1. 2012 ERP Corp. All rights reserved.A Guide to
FunctionalAreas and Cost-of-SalesP&L Reporting in the
SAPGeneral LedgerPaul OvigeleOvigele Consulting
2. Introduction3 Learn how to activate cost-of-sales (COS)
functionality in theSAP General Ledger Find out how to define and
derive functional areas Receive step-by-step instructions for
creating and runningfunctional area reports Discover tips for
easily switching from period-based to COSaccounting using the same
report
3. Topics Overview of cost-of-sales accounting Using functional
areas for cost-of-sales accounting Using cost-of-sales accounting
with SAP General Ledger Activating cost-of-sales scenario and
deriving functional areas Creating cost-of-sales financial
statements Summary4Start of first section:List the main points in
your presentation and insert this slide atthe start of each new
topic. Move the highlighted box down foreach new section. This
divides your presentation into easy tofollow sections.
4. Approaches to Profit and Loss Accounting Period-Based
Accounting Sales are matched with cost-of-sales forthe period
Cost-of-Sales Accounting Sales are matched with cost of goodssold
regardless of when produced5
5. Comparing Accounting MethodsPeriod-Based Cost-of-Sales
Revenues Sales deductions Changes in stock Work in process Revenues
Sales deductions Cost-of-sales(incl. period variances)Total Output
Gross Result Material Consumption Salaries Other Costs Sales and
Distribution Administration Research & DevelopmentResult
Result6
6. Extra G/L Accounts Approach A simpler approach to implement,
as every classification isdealt with using general ledger accounts
Could lead to a significantly larger and unmanageable chart
ofaccounts Could make configuration of account assignments
morecomplicated e.g., which depreciation expense account category
will youassign to the asset class?7
7. Costing-Based CO-PA Approach Value fields are mapped to
sales conditions, G/L accounts, andvariance categories to reflect
the source of the activities Characteristics help determine what
dimensions to report on;e.g., product line, customer, region, etc.
Reconciliation with FI is sometimes difficult because valuefields
are not always updated at the same time as generalledger
accounts8
8. Functional Area Approach Allows you to classify your expense
accounts into the differentfunctional areas in which they occurred
e.g., you can identify whether a payroll expense isproduction or
marketing related With SAP General Ledger you can pull extra
characteristics intothe FAGLFLEXT table and hence facilitate
evaluations byproduct, customer, country, etc., just as in CO-PA
CO-PA is still more suitable for contribution margin reportingand
analyzing fixed vs. variable costs9
10. Topics Overview of cost-of-sales accounting Using
functional areas for cost-of-sales accounting Using cost-of-sales
accounting with SAP General Ledger Activating cost-of-sales
scenario and deriving functional areas Creating cost-of-sales
financial statements Summary11Start of first section:List the main
points in your presentation and insert this slide atthe start of
each new topic. Move the highlighted box down foreach new section.
This divides your presentation into easy tofollow sections.
11. Options for Deriving Functional Areas12Manual
EntryInternalOrdersCostCentersCostCollectorsCost ObjectsG/L
AccountSubstitutionP&L Account
12. Functional Areas in Cost ObjectsCost Object Cost center
Internal order Product costcollector WBS element Network Profit
centerAssignment Cost Center Category Cost Center Master Data Order
Type Internal Order Master Data Order Type Cost Collector Master
Data Project Profile Network Type Account Assignment13
13. Multiple Cost Objects in One Line Item If, for example, a
cost center and internal order are entered onone line item, the
order is treated as actual and the cost centeras statistical (due
to the actual assignment rule) Hence the functional area of the
order is derived14Whose functionalarea is derived?
