on selection for assignment folder

Remove activity type “Labour “and then create activity type group by using KLH1 (or) through the
path: MenuExtrasCreate Group.
Creation of activity type group:

Keep the cursor on Group (activity type) and give the description as “Lab_clean AT”

Select Menu ExtrasCreate Group

Select insert activity type

Assign labour and clean activity types

And save

Select back arrow and save

Step 6: Assign Splitting Structure to Production cc 3 (OKEW)

Select edit button

Select the check box of production 3 and keep the cursor on splitting structure for TSL and assign

Step 7: Assign Production 3 Cost Center to Production Cost Center Group (KSH2)

Step 8: Create Cost Element Group (KAH1)

 Enter

Select assign cost element button

Assign accounts and save

Step 8: Maintain Input Planning (KP06)

Select overview button

Save

Step 9: Maintain Output Planning (KP26)

Select overview button

And save

Step 10: Run Plan Activity Price Calculation (KSS4)

Execute

Remove test run and execute

Step 11: Run

 Allocation Methods

There are four types of allocation methods:

A) Distribution
B) Assessment
C) Periodic posting
D) Indirect Activity Allocation

Distribution

Scenario 1: Sender rule – posted amount and Receiver rule – Fixed percentage

Step 1: Creation of sender service cost centers (KS01)

Canteen service cost center:

 Enter

Save

Admn service cost center:

 Enter

Save

Step 2: Creation of Receiver Production Cost Center (KS01)

Production 4 cost center

Enter

Save

Production 5 cost center:

Save

Step 2: Define Distribution Cycle (KSV1)

 Enter

Select Attach segment button

Segment header tab:

Senders/receivers tab:

Sender values tab:

Receiver tracing factor:

Save

Step 3: Posting an FI invoice (FB50)

Invoice posting to canteen cost center

Invoice posting to Admn cc

Save

Step 4: Execute Actual Distribution Cycle (KSV5)

Execute

Select sender button

Select back arrow and select receiver button

Select back arrow two times and remove test run and execute.

Note: If we want to test remaining scenarios but we execute KSV5 without test run check box. Then
we need to reverse the run in KSV5 from menu path.

After that if we want to test remaining scenarios, go to KSV2 and select first segment button and
make necessary changes

Scenario 2: Allocation amount excess than actuals (receiver rule – fixed amount)
 Sender rule – posted amount and receiver rule – fixed amount

Step 1: Change Distribution Cycle (KSV2)

Enter

Select first segment button

Segment header:

Change receiver rule to “fixed amounts”

Senders/receivers tab:
Note: Don’t touch it

Receiver tracing factor:

Note: Actually posted values to salaries and rent under canteen cost center is 10000 & 5000
respectively in scenario 1 (Step 3)
Actually posted values to salaries and rent under admn cost center is 20000 & 15000 respectively.
But here we are allocating more than actuals. Let’s see the result in next step

Step 2: Execute Actual Distribution Cycle (KSV5)

 Execute

Select sender button

Select receiver button

Scenario 3: Sender rule – posted amounts and Receiver rule – fixed portions

Enter

Select first segment button

Segment header button:

Sender/receivers tab:

All the fields in this tab remain same

Receiver Tracing Factor:

Save

Step 2: Execute Actual Distribution Cycle (KSV5)

Execute
Sender button

Receiver button
Scenario 4: Sender rule – fixed amount and receiver rule – fixed portion

Step 1: Change actual distribution cycle (KSV2)

Enter

Select first segment button

Sender/receivers tab:

Note: These fields remain same

Sender value tab:

Receiver tracing factor:

Save
Step 2: Execute actual distribution cycle (KSV5)

Execute

Select sender button

Receiver button
Scenario 5: Sender –fixed rates and receiver rule – fixed portion

Step 1: Change Actual Distribution cycle (KSV2)

Enter

Select first segment button

Sender value tab:

Receiver tracing factor tab:

Save

Step 2: Execute Actual Distribution Cycle (KSV5)

 Enter

Sender button

Receiver button

Scenario 6: Statistical Key Figure

Step 1: Creation of statistical key figure (KK01)

Enter

And save

Step 2: Maintain Employee Number (KB31N)

Save

Step 3: Change the actual distribution cycle (KSV2)

 Enter

Select first segment button

Receiver tracing factor:

Save

Step 2: Execute Actual Distribution Cycle (KSV5)

Execute

Select sender button

Select receiver button

Assessment
Scenario 1: Assessment Cost Element

Step 1: Creation of service cost centers (KS01)

