Controlling

 It provides important information to Control the Company and helps in taking business
decisions. It provides the direction to the business.
 It is used for internal reporting. It helps to the management to improve the company.
Recorded in FI --------> Data - - - - - - - - > To flow to CO
Revenue & Expenses A/c --------> Co
GL a/c - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - > Cost Elements
Rent Expenses GL a/c - - - - - - - - > Cost Elements - - - > Data will record in CO also
FI CO
FB50
Rent Exp A/c (CE) Dr 50,000 | Rent Exp A/c (CE) Dr 50,000
Cost Object: - An object that is taking the cost.
Types of Cost Objects
1. Cost Centers.
2. Internal Orders.
3. Work Based Structures Elements (WBS Elements)
1. Cost Elements: - A center where we are incurring the cost. It is nothing but a department.
F100 – Finance Cost Center.
H100 – HR Cost Center
P100 – Production Cost Center
S100 – Sales Cost Center
Cost Elements: - It is the cost carrier from FI to CO. It is a Revenue/Expense GL a/c which has been
converted in to Cost Elements.
Once a GL account is converted in to Cost elements every time whenever we will post to that GL
account, that data will automatically flow in to CO also on real time basis.
CO – Configuration
Step 1: - Maintain Controlling Area : OKKP
Controlling Area: - It is the level at which we do the Cost accounting. The Relationship between
the Controlling Area and Company code is 1:1 or 1: N
Execute OKKP
Click on “New Entries”
Controlling area : NCLC
Name : NCLC Controlling area
Company code CO area : Controlling area as Company code
Currency type : 10 (Company code)
Currency : INR
Chart of Accounts : NCLC
Fiscal year : V3
Cost Center Standard Hierarchy : NCLCSTDHY
Click on “Save” in New request as Controlling
Double click on “Assignment of Company code”
Click on “New Entries”
Company code : NCLC
“Enter” & “Save”
Double click on “Activate Components/Control indicators”
Click on “New Entries”
Fiscal year : 2022
Cost center : Components Active
Select “AA Active type”
Order Mgmt : Components Active
Commit. Mgmt : Components Active
Profit Analysis : leave blank
Acty – Based costing: Components Active for parlor
Select “Profit center active”
Select “project
Select “Sales order”
Select “Cost Object”
Click on “Save”
Step 2: - Define Number Range for CO Documents : KANK
CO area : NCLC
Click on “Maintain Groups”
Go to “Menu”
“Group”
“Insert”
Text : CO Document Group1

Click on “Enter”
Double click on Element to Assign Element to group”
Select “The Group to assign Element”
Click on “Element/Group”
Click on “Save”
Step 3: - Maintains Versions : OKEQ
Plan1  Version0
Plan2  Version1
Plan3  Version2
Execute OKEQ
Select “0” Version
Double click on “Controlling Area Settings”
Controlling area : NCLC
Select “0” Version
Double click on “Settings for Each Fiscal year”
Click on “New Entries”
Fiscal year : 2022
Select “Copying Allowed”
Exchange Rate type : M M (Standard translation)
Click on “Save”
Click on “Back 2 times”
Select “0” Version
Double click on “Settings Profit Center Accounting”
Click on “New Entries”
Year : 2022
Select “Online transfer”
Select “Line items”
Exchange rate type : M (Standard)
Click on “Save”
To Create a Cost Elements : FS00
Ex: - Rent Expense GL A/c - - - - Convert into - - - - > Cost Element
Select “Rent Expense GL a/c” (400000)
Click on “Change”
Go to “Create/Bank/Interest Tab”
Field Status Group : Change from G001 to G004 (Cost Accounts)
Click on “Edit Cost Element”
Cost Element : 400000 (Rent Exp a/c)
Valid from : 01.04.2022 to : 31.12.9999 press “Enter”
Cost Element Category : 1 (Primary)
Click on “Save”

Note: - While doing FB50 if we found an error like

Account 400000 Required an Assignment CO Object
Cost centre
CO Objects Internal orders
WBS Elements
Then we have to create CO Objects like Cost centre, Internal order, Work based structure
elements.
To Create Cost Center : KS01
Controlling area : NCLC press “Enter”
Cost Center : F100
Valid from : 01.04.2022 to : 31.12.9999 press “Enter”
Name : F100
Description : Finance Cost Center
Person responsible : Finance Manager
Cost center category : 5 (Management)
Hierarchy area : NCLCSTDHY
Business area : NCLC (Hyd Business area)
Currency : INR
Click on “Save”
Note: - We have to confirm whether Cost center working or not in T code FB50, using cost
center F100.

