Day 1:

General Controlling and Cost Center

Accounting- SAP CO-OM-CCA
Table of Contents

1. Teaching Objectives
2. General Controlling
1) Organizational structure in Management Accounting .
2) Overview of Management Accounting components
3) Integration within Management Accounting and with other SAP
Applications
4) Concept of FI-CO reconciliation and real time integration
5) Configure Organizational settings and number ranges in CO
5.1 Creating the Controlling Area
5.2 Maintain number ranges for controlling documents
5.3 Maintain versions
6) Configure FI-CO real time integration variant
7) Homework Exercises
8) Solutions
Teaching Objectives

Upon completion of today’s lesson, students will

1. Understand Organizational structure in management accounting

2. Be familiar with components of management accounting and understand
business transactions
3. Understand the concept of FI-CO reconciliation and real time integration

Upon completion of today’s lesson, students will be able to

1. Explain Controlling area and configure organizational structure in controlling

3. Set up CO number ranges and assign business transactions
1. General Controlling

This topic explains the foundational structure components of

the Controlling component in SAP ERP. We’ll walk through the
step-by-step processes to establish this foundation and show
you how to create the main CO organizational structural
component, the controlling area, including all of the available
settings for the customizing, how to create and assign the
number ranges, and how to assign company codes.
Organizational Structure in Management Accounting

Organization structure in CO includes the following:

1. Controlling area:
Organizational unit in an organization that represents a closed system
used for cost accounting purposes. A controlling area may contain one
or more company codes, which can operate in different currencies, if
required. The company codes within a controlling area must all use the
same operational chart of accounts.
All internal allocation transactions refer only to objects from the same
controlling area.

2. Operating concern:
An operating concern represents an organizational unit in your
company for which the sales market has a uniform structure. It is the
valuation level for Profitability Analysis (CO-PA).
Overview of Management Accounting Components

6
Integration within Management Accounting and with
other SAP Applications
Concept of FI-CO Reconciliation and Real Time
Integration

During allocations in Controlling, most of the postings created do

not affect Financial Accounting. These postings do not update any
G/L account transaction figures; they are postings within
Controlling.

If, however, an allocation in Controlling leads to a change in the

functional area or any other characteristic (such as Profit Center or
Segment) that is relevant for evaluations in Financial Accounting, a
shift occurs between the affected items in the profit and loss
statement.

For this reason, this information has to be transferred to Financial

Accounting. This reconciliation between Controlling and Financial
Accounting takes place by means of real-time integration.
Concept of FI-CO Reconciliation and Real Time
Integration

If you use real-time integration in at least one company code, you

need to have activated company code validation for the related
controlling area. You do this in Customizing
for Controlling under General Controlling -> Organization -
> Maintain Controlling Area -> Activate Components/Control
Indicators. Otherwise, the reconciliation between Financial
Accounting and Controlling at company code level is not possible.
Shown below:
Concept of FI-CO Reconciliation and Real Time
Integration
Configure Organizational Settings and Number Ranges in CO

1.5.1 Creating the Controlling Area

The controlling area is the main and highest organizational unit in CO. All
cost objects, such as cost centers, internal order activity types, and
statistical key figures, must have a controlling area assigned. Additionally,
all cost allocations, distributions, and assessments must be performed
within a controlling area and cannot cross between different controlling
areas.
Configure Organizational Settings and Number Ranges in CO

Exercise 1: Create a new controlling area

Use Transaction OKKP, or go to Controlling -> General Controlling ->

Organization -> Maintain Controlling Area.
Configure Organizational Settings and Number Ranges in CO

1 Creating the Controlling Area (Contd.)

Configure Organizational Settings and Number Ranges in CO

1. Creating the Controlling Area (Contd.)

Every time a document is created in CO, the system updates the line
items in the total tables with three different currencies:

1. The controlling area currency

2. The company code currency or object currency

3. The transaction currency, which is the currency in which the

document was posted
Configure Organizational Settings and Number Ranges in
CO

1. Creating the Controlling Area (Contd.)

Maintain Number Ranges for Controlling Documents

You can create CO number ranges using Transaction KANK or by

following the IMG menu path Controlling ->General Controlling ->
Organization -> Maintain Number Ranges for Controlling Documents.

You must create a group first to assign the number ranges to it

Maintain Number Ranges for Controlling Documents
(Contd.)