Enter

Save

Service cost center:

 Enter

Save

Step 2: Creation of Production Cost centers (KS01)

 Enter

Save

Assessment 2 production cost center:

 Enter

Save

Step 3: Creation of Assessment Cycle (KSU1)

 Enter

Select attach segment button

Segment header:

Senders/receivers tab:
Sender value tab:

Receiver tracing factor:

Save

Step 2: Posting of an invoices (FB50)

And save

Save

Step 3: Execute Assessment Cycle (KSU5)

 Execute

Sender button

Receiver button

Scenario 2: Allocation Structure

Step 1: Create Secondary Cost Element (KA06)

Enter

Save

Step 2: Create Allocation Structure (KSES)

 Select new entries

Save

Select 11 and double click on assignment folder

Select new entries

Select 01 – salaries and double click on source folder

Give 400000 – salaries account and save. Double click on assessment cost element folder

Select new entries button

And save and select back arrow

Select 02 –rent and double click on source folder

Give the rent account number and save. Double click on assessment cost element folder

Give secondary cost element number and save

Step 3: Change of assessment cycle (KSU2)

 Enter

Select first segment button

Remove assessment cost element number and give allocation structure and save

Step 4: Execute cycle (KSU5)

 Execute

Sender button

Receiver button

FI-MM Integration
Define Valuation Area at Plant/Company Code Level (OX14)

Here, valuation area is defined at plant level

Step 1: Define Plant

Path: SPRO  Enterprise Structure  Definition  Logistics General  Define Copy, Check and Edit
Plant

Select new entries

And save

STEP2: Define Division

Path: Same Path

Select new entries

And save

STEP3: Maintain storage location

Path: SPRO-Enterprise structure –Definition- materials management –Maintain storage location
(OX09)

Select new entries

And save

Step 4: Maintain Purchase Organisation

Path: same Path

Select new entries

And save

Step 5: Assign plant to company code:

Path: SPRO-Enterprise structure –Assignment- logistics General –Assign plant to company code
(OX18)

Select new entries

And save

Step 6: Assign business area to plant/valuation area and division

Path: Same path

Select plant/valuation area- division button

Select new entries

And save

STEP 7: Assign purchasing organization to company code

Path: Up to assignment the path is same –Materials management –Assign purchasing organization to
company code

And save

STEP 8: Assign purchasing organization to plant

Path: Same path

And save

STEP 9: Create purchasing groups

Path: SPRO-Materials management –Purchasing –Create purchasing groups

Select new entries

And save

STEP 10: Define material groups: (OMSF)

Path: SPRO-Logistic general –Material master-Settings for key fields –Define Material groups

Select new entries

And save

STEP 11: Maintain company code for material management (OMSY)

Path: SPRO-Logistic General –Material master-Basic settings-Maintain company code for materials
management

Select position button & give your company code

And save

Note:

If we select ABP (Allow back posting) check box then we are allow to post in 12/2012

If we select DBP (Don’t back posting) check box then we are not allow to post in 12/2012

Step 12: Define attributes of material types (OMS2)

Path: up to the material master the path is same – Basic settings –Material type-Define attributes of
material types.

Select position button

Select FERT and select check boxes of Qty updating Value updating

Save

Select position button

Select HALB and select check boxes of Qty updating Value updating

Save

Select position button

Select HALB and select check boxes of Qty updating Value updating

Save

Step13: Set tolerance limits for price variance for purchase order
Path: SPRO-Material management –Purchasing –Purchase order –set tolerance limits for price
variance.

Select keys of PE and SE of company code 0001(sap standard)

Select copy as button

Enter

Save

Step 14 Plant parameters

Path: SPRO-Materials management –Inventories management and physical inventory –Plant

parameters

Select plant of 0001 (sap standard) and select copy as button

And save

Step 15: 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 keys of B1, B2 and VP for company code 0001 (sap standard)

Select copy as button

Enter

Enter

And save

Step 16: Maintain default values for tax codes

Path: SPRO- Materials management –Logistics invoice verification-Incoming invoice -Maintain
default values for tax codes

Select new entries button

And save

Step 17: Set tolerance limits for invoice verification

Path: Up to logistics invoice verification the path is same – Invoice block-Set tolerance limits

Select tolerance keys of BD, ST and PP for company code 1000 and select copy as button

Enter

Enter
And save

Step 18: Define automatic status change

Path: Up to the logistic invoice verification the path is same – Invoice verification in back ground –
Define automatic status change

Select new entries

And save

STEP 19: Group together valuation areas (OMWD)

Path: SPRO-Material management –Valuation and account assignment-Account determination-

Account determination without wizard-Group together valuation areas.