To Display CO Document : KSB5

Document No : 1000000000
Click on “Execute” to display

To Display Cost Center Report : KSB1

Cost Center : F100
Cost Element : 400000 (Rent Exp A/c)
Posting data
Posting date from : 01.04.2022 to 31.12.9999
Click on “Execute”

All data related to F100 will be displayed here.

Creation of Cost Elements from CO side : KA01
Cost Element : 400001 (Wages Exp A/c)
Valid from : 01.04.2022 to : 31.12.9999 press “Enter”
Cost Element Category : 1 (Primary)
Click on “Save” after we have to change Filed Status in FS00 to G004 for this a/c.
Mass Creation of Cost Elements
Step 1: - Specify the GL a/c to be Converted into Cost Elements : OKB2
Chart of Accounts : NCLC press “Enter”
Click on “New Entries”
Account from : 400002
Account to : 400005
Cost Element Category : 1 (Primary)
Click on “Save”
Step 2: - Create a Batch Session to Create the Cost Elements : OKB3
Controlling area : NCLC
Valid from : 01.04.2022
Valid to : 31.12.9999
Session Name : USER
Batch input user : USER
Click on “Execute”
System 
Services 
Batch Input 
Sessions 

Select your “Session”

Click on “Process”
Select “Display Errors only”
Select Extended Log”
Click on “Process” to batch run
Mass Changing of GL Accounts : OB_GLACC12
 Field Status from G001 to G004 (Cost Accounts)
Execute OB_GLACC12 press “Enter”
Company code : NCLC
GL Accounts from : 400001 to 400005
Click on “Execute”
Select all GL Accounts
Field Status : G004
A/c Currency : INR
Select “Only Balance in Local Currency”
Select “Line Item Display”
Sort Key : 001
Click on “Carry Out a Mass Change”
Click on “Save” & “Enter”
To Create Cost Center (for H100, P100, S100) : KS01
Controlling area : NCLC press “Enter”
Cost Center : H100
Valid from : 01.04.2022 to : 31.12.9999 press “Enter”
Name : H100
Description : HR Cost Center
Person responsible : HR Manager
Cost center category : 2 (Services)
Hierarchy area : NCLCSTDHY
Business area : NCLC (Hyd Business area)
Currency : INR
Click on “Save”
Controlling area : NCLC press “Enter”
Cost Center : P100
Valid from : 01.04.2022 to : 31.12.9999 press “Enter”
Name : P100
Description : Production Cost Center
Person responsible : Production Manager
Cost center category : 1 (Production)
Hierarchy area : NCLCSTDHY
Business area : NCLC (Hyd Business area)
Currency : INR
Click on “Save”
Controlling area : NCLC press “Enter”
Cost Center : S100
Valid from : 01.04.2022 to : 31.12.9999 press “Enter”
Name : P100
Description : Sales Cost Center
Person responsible : Sales Manager
Cost center category : 3 (Sales)
Hierarchy area : NCLCSTDHY
Business area : NCLC (Hyd Business area)
Currency : INR
Click on “Save”
To Set Controlling Area : OKKS
Controlling area : Remove old controlling area & Give your controlling area
Press “Enter”
Cost Element group: - It is a Set of Cost elements grouped together for reporting purposes.
Creation of Cost Elements Group : KAH1
1. Group : STAFFEXP press “Enter”
Name : Staff Expenses Cost Element Group
Click on “Insert Cost Element”
400001 – 400002
400079—
Press “Enter”
Click on “Save”
2. Group : OFFICEEXP press “Enter”
Name : Office Expenses Cost Element Group
Click on “Insert Cost Element”
400000 – 400002
400080
Press “Enter”
 Click on “Save”

Creation of Cost Center Group : KSH1

Cost Center Group : HYDCCGRP press “Enter”
Name : HYD Cost Center Group
Click on “Insert Cost Center”
F100 – S100
Press “Enter”
Click on “Save”