Maintain number range groups:

2. Maintain Number Ranges for Controlling Documents
(Contd.)

Go to the Group menu, and

select Create or F9. A new
pop-up window will appear
where the group name and
the number range can be
added:
2. Maintain Number Ranges for Controlling Documents
(Contd.)

After creating the number

range group, the controlling
business transaction should
be assigned to the group.
Figure on the left shows an
example of how to assign
business transactions to the
group just created for primary
postings.
Maintain Number Ranges for Controlling Documents (Contd.)

Exercise 2: Maintain Number Ranges for CO Documents - No. Range

Intervals
Procedure
1. Access the activity using the following navigation options:

IMG Menu Controlling  General Controlling  Organization 

Maintain Number Ranges for Controlling Documents

Transaction Code KANK

2. In CO Area enter your controlling area.

3. Choose Maintain Groups (F6).
4. Define the number range group menu item ”Group” item ‘Insert F6’.
5. Insert the text for the new number range group and assign the number range. Maintain the
table as follows:

Text From number To number

Primary Postings 0100000000 0199999999

Planning Transactions 0200000000 0299999999

Actual Postings (without primary postings) 0300000000 0399999999

Other Transactions 0400000000 0499999999

6. Save your entries.

Maintain Versions

Every posting, planning, and budget for CO occurs in at least one

version of CO in SAP ERP. A version consists of a set of indicators
that is fiscal year-dependent and is used for planning and actual
postings in a controlling area.
You can create and change the CO versions using Transaction OKEQ
or by going to Controlling -> General Controlling -> Organization
-> Maintain Versions, which brings you to the screen shown
below:
1.5.3 Maintain Versions

Plan
Allows planning values in the version.

Actual
Indicates that the version will receive the actual
transactions from direct or internal postings,
primary postings, and secondary postings. Only
version 000 can be flagged as actual, unless the
version is a delta version or an exclusive use
version.

WIP/RA
Permits Work in Process (WIP) and Results
Analysis (RA) for the version.

Variance
Permits calculation of variances for the version.

Exclusive Use
Indicates that the version is exclusive for some
CO subcomponents, such as Transfer Price, Cost
Estimate in Maintenance Order, Progress Analysis,
Cost Forecast, or Material Ledger.
3. Maintain Versions (Contd.)

After creating the basic settings for the version, you now need to
create the version settings in the controlling area. In the controlling
area settings, you define the options for each year that this version
will be valid, such as the exchange rate type, options for the activity
type rate calculation, and others. To create the version, select the
version on the right side of the screen, and double-click on the
Controlling Area Settings node on the left. The system will ask if
you want to create the version in the controlling area. Click Yes, and
you will see the screen shown below:
3. Maintain Versions (Contd.)
3. Maintain Versions (Contd.)

After you’ve created the controlling area settings, create the year-
dependent setting for the version in the controlling area. Mark the
version on the right side of the screen, and double-click on the
Settings for Each Fiscal Year node. You can either copy a current
entry or create a new one.

The first tab that you will customize is the Planning tab. You will set
the planning options for this version in the selected controlling area.
In the General indicators section, you can see Version Locked,
Integrated Planning, and Copying Allowed checkboxes:
3. Maintain Versions (Contd.)

• Setting the Version Locked indicator means that this version will be
locked for planning purposes for cost centers. If the Integrated
Planning flag is set, the Version Locked setting will also affect the
planning in internal orders and projects.

• Setting the Integrated Planning flag creates the integration of

planning between cost centers and other CO subcomponents such
as Profit Center Accounting or Internal Orders. Should be checked.

• Setting the Copying Allowed flag allows planning versions to be

copied from this version.
Homework Exercises

Question 1. Maintain plan version 1 for five fiscal years from previous FY for your
controlling areas? Ensure you set integrated planning, copying allowed, Integrated
planning with cost centers/bus.processes, Version for ind.act.alloc. as 1, value date
as 1/1/fiscal year

Question 2. Maintain number ranges for CO documents –CO document groups?

Hint : T-code: KANK

Question 3. Maintain number ranges for CO settlement documents? Hint: Object:

CO_ABRECHN;T-code: SNUM
Homework Exercises

Question 4: Assign controlling area to the number range group for CO settlement
documents?

Question 5: What are the different SAP modules that are integrated with CO?

Question 6: What are the sub-modules within management accounting?

1.7 Solutions