14. Functional Areas in G/L Accounts/Cost Elements If the G/L
account is also a cost element, you can only enter thefunctional
area in the master record of the P&L account The functional
area is then copied to the master data of thecost element Since
several company codes can be assigned to a controllingarea, the
functional area field is assigned to the chart ofaccounts area of
the G/L account and cost element master data This ensures that the
same functional area is entered in the G/Laccount and its related
cost element15
15. Functional Areas in G/L Accounts/Cost Elements
(cont.)Scenario DerivationYou post to a G/L account for whichthere
is no cost elementSystem derives the functional areafrom the G/L
accountYou post to a G/L account for which acost element
existsSystem derives the functional areafrom the G/L accountYou
post to a cost element (incontrolling) for which there is no
G/LaccountSystem derives the functional areafrom the secondary cost
element16
16. Cost-of-Sales Substitutions Substitution is a process for
checking a value entered in SAPagainst a user-defined prerequisite
If the prerequisite is met, then the value of a specific field
isreplaced by substitute values17User defines rulesand field to
bereplacedIsprerequisitemet?Replacefield
withspecifiedvalueReplacefield withspecifiedvalueNoYes
17. Substitution vs. Cost Center Categories Substitutions Pro:
Particularly useful in exceptions to normalcircumstances; for
example, you want functional area ABC tobe derived only for
postings to a specific cost element in thatcost center Con:
Trickier to modify when business circumstanceschange Cost Center
Categories Pro: Simpler to set up. Easy way to ensure that all new
costcenters have a functional area assigned to them Con: Doesnt
take into account special situations where thecost center category
is not the only driver for the functionalarea assignment18
18. Manual Entry of Functional Areas Could be used in very
unique circumstances where thefunctional area will not be known
until the time of posting Field status group for posting keys and
chart of accountsshould be set to optional for functional areas19
This overrides all other methods of derivingfunctional areas, so
should be used only whereautomatic derivation does not apply
19. Topics Overview of cost-of-sales accounting Using
functional areas for cost-of-sales accounting Using cost-of-sales
accounting with SAP General Ledger Activating cost-of-sales
scenario and deriving functional areas Creating cost-of-sales
financial statements Summary20Start of first section:List the main
points in your presentation and insert this slide atthe start of
each new topic. Move the highlighted box down foreach new section.
This divides your presentation into easy tofollow sections.
20. Cost-of-Sales Ledger in SAP General Ledger With SAP R/3 you
needed to activate the Cost of Ledger (0F) inorder to use
functional areas. Now with SAP ERP, the Cost-of-Sales Ledger is
included in SAP General LedgerSAP ERPSAP R/3Reconciliation Ledger
EC-PCA Special Purpose Ledger Cost-of-Sales Ledger Consolidation
StagingLedger21
21. Scenarios in SAP General Ledger A scenario determines what
fields in a ledger are updated whenit receives posting from other
application components If you want to update the functional area
field in the SAP G/Lview of an accounting document, you need to
assign the Cost-of-Sales scenario (FIN_UKV) to the relevant ledger
This updates the sender and receiver functional area fields Go to
IMG path: Financial Accounting (NEW) FinancialAccounting basic
settings (NEW) Ledgers Fields DisplayScenarios for General Ledger
Accounting22
22. Examples of Scenarios in SAP General LedgerScenario
Description Fields Filled TechnicalField NameFIN_CCA Cost center
update Cost centerSender cost centerRCNTRSCNTRFIN_PCA Profit center
update Profit centerPartner profit centerPPRCTRPRCTRFIN_UKV
Cost-of-salesaccountingFunctional areaPartner
functionalareaRFAREASFAREA If you dont assign scenarios to the
leading or non-leadingledgers, the system updates only the account
and companycode objects in the FAGLFLEXT table23
23. Substitutions in SAP General Ledger When SAP G/L is active,
you can activate functional areaderivation on the entry screen This
means that the functional area is derived before you savethe
document anytime you hit the Enter button This makes substitution
call-up point 6 relevant for activation(with classic G/L call-up
point 5 is relevant) Financial Accounting (New) Financial
Accounting GlobalSettings (New) Tools Customer Enhancements
EnhanceFunctional Area Determination24
24. Substitutions in SAP General Ledger (cont.)25This
prerequisite statesthat: If the accountnumber is 474240and the cost
centercategory is 5..Then the functional areato be derived in the
postingis TEST1The substitution is activatedfor the relevant
companycode with call-up point 6
25. Adding Characteristics to CO Totals Records When you
activate SAP G/L, the functional area characteristic isupdated in
the totals table of Controlling (CO) This means that credit
postings can be made from the COsender objects using the functional
areas duringassessments The menu path for this is: Controlling
GeneralControlling Add Characteristics to CO totals records26Sender
FunctionalArea is now availablein Assessments!!
26. Account Assignment Objects for Asset Accounting You can
activate the functional area field as an accountassignment object
in asset accounting This means that the functional area field will
be availableduring asset postings to the general ledger You then
assign the functional area object to an accountassignment type
(either APC posting or Depreciation posting) This is done per
company code and depreciation area Financial Accounting (NEW) Asset
Accounting Integrationwith the General Ledger Additional Account
AssignmentObjects Activate Account Assignment Objects /
SpecifyAccount Assignment Types for Account Assignment
Objects27
27. Topics Overview of cost-of-sales accounting Using
functional areas for cost-of-sales accounting Using cost-of-sales
accounting with SAP General Ledger Activating cost-of-sales
scenario and deriving functional areas Creating cost-of-sales
financial statements Summary28Start of first section:List the main
points in your presentation and insert this slide atthe start of
each new topic. Move the highlighted box down foreach new section.
This divides your presentation into easy tofollow sections.
28. Creating and Deriving Functional Areas29
29. Activating Cost-of-Sales Accounting30 In Preparation This
enables the functional area tobe available for input in masterdata
such as G/L accounts, costcenters, etc. No postings can be made
tofunctional areas Active This enables the functional areasto be
derived and updated duringpostingOptions for Activation per Company
Code
30. Activating Cost-of-Sales Accounting (cont.)31 When
cost-of-sales is activated for a company code, the globalparameters
will have 2 in the Cost of sales accounting actv.field (this can be
seen in transaction OBY6) The Functional Area field is ready for
input in all companycodes of a client, provided that the status of
cost-of-salesaccounting is either In Preparation or Active for at
least onecompany code of the client
31. Entering Functional Areas in Master Data32Master Data
Transaction forupdateAssignment LevelG/L Account FSP2 Chart of
AccountsCost Center KS02 Controlling AreaCost CenterCategoryOKA2
ClientInternal Order KO02 Controlling AreaOrder Type KOT2
ClientCost Element KA02 Chart of Accounts
32. Functional Areas in Cost Center Master33 Advantages of
direct entry Allows for flexibility to change in case the cost
centercategories propose placeholder functional areas in thecost
center The business may not want to create as many cost
centercategories as there are functional areas Disadvantages of
direct entry Users can accidentally overwrite the correct
functional areathat was derived from the cost center category May
make master data creation more time-consuming
33. Functional Areas in Internal Orders34 To ensure consistency
ofthe functional areas in themaster data of internalorders, define
theFunctional area field inthe field selection controlof the order
type as anoutput field. This willmake it impossible tomanually
enter thefunctional area in theorder type.Is functionalarea
entereddirectly in ordermaster?Is functional areaentered directlyin
order type?Is functionalarea entered inresponsible costcenter of
theorderFunctional arearecorded in ordermasterNoNoYESYESYES
34. Functional Areas in Secondary Cost Elements35 Be careful
when trying to enter functional areas in secondarycost elements
Entering a functional area in a secondary cost element onlymakes
sense if, before the assessment, the CO object to becredited was
only debited under the functional area that isalso entered in the
secondary allocation cost element Otherwise this could cause
reconciliation issues if thesender cost center has been debited
with other functionalareas, in which case the functional area
balance for this costcenter will not be zero For assessments or
other allocations, it is advisable to derivethe functional area
from the cost center or substitution rule
35. Changes to Functional Areas36 If you want to change the
functional area in the master datawhere postings with this
functional area have been made, youget the following error:
Transaction Data already exists You can change this setting by
either making the Error Message(FH 600) a Warning Message or
deactivating the message totally Go to Menu path : Financial
Accounting (New) FinancialAccounting General Settings (New)
Document DefaultValues Change message Control for
DocumentProcessing
36. Functional Areas in Field Status Groups37 Functional Area
field status is found in Additional accountassignment section of
posting keys transactions (OB41) andchart of accounts (OBC4) Field
statuses can be set to allow functional areas to besuppressed,
displayed, or required when documents are posted Set the field
status for functional areas to suppressed toeliminate possible user
error
37. Topics Overview of cost-of-sales accounting Using
functional areas for cost-of-sales accounting Using cost-of-sales
accounting with SAP General Ledger Activating cost-of-sales
scenario and deriving functional areas Creating cost-of-sales
financial statements Summary38Start of first section:List the main
points in your presentation and insert this slide atthe start of
each new topic. Move the highlighted box down foreach new section.
This divides your presentation into easy tofollow sections.
38. 39Reporting by Functional Area
39. 40Options for Reporting by Functional AreaOther
ReportOptionsDrill-downReportsReportPainter Since the functional
areafield is made available inthe FAGLFLEXTtable, standard
report0SAPBSPL-01 can beexecuted by functional area Other reporting
tools canalso be used to tailor tospecific
requirementsStandardReports
40. 41Financial Statement Versions You must explicitly
definefinancial statementversions as beingpermissible by
functionalarea allowed indicator inthe configuration settingsof
transaction OB58 You then assign thefunctional areas to thelowest
nodes You can assign either a functional area or anaccount to a
node in the Financial Statementversion, but not both
41. 42Standard Report 0SAPBSPL-01 This report can be
executedthrough transactionS_PL0_86000028 The functional area
fieldis available to selectionin the initial screen You enter the
financialstatement version whereyou set the functionalarea as
allowable
42. 43Standard Report 0SAPBSPL-01 (cont.) When executed inthe
drill-downformat, this reportcan be displayedusing the
standarddrilldownfunctionalities Click on any ofthecharacteristics
onthe top left of thescreen to analyzethe data with
thatcharacteristic
43. 44Drill-Down Reports You can use the standard reports as a
template for creatingyour own custom drill-down report Financial
Accounting (New) General Ledger Accounting(New) Information System
Drilldown Reports (G/LAccounts)Standard Reportbeing copiedCustom
Report
44. How to Copy and Modify a Standard Report45Identify the
library that has the relevantcharacteristics and key figures for
Cost-of-Sales reporting (0F1)Create a Set Variable if you want to
groupthe functional areas into logical groupingsCreate a report
from library 0F1 and definethe rows and columns you want to
appearin the reportCreate a report group and assign the reportto
this report groupGR23GS11GR11GR51
45. 46Problem with Report Painter Reports Report Painter
reports do not support a financial statementversion with functional
areas This means that in order to group functional areas
intoreporting nodes, you need to create sets and replicate
thefunctional area financial statement version This makes the
reports more time-consuming to create It also means that you need
to update two structures when businesscircumstances change the
Financial Statement version and the Setthat was created
46. 47Other Reporting Options ABAP Reports Custom reports can
be created from tables GLFUNCT andGLFUNCA in classical G/L and
FAGLFLEXT & FAGLFLEXA inSAP G/L BI Reports Activation of
InfoCubes 0FIGL_C02 (Cost of Sales Ledger:Transaction Figures) and
0FIGL_VC2 (Cost of Sales Ledger:Financial Statements) Query
0FIGL_V10_Q0001 (Financial Statements (New):Actual/Actual
Comparison ) is a New G/L financial statementreport which can be
viewed by functional areas
47. Topics48 Overview of cost-of-sales accounting Using
functional areas for cost-of-sales accounting Using cost-of-sales
accounting with SAP General Ledger Activating cost-of-sales
scenario and deriving functional areas Creating cost-of-sales
financial statements SummaryStart of first section:List the main
points in your presentation and insert this slide atthe start of
each new topic. Move the highlighted box down foreach new section.
This divides your presentation into easy tofollow sections.
48. Resources Paul Ovigele, 100 Things You Should Know About
FinancialAccounting with SAP (July 2011) Provides little-known tips
to optimize the FinancialAccounting module, including with
cost-of-sales accounting
http://help.sap.com/saphelp_erp60_sp/helpdata/en/e1/8e51341a06084de10000009b38f83b/frameset.htm
Go to: ERP Central Component Financials FinancialAccounting General
Ledger Accounting GeneralLedger Accounting Cost of Sales Accounting
SAP Note 677630 Correcting functional areas in FI documents This
note can also be used to re-derive the functional areasof
accounting documents already posted49
49. Five Key Ideas The functional area field is updated by
assigning the cost-of-sales scenario to the relevant ledgers Cost
of-sales can be activated as follows: In Preparation means it is
available for entry in masterdata Active means that it is available
for posting It is best not to allow direct entry of functional
areas duringposting in order to avoid manual errors Standard
financial statement reports such as 0SAPBSPL-01 canbe viewed by
functional area Functional areas are derived by manual entry,
substitution, G/Laccount, cost element or cost object
assignment50
50. Questions Now: Ask questions now for immediate answers
Later: Contact me at [email protected]&A
51. DisclaimerSAP, R/3, mySAP, mySAP.com, xApps, xApp, SAP
NetWeaver, Duet, PartnerEdge, and other SAP products andservices
mentioned herein as well as their respective logos are trademarks
or registered trademarks of SAP AG inGermany and in several other
countries all over the world. All other product and service names
mentioned are thetrademarks of their respective companies. ERP Corp
is neither owned nor controlled by SAP.