Cost Center Planning: -

Budget: - Top – Down Based on historical data or Industry Standards.
Ex: - 24,00,000 per Annum  2,00,000 per Period
Plan for a Period
Elements Plan Actual Posted
Rent 400000 50,000 50,000
Wages 400001 90,000 70,000
Insurance 400002 20,000 10,000
Travelling 400079 10,000 10,000
Misc 400080 30,000 30,000
Cost Center Configuration
Step1: - Maintain Budget for Cost Center : KPZ2
Controlling Area : NCLC
Cost center : F100
Press “Enter”
Click on “Annual Overview”
Fiscal year : 2022
Annual Amount : 24,00,000
DK : 1 (Equal Distribution) Click on “Save”
Step 2: - Maintain Planner Profile : KP34
 Standard Planner Profile  “All Planner Layouts” (SAPALL)
 Copy the Standard Planner profile and create Own Planner Profile.
Click on “Position”
Planner Profile : SAPALL press “Enter”
Select “SAPALL”
Click on “Copy”
Change name to “NCLCPP”
Description : All Planner Profile for NCLC
“Enter” & “Save”
Step 3: - Set the Planner Profile : KP04
Planner Profile : NCLC
Press “Enter”
Step 4: - Plan for the Cost Center : KP06
Version : 0
From Period : 1
To Period : 1
Fiscal year : 2022
Cost center : F100
Cost Elements from : 400000 to : 400080
Entry
Select “Form Based”
Click on “Overview”
Cost Elements Plan
400000 Rent 50,000
400001 Wages 90,000
400002 Insurance 20,000
400079 Travelling 10,000
400080 Miscellaneous 30,000
Click on “Save”
Step 5: - Post Actual Expenses to Cost center : FB50
Cost Elements To Post
400000 Rent 50,000
400001 Wages 90,000
400002 Insurance 5,000
400079 Travelling 5,000
400080 Miscellaneous 20,000
 Post these values using Cost center F100 in FB50.
Step 6: - View Plan/Actual Variance Report : S_ALR_87013611
Execute “S_ALR_87013611”
Controlling area : NCLC
Fiscal year : 2022
From Period : 1
To Period : 1
Plan Version : 0
Cost Center value : F100
Cost Element Values from : 400000 to : 400080
Click on “Execute”
Reallocation of Costs: -
Allocating the costs from one cost center to another cost center after it has been posted to a cost
center.
Type of Reallocation: -
1. Line item Reposting.
2. Manual Reposting of Costs.
3. Distribution Cycle.
4. Assessment Cycle.
1. Line item Reposting : KB61
 This is used to Reallocate the cost from one Cost center to another Cost center immediately
after posting the document.
 We need FI document number to do Line Item Reposting.
Execute KB61
Document no : 10000004
Company code : NCLC
Fiscal year : 2022
Click on “Execute”
 Value Transfer curr : 30,000
Acct Assignment1 : H100
Press “Enter” & Click on “Save”

2. Manual Reposting of the Costs : KB11N

This is used when we want to reallocate any cost element from any cost center, from any
cost center to any cost element, for any amount, at any point of time.
Execute KB11N
Cost center Old : F100
Cost Element : 400002
Amount : 20,000
Cost center new : P100
Press “Enter” & click on “Save”
Error: - Assign a number range to business transaction RKU1.
Execute KANK
Controlling area : NCLC
Click on “Maintain Group”
Select “RKU1” (blue line)
Select “CO Document group1”
Click on “Assign Element/Group”
Click on “Save”