And save

STEP 20: Define valuation classes (OMSK)

Path: Same path

Click on Account category reference

Select new entries

And save
Click on Valuation Class tab

Select new entries

And save

Click on Material type/account category reference

Assign Account category reference for material types – ROH,FERT and HALB

And save
Step 21: GL Accounts (FS00)

Create below GL Accounts

GL [Link]

Note: Make sure to assign 01 cost element for 400005; 400006; 400007 and 400008

Step 22: Assignment of accounts for automatic postings (OBYC) (MM to FI INTEGRATION)

PATH: UP to account determination without wizard the path is same – Configure automatic Postings

Double click on transaction BSX inventory posting

And save
Save

Double click on WRX GR/IR Clearing account

Save

Save

Double click on GBB offsetting

 Save

Save

Double click on PRD Cost (Price) Difference

Save
 Save

Step 23: Document types and number ranges (OBA7)

WE: Goods receipt (50)

WA: Goods issue (49)

RE: Gross invoice receipt (51)

Step 24: Create Material Master (MM01)

Creation of RM X material

Enter

Select Basic Data1, Basic Data2, Purchasing, MRP 1-4, General plant data/storage 1-2, Accounting 1-
2, Costing 1-2 tabs

Enter
Basic Data 1 tab:

Purchasing Tab:

MRP 1 Tab:
Accounting 1 Tab:
Costing 1 Tab:

Save

Case 1: Stock Fully Available

Creation of Purchase Order (ME21N)

Select RM Y, Import material and maintain tax code (if necessary)

And save

PO is created with 4500000015

Creation of Goods Receipt (MIGO)

Now select RM Import and give the storage location

And save

MIGO is created with 5000000020

FI Accounting Document:
Creation of Invoice Verification (MIRO):

And save

MIRO is created with 5105600771

Note: In PO we have given 1000 and 2000 for RM X and RM Y respectively. Here, we have increased
the amounts to 1500 and 2500. Hence accounting document appears as follows:

FI Accounting Document:
Check the updated price in MM03
RM X

Plant Stock

Check the RM Y also in the same way

Case 2: Stock Partially Available

Available stock in MM03 for RM Y

Creation of PO (ME21N)
Raising PO for another 4 KGs @ 250/-

Creation of Goods Receipt (MIGO)

And save

FI Accounting Document
MM03: Stock has increased to 14 and value 3500/-

RM Consumption (MIGO):
And save

FI Accounting Document
CO Accounting Document

One more consumption for 10 QTY:

FI Accounting Document

CO Accounting Document

MM03: Check the stock in material master

Previously available stock 10

PO and GR has been done for 4

Consumption (3+10) 13

Available Stock (10+4-13) 1

Prerequisite for MIRO:

For 400008 price variance GL Account, we have given cost element. We have to maintain default
cost center in OKB9 for time being. Otherwise we will get an error while doing MIRO. Once
profitability analysis has been activated, remove the default cost center and select the check box of
profitability segment.

Creation of Invoice Verification (MIRO):

Change the amount from 1000/- to 1100/- (highlighted automatically – which was given at PO time)

And save

FI Accounting Document:
At invoice verification time, we had increased price from 1000 to 1100/- for 4 quantities, hence price
calculated as below:

Increased value = 100 and PO has been raised for 4 quantities

Available stock in material master = 1 and Consumed stock = 3 out of 4

RM Import (available stock) = 100*1/4 = 25

Price Variance (consumed stock) = 100*3/4 = 75

Check the material master (MM03):

Previously, we had moving price of 250/- and now it is 275/- (25/- added due to increase of amount
at time of invoice verification

Case 3: Stock is not available

Check the material master (MM03)

Presently, RM Y material had 1 qty of stock @ 275/-

Creation of PO (ME21N):
Creation of Goods Receipt (MIGO)

FI Accounting Document
Check moving average price in MM03:

Previously moving average price was 275 and PO has been raised for 250/-. Total value was 525

Goods Issue (MIGO) – Raw material Consumption

FI Accounting Document:
CO Accounting Document:

Check the stock in material master:

Now, stock has been fully consumed

Creation of Invoice Verification (MIRO):

FI Accounting Document

PO has been raised for 250/- and invoice verification done for 250/- and more over stock was not
available. Hence difference amount (25 = 275-250) was posted to price variance

CO Accounting Document: