SAP-TO BE Process

Cost Element Accounting

New Allenberry Works
CO 001 NAW
Controlling

Version 1.0
27.09.2006

STATEMENT OF CONFIDENTIALITY / DISCLAIMER

This document is the property of Caritor, Inc. No part of this
document shall be reproduced, stored in a retrieval system,
or transmitted by any means, electronic, mechanical,
photocopying, recording, or otherwise without prior written
permission from Caritor, Inc.

Table of Contents

Table of Contents
1

Cost Element Accounting......................................................................................................................3

AS IS Process.........................................................................................................................................................3

Core to Be Process.................................................................................................................................4
General Explanation...............................................................................................................................................4
Cost element creation.............................................................................................................................................5
Cost element categories.........................................................................................................................................5
Changes to Existing Organization..........................................................................................................................5
Description of Improvements and Key Metrics.......................................................................................................5
Notes on Further Improvements.............................................................................................................................5
Functional Deficit and Method to Remove That......................................................................................................6
Interface Requirement............................................................................................................................................6
System Configuration Considerations....................................................................................................................6
File Conversion Considerations..............................................................................................................................6
Any reports required related to current business process......................................................................................6
Any document/output would be printed for this business process..........................................................................6
Authorization Considerations..................................................................................................................................6
End User Training Requirements............................................................................................................................6

SAP Standard Reports............................................................................................................................8

Custom Developments...........................................................................................................................9

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SAP TO BE Process

1 Cost Element Accounting

TO-BE Document
For SAP R/3 Implementation at New Allenberry Works.

Sr. No of TO BE document

CO-001

Ref. Sr. No. Of AS-IS document

N/A

Name of Business Process:

Cost Element Accounting

Module: CO (Controlling)

Sub module: Cost Element Accounting

Version no of document: 1.0

Date: 27.09.2006

Version Management This Document is subject to change control. Every change of the document has to Undergo change
control procedure and has to be registered in the following table
Version

Change

Prepared By

Date

AS IS Process
There is no AS-IS process existing for Cost Element Accounting.

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SAP TO BE Process

2 Core to Be Process
There are 2 broad processes in Cost Element Accounting:
Cost element creation
Cost element group creation

General Explanation
Cost Element Accounting classifies the costs and revenues that are posted to CO, and provides the capability for
reconciliation of costs in CO with the Financial Accounting (FI) module, in case required.

Cost elements
A cost element describes the nature of cost. It serves the following purposes:
Primary cost elements are GL accounts, which would require a compulsory cost object whenever these accounts are
credited or debited. The cost center / internal order transactions shall be analyzed cost element wise. All GL Accounts
in the nature of expenses will be created as Cost Elements. Exceptions are Price Difference, Exchange Difference,
Sub-contracting and Cost of Goods Sold. The creation of cost elements for the exceptions will be explored based on
the requirement of the business process.
Secondary cost elements are used for allocations and settlements. These are not represented by GL accounts in FI.
Based on the type of activity allocations, the secondary cost elements shall be set up after the allocation logic is
finalized. The following are the list of Secondary Cost Elements
For Activities 900000 to 900999
For Overheads 930000 to 930999
For Settlement - 920000 to 920999
For RA Analysis 910000 to 910999
For Assessment Cycles 940000 to 940999

Cost element groups

Cost element groups can serve various purposes. For example, they can be used to create reports or to process
several cost elements in one business transaction. Cost Element Groups will be created for the following usage
Cost Center Assessment Cycle
Cost Center Splitting for Price Calculation
Settlement Profiles
Cost Component Structures in Production Planning

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SAP TO BE Process
Cost element creation
Cost element is created in a controlling area
Cost elements are time dependant data. Initial cost elements will be created valid from 01.01.2006
The authorization for creating and changing the cost element master shall be with the costing department and
Finance department for primary cost elements.
Cost element code will be externally assigned during creation
The first digit will denote the costs (4)

Cost element categories

Primary Cost elements have been classified into the following categories: Primary costs - Postings from FI (For all FI postings relating to costs)
External settlement - Postings to FI (Mainly for WIP calculation and Variance calculation)

Secondary Cost elements have been classified into the following categories: Assessment Allocations from cost centers to cost centers
Internal settlement - Allocations from internal orders to cost centers
Internal activity allocation Direct allocations from cost centers to product
Overhead Indirect allocations from cost centers to product

Further Notes

Changes to Existing Organization

NA

Description of Improvements and Key Metrics

Cost Element Accounting gives a distinct visibility of costs coming from various areas with-out impacting normal
books of accounts. This also provides the basis to do cost allocation with-in CO and capturing it as a separate
account.

Notes on Further Improvements

NA

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SAP TO BE Process
Functional Deficit and Method to Remove That
NA

Interface Requirement
NA

System Configuration Considerations

NA

File Conversion Considerations

NA

Any reports required related to current business process

NA

Any document/output would be printed for this business process

Authorization Considerations
Detailed Authorization matrix will be defined for all users in the common file for all

modules.

The high level Authorization requirements are as below.

Business Roles

Number of Users

Business Manager

Operations Manager

Transaction Owners

End User Training Requirements

Business User Segments

Number of Users

Type of Transaction

Geographical Location

Business Manager

Display, Reports

Faridabad

Operations Manager

Change, Display, Reports

Faridabad

Transaction Owners

Create, Display, Reports

Faridabad

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SAP TO BE Process

Sign-off (Approval) for this document:

Name of Team members:

Organization / Bus. Unit

Raman Arora / Vinod Atmakuri

Caritor Inc

Vishal Sharma

NAW

Balbir Khanna

NAW

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Signature

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SAP TO BE Process

3 SAP Standard Reports

SAP Standard Reports

Sl No:

Report Description

Selection Criteria

Output

01

KA01,02,03

Controlling Area

Create, Change, Display Cost

elements

02

KAH1,2,3

Controlling Area

Create, Change, Display Cost

element groups

03

KA23

Controlling Area / Cost element

Group

List of cost elements

04
05
06
07
08
09
10
11

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SAP TO BE Process

4 Custom Developments

Print Requirements
Sl No:
1.0

Report Description

Selection Criteria

Output

NIL

2.0

Development Requirements
Sl No:
1.0

Report Description

Selection Criteria

Output

NIL

Report Requirements
Sl No:
1.

Report Description

Selection Criteria

Output

NIL

2.
3.

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