3. Distribution Cycle : KSV1

Cycle: - Something that will repeat again.
Cost Element : Canteen Expenses
What : Amount Posted to a Cost Element.
Sender Cost Center : F100
Receiver Cost Center : H100, P100, S100
Basis: -
Amount --
Percentage -- 25% each
Fraction --
Save as Cycle
Every period-end - - - - - - - Run the Cycle
Create Canteen Expenses A/c (400014) in : FS00
GL a/c : 400014
Co code : NCLC
A/c type : Expenses
Text : Canteen Expenses A/c
Select “Only Balance in local currency”
Select “Line item display”
Sort key : 001
Group : G004 (Cost Accounts)
“Save” & Change “Cost Element Category” : 1(Primary)
“Save”
 Execute KSV1
Cycle : NCLCCD (NCLC Canteen Distribution)
Start date : 01.04.2022
Press “Enter”
Text : NCLC Canteen Expenses Distribution Cycle
Click on “Attach Segment”
Segment Name : CSK7CE
Name : CSK7 Canteen Expenses
Sender Rule : Posted Amount
Select “Actual Values”
Receiver Rule : Fixed Percentages
Go to “Senders/Receivers” tab
Sender
Cost Center from : F100
Cost Element : 400014
Receiver
Cost Center : H100 to S100
Go “Receivers Tracing Factors” tab
H100 : 25%
P100 : 25%
S100 : 25%
“Enter” & “Save”
To Run Distribution Cycle : KSV5
Period from : 1 to : 1
Fiscal Year : 2022
Select “Test Run” (For checking purpose)
Cycle : NCLCCD
Start date : 01.04.2022
Click on “Execute”
Error: Maintain number range for controlling area CSK7 transaction RKIV
Execute KANK
Controlling area : NCLC
Click on “Maintain Groups”
Select “RKIV” (Actual Overhead Distribution)
Select check box “CO Document Group”
Click on “Assign Element/Group”
Click on “Save”
To Change the Distribution Cycle : KSV2
Controlling Area : NCLC
Distribution Cycle : NCLCCD
Start date : 01.04.2022
Press “Enter”
Do Changes what is Required, then click on “Save”
SKF – Statistical Key Figure
SKF data is the data collected every period which forms as a basis for the Reallocation of costs
related to any cost element.
Primary Cost and Secondary Cost: -
Primary Cost: - it is the cost flowing from FI to CO. It is the Actual expenditure that has been
posted to a FI GL account.
Secondary Cost: - It is the cost created within CO for reporting purposes. It does not flow from FI.
 Distribution cycle uses Primary costs.
 Assessment cycle uses Secondary costs.

4. Assessment Cycle
Step 1: - Create the Quality Check Expense GL account : FS00
GL a/c no : 400015
Company code : NCLC
A/c type : Expenses
Select “P&L account”
Text : Quality Check Expenses GL account
Select “Only Balance in local currency”
Select “line item display”
Sort Key : 001
Field Status Group : G004 (Cost accounts)
Click on “Save”
Click on “Edit Cost Element” Press “Enter”
Cost Element : 1 (Primary)
Click on “Save”
Step 2: - Create Statistical Key Figure for No of Units : KK01
Statistical Key Figure : NCLCNU (NCLC Number of Units)
Press “Enter”
Name : SKF for No of Units Manufactured
Statistical Key Figure Unit of Measurement : UN (Units)
Click on “Save”
Step 3: - Define Number Range for Business Transaction RKS : KANK
Controlling area : NCLC
Click on “Maintain Group”
Select “RKS” (Enter Statistical Key Figures)
Select “CO Document group”
Click on “Assign Element/Group”
Click on “Save”
Step 4: - Create Two Cost Centers (Process 1, Process2) : KS01
1. Process 1
Controlling Area : NCLC press “Enter”
Cost Center : Process 1
Start from : 01.04.2022 to : 31.12.9999
Press “Enter”
Name : Process 1 CC
Description : Process 1 Cost Center
Person Responsible : Production Manager
Cost center Category : 1 (Production)
Hierarchy : NCLCSTDHY
Business Area : HYD1
Currency : INR
Click on “Save”
2. Process 2
Cost Center : Process 2
Start from : 01.04.2022 to : 31.12.9999
Press “Enter”
Name : Process 1 CC
Description : Process 1 Cost Center
Person Responsible : Production Manager
Cost center Category : 1 (Production)
Hierarchy : NCLCSTDHY
Business Area : HYD1
Currency : INR
Click on “Save”
Step 5: - Create Secondary Cost Element : KA06
Cost Element : 1000
Valid from : 01.04.2022 to : 31.12.9999
Press “Enter”
Name : Assessment CE
Description : Assessment Cost Element
Coast Element Category : 42 (Assessment)
Click on “Save”
Step 6: - Create the Assessment Cycle : KSU1
Cycle : NCLCQA (NCLC Quality Assessment)
Start date : 01.04.2022 press “Enter”
Text : NCLC Quality Check Assessment
Click on “Attach Segment”
Segment : NCLCQA : NCLC Quality Check Assessment
Assessment Cost Element : 1000
Sender Rule : Posted Amounts
Select “Actual Value Origin”
Receiver rule : Variable Portions
Var. Portion type : Actual Statistical Key Figures
Go to “Senders/Receivers” tab
Sender Cost center : P100
Cost element : 400015
Receiver Cost center from : Process 1 to : Process 2
Go to “Receiver Tracing factor” tab
Var. Portion type : Actual Statistical Key Figures
Selection Criteria
Statistical Key Figure : NCLCNU
Click on “Save”
Step 7: - Post Actual Data Quality Check Expense for the Period : FB50
GL A/c no DR/CR Amount Cost Center
400015 Debit 1,00,000 P100
200000 Credit 1,00,000 ------------------
Click on “Save” to Post
Step 8: - Post Actual Statistical Key Figure data for the Period : KB31N
Controlling area : NCLC
Receiver CCenter : Process 1
Process 2
Click on “Save”
Step 9: - Execute the Assessment Cycle : KSU5
Period : 1 to : 1
Fiscal year : 2022
Select “Test Run” for testing purpose
Select “Detail List”
Cycle : NCLCQA
Start date : 01.04.2022
Click on “Execute”
Error : Maintain number range for controlling area CSK7 transaction RKIU
Execute KANK
Controlling area : NCLC
Click on “Maintain Groups”
Select “RKIU”
Select “CO Document Group”
Click on “Assign Element/Group”
Click on “Save”
Remove Tick from Test Run check box
Click on “Execute” again
To Display Cost Center Reports : KSB1
Cost center : Process 1 to : Process 2
Cost Element : 1000 (Secondary)
Click on “Execute”
Internal Orders: - These are used in scenarios which are not supported by cost center accounting.
Types: -
1. Statistical internal Order: - It is created and used to generate further drill down reports for
a cost center.
2. Real Internal Order: - It is used to collect the cost a Specify Job, Event or Task.
Order type controls the number range of the internal orders created under it. Order type also
controls the statuses of the Orders.
Step 1: - Create Internal Order type : KOT2
Click on “New Entries”
Order Category : 01 (Internal Order)
Order Type : NCLC : NCLC Statistical Internal Order
General Parameters
Budget Profile : 000001 (General Budget Profile)
Object class : Overhead costs
Status Management
Select “Release Immediately”
Number range interval
Click on “Assign/Change interval”
Click on “Yes” & “Save”
Go to “Down to Page”
Select “Your Statistical Internal order” (NCLC) (Make it Blue)
Select “Motor Pool A to ZZZZZZZZ…… (External)
Click on “Assign Element/Group”
Click on “Save”
Step 2: - Create 3 Statistical Internal Orders in the Name of Trucks : KO01
Controlling area : NCLC
Order type : NCLC press “Enter”
Order : NCLCTRUCK1 : NCLCTRUCK2 : NCLCTRUCK3
Description : S100 Truck 1 : S100 Truck 2 : S100 Truck 3
Go to “Control data” tab
Select “Statistical Order”
Click on “Save” same this way we have to create Truck2, Truck 3
Create GL accounts & Edit Cost Elements : FS00
400016 - Repairs & Maintenance Expense A/c - Cost Element Cat 1
400017 - Fuel Expense Account - Cost Element Cat 1
400018 - Motor Insurance Account - Cost Element Cat 1
400019 - Driver Expense Account - Cost Element Cat 1
Assigning : KAH1
Cost Element Group : TRUCKS
Press “Enter”
TRUCKS : Trucks Maintenance Cost Element Group

Click on “Insert Cost Element”

400016 – 400019 press “Enter”
Click on “Save”
Step 3: - Post Actual Truck Maintenance Expense to S100 : FB50
Document Date : 17.04.2022 Company code : NCLC
GL Account Debit/Credit Amount Cost Center Order
400016 Debit 1300 S100 NCLCTRUCK1
400017 Debit 1000 S100 NCLCTRUCK1
400018 Debit 1200 S100 NCLCTRUCK1
400019 Debit 3000 S100 NCLCTRUCK1
400016 Debit 19200 S100 NCLCTRUCK2
400017 Debit 1200 S100 NCLCTRUCK2
400018 Debit 1500 S100 NCLCTRUCK2
400019 Debit 3000 S100 NCLCTRUCK2
400016 Debit 1400 S100 NCLCTRUCK3
400017 Debit 1000 S100 NCLCTRUCK3
400018 Debit 1300 S100 NCLCTRUCK3
400019 Debit 3000 S100 NCLCTRUCK3
200000 Credit *

Click on “Save” to Post

Step 4: - To Check Cost Center Report : KSB1
Controlling area : NCLC press “Enter”
Cost Center : S100
Click on “Execute”
Repost will display
Step 5: - Check Order Wise Report : KOB1
Order : NCLCTRUCK1 : NCLCTRUCK3
Cost Element : 400016 to : 400019
Click on “Execute” reports will display here
Real Internal Orders: - These are used to collect the cost a Specify Job, Event or Task.
 Real Internal Order is a cost object. It can take the cost directly.
Real Internal Order Configuration: -
Step 1: - Maintain Number Range for Business Transaction KOAO : KANK
Controlling area : NCLC
Click on “Maintain Group”
Select “KOAO”
Select “CO Document Group”
Click on “Assign Element/Group”
Click on “Save”
Step 2: - Maintain Allocation Structure : SPRO
Path: - SPRO  SAP Reference IMG  Controlling  Internal Orders  Actual Postings 
Settlement  Execute “Maintain Allocation Structures”
Click on “New Entries”
Allocation Structure : NA
Text : NCLC Allocation Structure
Press “Enter”
Select your “Allocation Structure”
Double click on “Assignments”
Click on “New Entries”
Assignment : 01
Text : Cost Elements press “Enter”
Select your “Assignment”
Double click on “Source”
Controlling Area : NCLC press “Enter”
From Cost Element : 400000 To Cost Element : 400100
Double click on “Settlement Cost Elements”
Click on “New Entries”
Receiver Category : CTR (Cost center)
Select “By Cost Element”
Click on “Save”
Step 3: - Maintain Settlement Profile : SPRO
Path: - SPRO  SAP Reference IMG  Controlling  Internal Orders  Actual Postings 
Settlement  Execute “Maintain Settlement Profile”
Double click on “Maintain Settlement Profile”
Click on “New Entries”
Settlement Profile : NCLCSP : NCLC Settlement Profile
Allocation Structure : NA (NCLC Allocation Structure)
Indicators
Select “% Settlement”
Select “Equivalence Numbers”
Select “Amount Settlement”
Valid Receivers
Cost Center : Settlement Optional
Other Parameters
Document type : SA
Max. No. Dist. Rls : 10
Residence time : 3 months
Click on “Save”
Step 4: - Maintain Number Ranges for Settlement Documents
Path: - SPRO  SAP Reference IMG  Controlling  Internal Orders  Actual Postings 
Settlement  Execute “Maintain Number Range for Settlement Documents”
Click on “Maintain Groups”
Select your “Company code” (Make it Blue)
Select “Standard Accounting Document”
Click on “Assign Element/Group”
Click on “Save”
Step 5: - Create Order Type for Real Internal Orders : KOT2
Click on “New Entries”
Order Category : 01 (Internal Order) press “Enter”
Order Type : NCRI : NCLC Real Internal Order
General Parameters
Settlement Profile : NCLCSP
Budget Profile : 000001 (General Budget Profile)
Object Class : Overhead Cost
Status Management
Select “Release Immediately”
Click on “Save”
Click on “Assign/Change Interval”
Go to “Down to the Page”
Select Your “Real internal Order” (NCRI) (Make it Blue)
Go to “Top to the Page” & Select Motor Pool A – ZZZZZZZZZZ (External)
Click on “Assign Element/Group”
Click on “Save”
Step 6: - Create Real Internal Order in the Name of Annual Day : KO01
Order type : NCRI press “Enter”
Controlling Area : NCLC
Order : NCLCAD (NCLC Annual Day)
Description : NCLC Annual Day Internal Order
Assignment
Object Class : Overhead
Go to “Control Data” tab
Remove tick “Statistical Order” if it is selected
Click on “Save”
Step 7: - Post Actual Expenses to Real Internal Order : FB50
For Annual Day
Document date : 17.04.2022 Company code : NCLC
GL Account Debit/Credit Amount Order
400000 Debit 10,00,000 NCLCAD
400001 Debit 6,00,000 NCLCAD
400080 Debit 8,00,000 NCLCAD
200000 Credit * -----------
Click on “Save” to Post
Step 8: - Maintain the Settlement Rule for Real Internal Order : KO02
Order : CSK7AD
Click on “Settlement Rule”
Category Settlement Receiver % Percentage
CTR F100 25%
CTR H100 25%
CTR P100 25%
CTR S100 25%
Click on “Save”
Step 9: - Settlement of Order at Month End : KO88
Order : CSK7AD
Settlement Period : 1
Fiscal year : 2022
Process type : Automatic
Processing Options
Select “Test Run”
Select “Check Transaction Data”
Click on “Execute” remove “Test run” & Execute Again
To Check Order Reports : KOB1
Order : NCLCAD
Cost Element from : 400000 to : 400100
Click on “Execute”
To Display Reports
Capital Budgeting and Availability Control: -
New Sales office  Job  Capital Expenditure
Budget : 10,00,000
Availability Controls: -
Expenditure Crosses 70% of Budget  Warning
Expenditure Crosses 90% of Budget  Warning + Email
Expenditure Crosses 100% of Budget  Error
Step 1: - Create Real Internal Order for New Sales Office : KO01
Order type : NCRI press “Enter”
Controlling Area : NCLC
Order : NCLCNEWSO
Description : NCLC NEW Sales Office
Company Code : NCLC
Object Class : Overhead
Go to “Control Data” tab
Click on “Settlement Rule”
Category : CTR
Settlement Receiver : S100
% Percentage : 100%
Click on “Save”
Step 2: - Setup Tolerance Limits for Availability Control : SPRO
Path: - SPRO SAP Reference IMG  Controlling  Internal Orders  Budgeting and Availability
Control  Execute “Define Tolerance Limits for Availability Control”
Availability Controls: -
Expenditure Crosses 70% of Budget  Warning
Expenditure Crosses 90% of Budget  Warning + Email
Expenditure Crosses 100% of Budget  Error
Click on “New Entries”

Click on “Save”
Step 3: - Specify Exempt Cost Element from Availability Control : SPRO
Path: - SPRO SAP Reference IMG  Controlling  Internal Orders  Budgeting and Availability
Control  Execute “Specify Exempt Cost Element from Availability Control”
Click on “New Entries”
Controlling Area : NCLC
Cost Element : 400003 (Insurance)
Click on “Save”
Step 4: - Maintain Budget Manager : SPRO
Path: - SPRO SAP Reference IMG  Controlling  Internal Orders  Budgeting and Availability
Control  Execute “Maintain Budget Manager”
Click on “New Entries”
Controlling Area : NCLC
Object Class : Overhead
User Name : 100638
Click on “Save”
Step 5: - Maintain Order Wise Budget : KO22
Order : NCLCNEWSO press “Enter”
Period Budget
Overall - 10,00,000
2022 - 10,00,000
Click on “Save”
Go to “Menu”
“Extras”
“Availability Control”
“Activity”
Post Expenses Related to New Sales Office : FB50
GL Account Debit/Credit Amount Order
400001 Debit 5,00,000 NCLCNEWSO
200000 Credit * ------------
Click on “Save” to Post
Settlement to S100 : KO88
Remove tick from “Test Run” & Execute
Profit Center Accounting (PCA): -
Cost Center: - Center where we are incurring the Cost.
Profit Center: - Center where we are generating the Profit.
Profit = Incomes (Revenue) – Expenses
ABC Profit Center - - - - - - > Profit
Revenue of ABC Profit Center
(–) Expenses of ABC Profit Center
= Profit of ABC Profit Center
NCLC - - Profit - - - - 250 Millions
HYD - 200 Millions
Bang - 200 Millions
Delhi - – 150 Million

Revenue: - Default Account Assignment

 We will create a separate sales revenue account for each profit center and we will assign
the sales revenue account to their respective Profit Center.
 There by whenever sales is recorded for the sales account it will automatically uploaded in
to the respective Profit Center.
 This concept is referring as Default Account Assignment.
Expenses: - Derivation Rule
 We are assigning the cost centers to Profit Centers. Whenever any document is posted in a
cost center it will automatically update to Respective Profit Center also.
Dummy Profit Center: -
 When The Profit Center Accounting (PCA) is activated, while posting any expense document
system will expect a Profit Center to be picked up for the document but if there is no Profit
Center is assigned to the cost center, in those circumstances system will pick the Dummy
Profit Center as the Profit Center for the Expense.
 Suppose we have a cost center for Head office and since Head office doesn’t belongs to any
Profit Center, in those circumstances system will pick the Dummy Profit Center as the Profit
Center for the Head office expense documents.
Configuration for Profit Center Accounting (PCA)
Step 1: - Set the Controlling Area : OKKS
Controlling Area : NCLC
Press “Enter”
Step 2: - Maintain Controlling Area Settings : 0KE5
Controlling Area : NCLC
Standard Hierarchy : NCLCPCSTHY (NCLC Profit Center Standard Hierarchy)
Elimination of internal business volume : Select if you want internal business.
Profit Center Local currency type : 20 (Controlling Area) (Select in Drop down list)
Profit Center Local currency : INR
Select “Store Transaction Currency”
From : 2022
Select “Activate Indicator”
Click on “Save”
Step 3: - Create Dummy Profit Center : KE59
Dummy Profit Center : DUMMYPC
Click on “Basic Data”
Nama : Dummy PC
Description : Dummy Profit Center
Person Responsible : PC Manager
Profit Center Group : NCLCPCSTHY
Click on “Save”
Step 4: - Set Control Parameters for Actual Data : 1KEF
Click on “New Entries”
From : 2022
Select “Line items”
Select “Online Transfer”
Click on “Save”
Step 5: - Define Number Range for Local Profit Center Documents : GB02
Click on “Maintain Groups”
Select “Planned Documents”
Go to “Menu”  “Interval”  “Maintain”
Company code : NCLC press “Enter”
Click on “Insert Interval”
Click on “Save”
Click on “Back”
Select “Actual Documents”
Go to “Menu”  “Interval”  “Maintain”
Company code : NCLC press “Enter”
Click on “Insert Interval”
Click on “Save”
Step 6: - Create HYDPC and Activate It : KF51
Profit center : HYDPC
Click on “Master Data”
Name : HYDPC
Description : HYD Profit Center
Person Responsible : PC Manager
Profit center Group : NCLCPCSTHY
Click on “Save”
Click on “Activate”
Step 7: - Create a Sales Revenue A/c and Make it a Cost Element : FS00
FS00 GL A/c : 300000
Company code : NCLC
Field Status Group : G029 (Revenue A/c)
Cost Element Category : 11 (Revenues)
Click on “Save”
Step 8: - Default Account Assignment : OKB9
Click on “New Entries”
Company code : NCLC
Cost Element : 300000
Profit Center : HYDPC
Click on “Save”
Step 9: - Derivation Rule : Assigning the Cost Centers to Profit Center : KS02
Cost center : F100 press “Enter”
Profit Center : HYDPC
Click on “Save”
Cost center : H100 press “Enter”
Profit Center : HYDPC
Click on “Save”
Cost center : P100 press “Enter”
Profit Center : HYDPC
Click on “Save”
Cost center : S100 press “Enter”
Profit Center : HYDPC
Click on “Save”
Step 10: - Plan for HYD Profit Center : 7KE1
Version : 0
From period : 1 to : 1
Fiscal year : 2022
Company code : NCLC
Profit Center : HYDPC
A/c from : 300000 to : 499999
Select “Form Based”
Click on “Overview”
300000 : Sales Revenue : 5,00,000
400000 : Rent Exp : 1,00,000
400001 : Wages Exp : 1,90,000
400003 : Insurance Exp : 50,000
400080 : Miscellaneous Exp : 70,000
Click on “Save”

Step 11: - Post Actual Sales : FNB70 Actual Expenses : FB50

1. FB70  Sales  300000  5,50,000 “Save”
GL a/c DR/CR Amount Cost Center
2. FB50  400000 Dr  1,00,000  F100
400001 Dr  2,10,000  H100
400003 Dr  60,000  P100
400080 Dr  50,000  S100
200000 Cr  * (4,20,000) click on “Post”
Step 12: - Check Plan vs Actual Variance Report Profit Center : S_ALR_87013326
From period : 1 to : 1
Fiscal year : 2022
Profit Center Group : NCLCPCSTHY (NCLC Profit Center Standard Hierarchy)
Profit + Loss values : 300000 to 499999
Click on “Execute”